Hybe’s market value jumps on BTS’ new single ‘Butter’

The South Korean entertainment agency behind the global sensation BTS saw its market valuation exceed 10 trillion won ($8.95 billion) for the first time, as the boy band’s new single “Butter” swept global charts.

After closing at 282,000 won per share on the nation’s main bourse Kospi Monday, Hybe’s market valuation exceeded 10 trillion won and continued its winning streak on Tuesday rising 2.48 percent to 289,000 won at close. The benchmark Kospi, the country‘s main stock bourse, inched up 0.20 percent on the same day.

Both institutional and foreign investors appeared to be amassing Hybe shares. Institutional investors remained net buyers for eight straight trading days until Tuesday. Foreign ownership of the Seoul-based entertainment agency also soared to 11.25 percent on Tuesday. Overseas investors held a combined 3.62 percent by the time of its market debut last year.

The entertainment powerhouse went public on Oct. 15, 2020, in a mega IPO deal with the share price closing at 258,000 won on its first trading day. The price, however, fell as low as 142,000 won by Oct. 30.

Analysts attributed Hybe’s recent strong upward streak to BTS’ new single “Butter” which topped Billboard’s Hot 100 Chart for three straight weeks, breaking the band’s previous record of two weeks at the top.

Local brokerages put the target price of Hybe above 350,000 won, with Hana Finance and Investment suggesting 360,000 won and SK Securities 350,000 won.

“Once BTS resumes concert tours, Hybe could achieve a quarterly operating profit of 100 billion won on the back of both online and offline events,” said Lee Gi-hoon, an analyst at Hana Financial Investment. Lee’s prediction was based on the revenue from BTS’ previous online events.

Backed by BTS’ two-day online concerts in the last quarter of 2020, which were viewed by 990,000 fans, Hybe recorded 80.9 billion won in revenue, well above the 2019 performance of 78 billion won.

Another two-day online concert that marked the group’s 8th anniversary took place over Sunday and Monday. It attracted 1.33 million viewers and the revenue is estimated to reach as high as 79.1 billion won.

“Starting from online fan meetings on June 13 and 14, BTS can have at least two more online concerts in the second half of this year. Considering that concert viewers have been rising, Hybe could easily achieve at least 20 billion won in revenue from fan meeting ticket sales alone,” wrote Lee Hyun-ji, an analyst at Eugene Investment and Securities.

Hybe saw its revenue jump 29.9 percent from a year ago to 178.3 billion won in the first quarter and its operating profit of 21.7 billion won was up 9 percent from a year ago.

On April 2, Hybe, previously Big Hit Entertainment, acquired a 100 percent stake in US-based integrated media company Ithaca Holdings for 1.18 trillion won. Ithaca Holdings is behind many chart-topping artists, including Justin Bieber and Ariana Grande.

By Park Ga-young (gypark@heraldcorp.com)