Cosmax shares plunge as demand in China weakens

[Courtesy of Cosmax]

Cosmax saw a sharp decline in its stock price, which tumbled over 8 percent in early trading on Friday due to concerns about weak consumer spending in China. Cosmax shares traded at 153,500 won ($110.75) as of 9:08 a.m., down 14,300 won or 8.52 percent from the previous day. The stock initially opened at 163,400 won, down 4,400 won (2.62 percent) from the previous day’s close, and continued to fall throughout the morning.

This downturn follows a 5.99 percent drop in Cosmax stock during the previous day. Hana Securities highlighted the impact of China’s sluggish consumer market, saying, “The unfavorable market environment in China, which is a key revenue driver for Cosmax, could weigh heavily on the company’s consolidated earnings.” China accounts for more than 30 percent of Cosmax’s total sales, which prompted Hana Securities to revise Cosmax’s target stock price down from 220,000 won to 200,000 won.

Conversely, Nexon Games put on an impressive performance during early trading on Friday, with its stock price rising 5.01 percent to 19,690 won by 9:26 a.m., with analysts indicating that the company’s market value was not accurately reflected in its stock price. Nexon’s stock has been influenced by the performance of its recent release, “The First Descendant,” which has shown impressive traffic and rankings. “The initial success of ‘The First Descendant’ was not adequately reflected in the stock price. The game has generated over 10 billion won in total sales and continues to perform well,” SangSangin Securities analyst Choi Seung-ho said. Choi raising his target stock price from 20,000 won to 25,000 won, “considering the pipeline of upcoming releases, Nexon has more promising projects beyond ‘The First Descendant.’”

For their parts, several South Korean entertainment companies, including YG Entertainment, SM Entertainment, and HYBE, saw their shares hit 52-week lows Friday morning due to concerns over poor second-quarter earnings in 2024.

YG Entertainment shares traded at 34,500 won as of 9:35 a.m., down 2.27 percent from the previous session, after hitting an intraday low of 34,000 won. SM Entertainment and HYBE shares also hit new 52-week lows, declining by 3.14 percent and 2.16 percent respectively. JYP Entertainment saw a 1.90 percent decrease compared to the previous session.