Lee Yeon-woo is a financial journalist at The Korea Times. Her wide range of reporting includes policies, macroeconomics, stock market, companies and even crypto. She is passionate about connecting the dots in Korean finance and making it easier for foreign nationals to understand. Based on her previous experience as a national reporter, she also has a keen interest in social issues within the sector, including gender equality and ESG. Your tips and insights are always appreciated. You can send them to yanu@koreatimes.co.kr.
Foreign investors turn to JYP amid intensifying battle over SM
JYP Entertainment's office building in Gangdong District, Seoul / Korea Times file
By Lee Yeon-woo
By Lee Yeon-woo
Foreign investors are focusing their attention on JYP Entertainment while Korean investors are turning their eyes to SM Entertainment's skyrocketing stocks amid an intensifying battle between Kakao and HYBE over its management rights.
According to the Korea Exchange, shares of JYP ended at 80,000 won ($60.54) at Wednesday's closing, a 2.7 percent increase from the previous session. The stock price of the entertainment giant soared by 14.9 percent from the start of 2023 to March 7.
Foreign investors are behind JYP's continuous stock price increases this year.
According to the data from Korea Exchange (the sole securities exchange operator in South Korea), they have net purchased shares worth 96.5 billion won ($73 million) for a month as of March 7, listing the company in the top 12 in terms of net purchases by foreign investors. The company's foreign ownership has increased to 40.66 percent as of March 7, from 23.31 percent a year ago.
Market analysts explain that JYP is attracting foreign investors as it has been and will continue to enjoy stable growth this year with the resumption of international tours and the debut of new idol groups.
According to Meritz Securities, JYP had a record-high revenue for the last quarter of 2022, up 78.3 percent from the same period in 2021.
“JYP has proven its superiority in nurturing its intellectual properties and making stable profits out of them. Purchasing JYP's (shares) means investing in the system of K-pop,” said Park Su-young, an analyst at Hanwha Investment & Securities.
More profits are expected with the resumption of international tours, analysts said.
“Stray Kids will release a new regular album and hold a big-scale concert in Japan. TWICE will also have a concert. NiziU, who already have settled in the Japanese market, will expand their scope,” said Hwang Hyun-joon, an analyst at DB Financial Investment.
The company's portfolio diversification is also considered an advantage. New groups from various ongoing projects, such as the LOUD project, Project C and Nizi Project, will kick off their activities this year.
Securities companies are raising their target price for JYP. On Thursday, Hanwha Investment & Securities raised its target price to 100,000 won from 94,000 won. Both Meritz Securities and Daol Securities also adjusted their target prices for this year to 82,000 won from 78,000 won.