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Photo = Yonhap news |
[Alpha Biz= Paul Lee] On Tuesday, Yuanta Securities announced an upward revision of its target price for SM Entertainment, increasing it from 110,000 KRW to 120,000 KRW, a 9.09% increase, citing strong expectations for the company’s new girl group debut this month.
Yuanta stated, “The launch of the new flagship girl group, ‘Hats to Hearts,’ will generate strong short-term momentum. As SM’s first new girl group in four years since Aespa, this intellectual property (IP) is expected to establish itself successfully in the market.”
Additionally, Yuanta highlighted that momentum from a new boy group debut in the first half of 2025 will contribute to SM’s continued growth. The firm also pointed to Aespa’s expanding global recognition, its world tour’s strong revenue impact, and RIIZE’s high growth trajectory as key factors expected to sustain positive market sentiment for SM throughout the year.
In Q4 2024, SM Entertainment reported a revenue of 273.8 billion KRW and an operating profit of 33.9 billion KRW, significantly exceeding market expectations (consensus of 22 billion KRW).
Yuanta attributed this earnings surprise to strong music and merchandise (MD) sales, expanded drama production, improved product mix, and a revised incentive recognition strategy that distributes bonuses quarterly.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
