SM Entertainment Stocks Fall As Album Sales Slow Earnings Estimates

Entertainment stocks fall as album sales slow earnings estimates.

On Feb. 27 At 3:10 PM KST, HYBE’s stock price had declined 15,500 won (7.13%) from the previous trading day to 202,000 won. The afternoon’s negative trend made it hard for the corporation to retain 200,000 won.

Other major entertainment firms’ stock prices fell. JYP Entertainment’s shares declined 2,800 won (3.63%) to 74,400 won, while SM Entertainment’s fell 2,700 won (3.35%) to 78,000 won. YG Entertainment’s shares fell 1,300 won (3.09%) to 40,800 won.

Securities companies lowered their target stock prices due to weak album sales growth, predicting a drop in industry valuation.

Despite HYBE’s statement the day before of record sales and operational profit in the previous year, questions arose about K-pop album sales growth slowing. While HYBE succeeded thanks to BTS members and Seventeen’s solo efforts, other companies struggled to satisfy market expectations.

Hana Securities analyst Lee Ki Hoon forecast reduced fourth-quarter operating profitability for JYP Entertainment, SM Entertainment, and YG Entertainment. These projections were influenced by slow album sales, notably in China. SM Entertainment also reported a drop in album sales in the fourth quarter, with aespa’s current album selling poorly compared to previous releases.

Despite Stray Kids’ popularity, ITZY’s latest album sales worried JYP Entertainment. The initial sales of ITZY’s 8th mini-album were lower than previous albums, showing industry issues despite individual accomplishments.