South Korea's Big 4 entertainment stocks—HYBE, SM Entertainment, JYP Entertainment, and YG Entertainment—declined 30% to 40% in the first half of the year as of July 10. HYBE fell 33.2% to 220,500 won, SM dropped 42.6% to 77,500 won, JYP declined 30.2% to 50,700 won, and YG decreased 39.2% to 69,400 won compared to early this year. The underperformance occurred as investor capital flowed toward semiconductor and artificial intelligence stocks, while upfront costs for world tours and new artist development weighed on near-term profitability. Despite BTS resuming its world tour and BIGBANG announcing a 20th anniversary comeback, entertainment stocks lagged the broader KOSPI index's gains driven by technology sectors.
Entertainment Stocks Record 30-40% Decline in First Half
According to Korea Exchange data released July 10, the four major entertainment companies saw uniform weakness this year. Securities firms attribute the decline to early-year expectations around BTS's return already being priced into stocks, followed by capital rotation into semiconductor and AI-related equities. Expanded investment in new intellectual property and rising world tour preparation costs raised concerns about short-term profitability, leading to wider valuation discounts.
Most securities firms recently lowered target prices for entertainment stocks. HYBE's target price range stands at 330,000-350,000 won, SM Entertainment at around 109,000 won, JYP Entertainment at approximately 80,000 won, and YG Entertainment at about 64,000 won. Securities analysts clarified these adjustments reflect sector-wide valuation recalibration rather than downgraded earnings forecasts. Analysts maintain that as major artist activities intensify in the second half, earnings should improve rapidly and restore investor sentiment.
HYBE Analysts Project Recovery with BTS World Tour Revenue
HYBE is positioned to lead the sector rebound, according to multiple analyst assessments. BTS began its world tour in April and will perform 88 shows through next March across North America, Europe, South America, and Asia stadium venues. Revenue streams have diversified beyond concerts to include merchandise sales, licensing, and album sales, with earnings improvement effects expected to materialize from the second quarter.
New intellectual properties including BOYNEXTDOOR and KATSEYE are growing rapidly, reducing BTS dependency. Lee Hwan-wook, researcher at Yuanta Securities, stated that "significant earnings improvement is anticipated from the second quarter as BTS world tour results are reflected in full," adding that "BOYNEXTDOOR and KATSEYE tours and new releases, plus potential NewJeans activity resumption, will secure second half earnings and stock price momentum." Heungkuk Securities projected HYBE will record its largest-ever quarterly results in the second quarter, while LS Securities assessed it as "a second quarter that will confirm high caliber."
SM, JYP, and YG Schedule Major Artist Activities for Second Half
SM Entertainment plans to launch aespa's third world tour starting with Seoul Gocheok Sky Dome performances in August, while junior groups RIIZE, NCT WISH, and Hearts2Hearts continue growth trajectories. Existing properties including EXO maintain stable fandoms, positioning SM for the most stable earnings flow among the Big 4. Lee Hwa-jung, researcher at NH Investment & Securities, noted that "stable earnings continue due to profitability enhancement of junior IP and lifecycle extension of existing IP," adding that "as SM is the first K-pop agency to secure an official merchandise store in China, the fastest benefits are expected when Chinese concerts resume."
JYP Entertainment has Stray Kids comebacks and world tour scheduled for the second half, with concert and merchandise sales expected to be fully reflected in earnings. Jung Ji-su, NH Investment & Securities researcher, characterized it as "a crouching process before takeoff," while Jang Ji-hye, Kiwoom Securities researcher, projected "solid fundamentals will be proven in the second half."
YG Entertainment's primary momentum centers on BIGBANG's upcoming stadium and dome world tour spanning 18 cities and 31 performances from August through next February. Lee Hwa-jung of NH Investment & Securities titled a report "The Relief Pitcher is None Other Than BIGBANG," stating that "junior artists opening the upside, junior artists closing the downside," and projecting that "with BABYMONSTER and TREASURE supporting earnings, BIGBANG will lead earnings improvement."
FAQ
What caused South Korean entertainment stocks to decline in the first half of the year?
The stocks fell as investor capital shifted toward semiconductor and AI-related equities, while upfront costs for world tours and new artist development raised concerns about near-term profitability. Despite major artist activities including BTS's world tour resumption, entertainment stocks underperformed as the broader market focused on technology sectors.
When is HYBE expected to show earnings improvement from BTS activities?
Analysts project HYBE will show significant earnings improvement starting from the second quarter, as BTS world tour results—which began in April and continue through next March with 88 total shows—are reflected in financial results. Revenue streams include concert ticket sales, merchandise, licensing, and album sales.
What major K-pop artist activities are scheduled for the second half?
BIGBANG will conduct a world tour from August through next February with 31 performances across 18 cities. Aespa begins its third world tour in August starting with Seoul performances. Stray Kids has comebacks and world tour dates scheduled, while multiple junior groups from SM, JYP, and YG continue active promotions.
