K-pop is a music phenomenon that extends far beyond South Korea – and for investors looking to make money, there are only a few major agencies behind the more than 300 groups. Bokyung Suh, director and senior research analyst at Bernstein, is especially positive on one of these issues. His pick is K-pop agency Hybe, which he has given an outperform rating and a target price of 350,000 South Korean won ($258) – or an increase of about 44% from Tuesday’s closing price. Hybe’s artist roster includes BTS, one of the biggest South Korean boy bands. Kospi-listed Hybe is one of K-pop’s most prominent players, along with Kosdaq-listed SM Entertainment, JYP Entertainment and YG Entertainment. “I believe in the sector because of the long-term growth and the macro trend,” Suh told CNBC’s Street Signs on Monday. Although Bernstein only covers Hybe, Suh said, “as long as the global players like Disney, Netflix and Spotify will spend more and more money on K-content, the biggest beneficiaries will be the neighboring K-pop players and the value chain as well.” He estimates that there are approximately 500 million K-pop fans in the world, and he expects that number to grow further. Suh highlighted that Netflix announced in April that it would invest $2.5 billion in South Korean media over the next four years. He also pointed to Netflix CEO Ted Sarandos’ visit to South Korea in June, where Sarandos revealed that viewership of “K-content” increased sixfold in the past four years alone, and that more than 90% of viewers of Korean romance shows on Netflix from outside the country. Why the Hybe hype Suh has a specific reason for choosing Hybe: the ‘diversification’ of its intellectual property. “We know that entertainment is often regarded as a lottery business because we cannot easily predict the future and performance before launching IP such as Squid Game or Game of Thrones. So this is why the world’s leading entertainment player companies are trying to diversify their IP portfolio to run their business more sustainably.” According to Suh, BTS represents about 32.8% of Hybe’s revenue, followed by boy band Seventeen (30%), which is managed by Hybe subsidiary Pledis Entertainment. Rookie boy band Tomorrow Recently, Hybe extended its contracts with BTS indefinitely, a development that will allay concerns about Hybe’s “long-term growth story,” Suh wrote in a Sept. 20 note. BTS’ contract expired in 2024. “We believe this will generate very positive sentiment as it proves the company’s strong talent management skills and transparent and flexible IR practice.” In contrast, shares recently plummeted following media reports that three of the four members of girl group Blackpink would not renew their contracts with YG Entertainment. Because BTS members have already begun or will begin South Korea’s two-year mandatory military service, Suh said, the band’s reunion — and its impact on Hybe’s balance sheet — will take place around early 2026.
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