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Photo = Yonhap news |
[Alpha Biz= Paul Lee] Hana Financial Investment has maintained a "Buy" rating on SM Entertainment and raised its target price from 110,000 won to 130,000 won, citing increased profits from expanding the fan base of its younger-age lineup and the improved performance of its loss-making subsidiaries, which are expected to improve the company's operating profit margin. The previous closing price was 105,000 won.
Hana Financial Investment stated, "SM is in the process of shifting from a portfolio centered around NCT, which debuted in the late 2010s, to a portfolio focused on younger-age artists who debuted in the 2020s." The firm noted that while aespa continues to perform well, new groups like RIIZE, which debuted in 2023, and NCT WISH, which debuted in 2024, are rapidly forming their fan bases and contributing to the increased share of younger-age revenue.
The investment firm also pointed out, "Monetization efforts have intensified, with a much tighter schedule for album releases, concerts, and MD products compared to the past." SM's younger-age artists, including aespa, RIIZE, NCT WISH, HATS to HATS, Mark, Doyoung, and Kai, are expected to release albums in the second quarter, driving sales growth of albums from younger-age lineups.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
