Hybe stock dips amid Q1 underperformance forecasts

[Photo by Kim Ho-young]

Hybe Co. stock prices fell on Thursday over forecasts that its first-quarter performance will fall short of market expectations.

The entertainment company stocks traded at 215,000 won as of 9:32 a.m. on Thursday, down 2.77 percent from the previous market, but recovered from a 4.16 percent drop after the opening.

On the same day Daol Investment & Securities Co. revised its estimate downward, citing expectations that Hybe will fall below the consensus due to decreased concert sales and other factors.

“In addition to insignificant sales volumes as Le Sserafim were the only Hybe artists to return, there has also been a decline in concert sales, merchandise goods, and licensing sales,” Daol analyst Kim Hye-young said, noting that first quarters are traditionally slow for entertainment companies.

Hybe’s operating profit in the first quarter of 2024 was estimated at about 17 billion won ($12.5 million), down 81 percent from the previous quarter and revised 70 percent downward from the previous estimate of 57.1 billion won.

Another factor affecting the share price is the possibility that Hybe will be designated as a large corporate group, which will subject the company to stricter regulatory requirements. Hybe‘s assets totaled 5.35 trillion won at the end of 2023, up 9.8 percent year-on-year, according to the company’s report.

The Korea Fair Trade Commission designates a public company whose fair assets—the assets of all its affiliates plus the total capital of its financial arms—exceed 5 trillion won as a large business group. Once it is designated as such, Hybe, the first large business group in the music industry, will be subject to various regulations, including disclosure requirements and profit-taking prohibitions.