[Alpha Biz= Kim Minyoung] South Korea’s benchmark KOSPI has extended its rally to record highs, but major K-pop entertainment stocks are underperforming amid concerns over weak first-quarter earnings.

According to the Korea Exchange on April 22, the KOSPI has surged 52% year-to-date, while shares of the four major entertainment companies have fallen more than 20%.

SM Entertainment posted the steepest decline, dropping over 31% since the start of the year. HYBE, YG Entertainment, and JYP Entertainment also declined between 12% and 24%, missing out on the broader market rally.

Despite positive developments—including plans for a joint venture to launch a large-scale K-pop festival dubbed “FANOMENON”—analysts say the impact on earnings and share prices will likely be limited. In the entertainment sector, artist performance tends to drive stock valuations more than corporate initiatives.

Even the recent comeback performance by BTS failed to lift sentiment, as lower-than-expected attendance weighed on shares.

Brokerages are cutting target prices for entertainment stocks, citing weak first-quarter performance due to a seasonal slowdown in artist activities. However, some analysts expect a potential rebound in the second quarter, supported by upcoming comebacks and tours, while cautioning that high uncertainty remains due to potential costs from new artist launches and overseas expansion.

 

 

 

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