BTS’ management agency gears up for IPO

Big Hit Entertainment, the South Korean entertainment management agency behind K-pop sensation BTS, has selected underwriters for its initial public offering in the country’s stock market.

Lead underwriters include NH Investment & Securities, Korea Investment & Securities and JP Morgan, while Mirae Asset Daewoo will also participate in the process.

An IPO underwriter is responsible for offering privately held or newly issued stocks to public investors, while protecting investors in the offered shares.

Big Hit is expected to go through due diligence, a listing eligibility review by stock market operator Korea Exchange, before a public offering.

In 2019, it logged a 587.9 billion won ($484.9 million) revenue, up 175.3 percent on-year, and 97.5 billion won operating profit, up 52.1 percent, according to preliminary data.

Given its performance, market cap of the entertainment firm -- home to BTS, singer Lee Hyun, boy band Tomorrow X Together, as well as girl group GFriend through its subsidiary -- is valued at roughly 4 trillion won, using the price-earnings ratio multiple of earnings among Korea’s listed entertainment firms, at 40 times.

Big Hit founder Bang Si-hyuk is the largest shareholder with 43.06 percent stake as of end-2018. Notable shareholders include game company Netmarble and venture capital firm STIC Investment.

By Son Ji-hyoung (consnow@heraldcorp.com)