Big Hit stock gains 18% to a historic high on expected partnership with Naver

[Photo by Big Hit Entertainment]

Big Hit Entertainment, the label behind K-pop superstar BTS, rallied for two straight trading days on Monday to touch the 200,000 won milestone for the first time since its debut three months ago on news that it could enter equity-based partnership with the country’s internet giant Naver.

Shares of Bit Hit Entertainment Monday rose 5.7 percent to 203,500 won($184.71) after closing Friday 11.27 percent higher at 192,500 won in Seoul trading. It is the first time the price hit over 200,000 won since the stock debuted on much fanfare three months ago.

The latest rally was sparked by the news on Friday that Big Hit is likely forging a stock swap deal with Naver to cooperate in the content business targeting K-pop and global fans.

Detailed scale was undisclosed, but analysts expect the deal would amount to 100-300 billion won ($90.6-271.8 million), considering the previous swaps the internet giant has made with other content companies.

“On top of that, Big Hit Entertainment is estimated to have earned an operating profit of 69.8 billion won for the quarter ended December last year with sales of 368.6 billion won, better than the market estimates,” said Kim Hyung-yong, an analyst at Hyundai Motor Securities.

A partnership with Naver could be fresh traction for Big Hit Entertainment by creating synergy on the platform business of both companies. Naver also expects the cooperation will help it become a global leader in the online performance platform business by hosting online K-pop concerts and other events for global K-pop fans.

[Photo by Naver]

Naver currently operates a video streaming service dubbed V Live, which allows Korean celebrities to broadcast live videos on the internet and live chat with fans from around the globe. The platform on a roll riding on K-pop superstars like BTS, BLACKPINK and EXO surpassed 100 million downloads with 1,603 celebrity channels last year since the launch in 2015.

Big Hit also runs own fan community platform Weverse with downloads of above 17 million and subscribed users of 19.2 million as of the end of last year. The number of postings uploaded by the septet and fans totals nearly 117 million.

BTS’s online concert “Map of the Soul ON:E was watched by 990,000 viewers from all across the world in October last year, generating 54 billion won in estimated revenue. Global fans have easier access to online concerts, which is good for the entertainment industry.

“Global music labels also are showing interest in Korean live streaming platforms after the recent success of K-pop stars amid the global pandemic. If they enter the platform and hold an online concert, it would be a great opportunity for platform operators to earn global recognition,” said an industry insider.

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