Impact on HYBE's earnings to be limited despite dispute with Ador: analystsPosted : 2024-04-23

15:58Updated : 2024-04-24 09:32 Lee Yeon-woo Print Preview Font Size Up Font Size Down
facebooktwitterkakaolinkwhatsappredditmailtolink A visitor takes a photo at the main building of HYBE,
the Korean entertainment giant behind BTS, in Seoul, Feb. 10. Yonhap A visitor takes a photo at the main
building of HYBE, the Korean entertainment giant behind BTS, in Seoul, Feb. 10. Yonhap Favorable
market sentiment toward entertainment stocks unlikely to be affected By Lee Yeon-woo HYBE's stock
price turned bearish for two consecutive days amid a dispute between the K-pop powerhouse and Ador, its
subsidiary label responsible for launching the hugely successful girl group, NewJeans. However, analysts
predict that the incident will have only a limited impact on HYBE's earnings and the future musical
endeavors of the girl group. On Tuesday, the price of HYBE shares closed at 210,000 won ($152.39) after
closing at 212,500 won, Monday, down 7.81 percent from the previous session, significantly reducing the
company's market capitalization from 9.6 trillion won to 8.8 trillion won. News of an audit launched
against the management of Ador, including CEO Min Hee-jin, caused the sharp decline in the stock price.
Accusing the Ador CEO of attempting to spin off the affiliate from the parent, HYBE sent a formal
inquiry letter with a deadline on Tuesday. Currently, the Ador label is 80 percent owned by HYBE, with
Min holding 18 percent, and the rest of the management team holding 2 percent. On the other hand, Min
asserted that the core issue started with Belift Lab, another subsidiary of HYBE, which copied NewJeans
when creating a new girl group called ILLIT. However, securities analysts forecast that the dispute will
have a minimal impact on HYBE's earnings performance. Retail investors also saw this as an opportunity
for bargain hunting, snapping up stocks that institutional and foreign investors had sold off. What's behind
internal strife at HYBE? What's behind internal strife at HYBE? 2024-04-24 13:44 | K-pop Author of
Ador's 'internal document' refutes allegations of spinoff plot Author of Ador's 'internal document' refutes
allegations of spinoff plot 2024-04-24 09:32 | K-pop "Ador's contribution to HYBE's earnings was 11
percent last year," said Lee Hwa-jeong, an analyst at NH Investment & Securities. Estimating Ador's
contribution at 14 percent this year, Lee noted that the ratio "will continue to decrease even more next
year, with all members of BTS resuming their activities." K-pop girl group NewJeans / Courtesy of Ador
K-pop girl group NewJeans / Courtesy of Ador Furthermore, the dispute is not expected to impact
NewJeans' future performances. "NewJeans is under exclusive contract with Ador. As HYBE owns 80
percent of the Ador's shares, NewJeans still falls within HYBE's intellectual property (IP)," Ahn Do-
young, a Korea Investment & Securities researcher, said. "Both HYBE and Ador would not want to
damage NewJeans' IP, so it is unlikely their musical activities (anticipated in May) will be impacted by
the dispute." Securities firms that issued reports on HYBE on Tuesday all maintained a "buy" investment
rating along with their existing target prices of around 310,000 won. However, according to Oh Ji-woo,
an analyst at eBest Investment & Securities, the short-term price of HYBE's shares will inevitably display
volatility as Ador is audited. Even though investors had feared that the dispute would dampen the growth
momentum of entertainment stocks, their impact is also considered to be limited. Lee Jae-won, an analyst
at Shinhan Securities, noted that entertainment stocks have continued to strengthen for the second
consecutive trading day, driven by the perception that prices have bottomed out and expectations rise for a
comeback by each leading group. Notably, shares of another K-pop powerhouse, SM Entertainment, saw
a strong upward trend on Tuesday, fueled by the successful debut of RIIZE and NCT WISH. The stock
closed at 86,400 won, up 5.88 percent compared to the previous session. Impact on HYBE's earnings to
be limited despite dispute with Ador: analystsPosted : 2024-04-23 15:58Updated : 2024-04-24 09:32 Lee
Yeon-woo Print Preview Font Size Up Font Size Down
facebooktwitterkakaolinkwhatsappredditmailtolink A visitor takes a photo at the main building of HYBE,
the Korean entertainment giant behind BTS, in Seoul, Feb. 10. Yonhap A visitor takes a photo at the main
building of HYBE, the Korean entertainment giant behind BTS, in Seoul, Feb. 10. Yonhap Favorable
market sentiment toward entertainment stocks unlikely to be affected By Lee Yeon-woo HYBE's stock
price turned bearish for two consecutive days amid a dispute between the K-pop powerhouse and Ador, its
subsidiary label responsible for launching the hugely successful girl group, NewJeans. However, analysts
predict that the incident will have only a limited impact on HYBE's earnings and the future musical
endeavors of the girl group. On Tuesday, the price of HYBE shares closed at 210,000 won ($152.39) after
closing at 212,500 won, Monday, down 7.81 percent from the previous session, significantly reducing the
company's market capitalization from 9.6 trillion won to 8.8 trillion won. News of an audit launched
against the management of Ador, including CEO Min Hee-jin, caused the sharp decline in the stock price.
Accusing the Ador CEO of attempting to spin off the affiliate from the parent, HYBE sent a formal
inquiry letter with a deadline on Tuesday. Currently, the Ador label is 80 percent owned by HYBE, with
Min holding 18 percent, and the rest of the management team holding 2 percent. On the other hand, Min
asserted that the core issue started with Belift Lab, another subsidiary of HYBE, which copied NewJeans
when creating a new girl group called ILLIT. However, securities analysts forecast that the dispute will
have a minimal impact on HYBE's earnings performance. Retail investors also saw this as an opportunity
for bargain hunting, snapping up stocks that institutional and foreign investors had sold off. What's behind
internal strife at HYBE? What's behind internal strife at HYBE? 2024-04-24 13:44 | K-pop Author of
Ador's 'internal document' refutes allegations of spinoff plot Author of Ador's 'internal document' refutes
allegations of spinoff plot 2024-04-24 09:32 | K-pop "Ador's contribution to HYBE's earnings was 11
percent last year," said Lee Hwa-jeong, an analyst at NH Investment & Securities. Estimating Ador's
contribution at 14 percent this year, Lee noted that the ratio "will continue to decrease even more next
year, with all members of BTS resuming their activities." K-pop girl group NewJeans / Courtesy of Ador
K-pop girl group NewJeans / Courtesy of Ador Furthermore, the dispute is not expected to impact
NewJeans' future performances. "NewJeans is under exclusive contract with Ador. As HYBE owns 80
percent of the Ador's shares, NewJeans still falls within HYBE's intellectual property (IP)," Ahn Do-
young, a Korea Investment & Securities researcher, said. "Both HYBE and Ador would not want to
damage NewJeans' IP, so it is unlikely their musical activities (anticipated in May) will be impacted by
the dispute." Securities firms that issued reports on HYBE on Tuesday all maintained a "buy" investment
rating along with their existing target prices of around 310,000 won. However, according to Oh Ji-woo,
an analyst at eBest Investment & Securities, the short-term price of HYBE's shares will inevitably display
volatility as Ador is audited. Even though investors had feared that the dispute would dampen the growth
momentum of entertainment stocks, their impact is also considered to be limited. Lee Jae-won, an analyst
at Shinhan Securities, noted that entertainment stocks have continued to strengthen for the second
consecutive trading day, driven by the perception that prices have bottomed out and expectations rise for a
comeback by each leading group. Notably, shares of another K-pop powerhouse, SM Entertainment, saw
a strong upward trend on Tuesday, fueled by the successful debut of RIIZE and NCT WISH. The stock
closed at 86,400 won, up 5.88 percent compared to the previous session. Impact on HYBE's earnings to
be limited despite dispute with Ador: analystsPosted : 2024-04-23 15:58Updated : 2024-04-24 09:32 Lee
Yeon-woo Print Preview Font Size Up Font Size Down
facebooktwitterkakaolinkwhatsappredditmailtolink A visitor takes a photo at the main building of HYBE,
the Korean entertainment giant behind BTS, in Seoul, Feb. 10. Yonhap A visitor takes a photo at the main
building of HYBE, the Korean entertainment giant behind BTS, in Seoul, Feb. 10. Yonhap Favorable
market sentiment toward entertainment stocks unlikely to be affected By Lee Yeon-woo HYBE's stock
price turned bearish for two consecutive days amid a dispute between the K-pop powerhouse and Ador, its
subsidiary label responsible for launching the hugely successful girl group, NewJeans. However, analysts
predict that the incident will have only a limited impact on HYBE's earnings and the future musical
endeavors of the girl group. On Tuesday, the price of HYBE shares closed at 210,000 won ($152.39) after
closing at 212,500 won, Monday, down 7.81 percent from the previous session, significantly reducing the
company's market capitalization from 9.6 trillion won to 8.8 trillion won. News of an audit launched
against the management of Ador, including CEO Min Hee-jin, caused the sharp decline in the stock price.
Accusing the Ador CEO of attempting to spin off the affiliate from the parent, HYBE sent a formal
inquiry letter with a deadline on Tuesday. Currently, the Ador label is 80 percent owned by HYBE, with
Min holding 18 percent, and the rest of the management team holding 2 percent. On the other hand, Min
asserted that the core issue started with Belift Lab, another subsidiary of HYBE, which copied NewJeans
when creating a new girl group called ILLIT. However, securities analysts forecast that the dispute will
have a minimal impact on HYBE's earnings performance. Retail investors also saw this as an opportunity
for bargain hunting, snapping up stocks that institutional and foreign investors had sold off. What's behind
internal strife at HYBE? What's behind internal strife at HYBE? 2024-04-24 13:44 | K-pop Author of
Ador's 'internal document' refutes allegations of spinoff plot Author of Ador's 'internal document' refutes
allegations of spinoff plot 2024-04-24 09:32 | K-pop "Ador's contribution to HYBE's earnings was 11
percent last year," said Lee Hwa-jeong, an analyst at NH Investment & Securities. Estimating Ador's
contribution at 14 percent this year, Lee noted that the ratio "will continue to decrease even more next
year, with all members of BTS resuming their activities." K-pop girl group NewJeans / Courtesy of Ador
K-pop girl group NewJeans / Courtesy of Ador Furthermore, the dispute is not expected to impact
NewJeans' future performances. "NewJeans is under exclusive contract with Ador. As HYBE owns 80
percent of the Ador's shares, NewJeans still falls within HYBE's intellectual property (IP)," Ahn Do-
young, a Korea Investment & Securities researcher, said. "Both HYBE and Ador would not want to
damage NewJeans' IP, so it is unlikely their musical activities (anticipated in May) will be impacted by
the dispute." Securities firms that issued reports on HYBE on Tuesday all maintained a "buy" investment
rating along with their existing target prices of around 310,000 won. However, according to Oh Ji-woo,
an analyst at eBest Investment & Securities, the short-term price of HYBE's shares will inevitably display
volatility as Ador is audited. Even though investors had feared that the dispute would dampen the growth
momentum of entertainment stocks, their impact is also considered to be limited. Lee Jae-won, an analyst
at Shinhan Securities, noted that entertainment stocks have continued to strengthen for the second
consecutive trading day, driven by the perception that prices have bottomed out and expectations rise for a
comeback by each leading group. Notably, shares of another K-pop powerhouse, SM Entertainment, saw
a strong upward trend on Tuesday, fueled by the successful debut of RIIZE and NCT WISH. The stock
closed at 86,400 won, up 5.88 percent compared to the previous session.