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| K-pop idol group BTS performs during the "BTS Permission to Dance ― Seoul" concert at Jamsil Olympic Stadium on March 10 of this year. Courtesy of Big Hit Music |
Securities firms lower Hybe's target price over news
By Anna J. Park
The stock price of Hybe, the company that manages BTS, plummeted more than 24 percent on Wednesday, after the K-pop juggernaut announced Tuesday night that it will take a break as its members pursue solo activities.
The stock price nosedived at the start of morning trade, hitting the daily low of 139,000 won ($107) at 10:24 a.m. The stock price soon recovered to 156,000 won at 11:16 a.m., only to drop further to close at 145,000 won, down 24.87 percent from the previous trading session.
Wednesday's intra-day low of 139,000 won is also the all-time low of Hybe stock price since the entertainment company was listed on the benchmark Kospi index in October 2020.
The group members' sudden announcement to take a break was released through the latest one-hour-long video uploaded to the group's official YouTube account "BANGTANTV" at around 9 p.m. on Tuesday, where the seven members shared their thoughts about temporarily halting the group's activities, after performing together for nine years.
BTS and Big Hit Music say group is not splitting up
However, the team members stressed in the video that the decision doesn't mean that the group has disbanded, saying the break is for the sake of their various solo activities.
Big Hit Music, a subsidiary of Hybe, also highlighted that BTS members will carry out both group and solo activities.
"BTS opens up a new chapter where group members take up both group and separate activities together," Big Hit Music announced on Wednesday. "It will be a time for growth for each member through various activities, which in turn will nourish the group's long-term visions. The label will fully support their goals and plans," the K-pop management firm said.
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| The headquarters of Hybe in Yongsan District in Seoul / Yonhap |
Despite the group and the label's announcement, brokerage companies' research centers drastically lowered Hybe's target price following the news. Hana Financial Investment lowered the entertainment company's target price by 16 percent on Wednesday to 360,000 won from 430,000 won, considering the unavoidable fall in their third-quarter earnings.
"Although the group members said it is not a disbandment, investors need to cautiously take into account BTS' vacuum in Hybe's profit estimates in 2023," Lee Ki-hoon, analyst at Hana Financial Investment, pointed out. "Hybe's projected revenue and operating profit in 2023, given BTS' break from activities, are estimated at around 1.6 trillion won and 200 billion won, respectively," the analyst added.
