JYP Shares Jump 16.28% After Record Quarterly Revenue and Higher Operating Profit
Key Facts
JYP Entertainment shares jumped 16.28% in early trading on the KOSDAQ at 9:30 a.m. on November 12, after the company reported record quarterly revenue for the third quarter the previous day. Revenue reached 267.5 billion won, up 15.0% year over year, while operating profit rose 17.6% to 48.0 billion won. Net profit moved in the opposite direction, falling 10.6% to 24.3 billion won. The stock was at 45,000 won when the move was recorded, up 6,300 won from the previous session. The gains followed results that combined revenue and operating-profit growth with weaker net profit.
Physical albums and merchandise drove a significant part of sales growth. Physical album revenue reached 79.2 billion won, up 18.2% from the same period last year, and the company said Stray Kids album sales in Western markets contributed to performance. Merchandise and collectibles revenue rose to 58.6 billion won, up 46.7% year over year. By contrast, concert revenue fell 31.1% to 43.6 billion won. The results showed a revenue mix tilted toward albums, merchandise and event appearances, while the concert line posted an annual decline.
Non-concert events partly offset weaker concert revenue, with event-appearance revenue rising 138.4% to 26.4 billion won, a quarterly record, according to the company. JYP attributed the increase to Stray Kids' participation in STRAYCITY, a festival the group organized in Latin America, and its appearance as a headliner at Brazil's Rock in Rio festival. The company said these appearances were reflected in event-appearance revenue, not concert revenue. A total of 36 shows were included in concert revenue during the quarter, including 16 large domestic shows whose revenue was recognized on a gross-sales basis. The quarter therefore combined strong growth from events with a decline in recorded concert revenue.
Improved operating performance did not extend to net profit, which fell despite higher operating profit. The results showed other losses of 10.1 billion won during the quarter, compared with other gains of 1.9 billion won in the third quarter of the previous year. The company said the strong won affected net profit through exchange rates and attributed the 10.6% annual decline to that effect. Meanwhile, the operating margin was 17.9%, up 0.4 percentage points from a year earlier. The company linked the margin improvement to album and merchandise sales despite higher costs in some areas.
In its reading of the results, Eugene Investment & Securities maintained its Buy rating on JYP and raised its target price to 55,000 won from 50,000 won, according to coverage published by ChosunBiz on November 12. This coincided with the stock's rise in early trading, while the coverage recorded its price at 45,000 won at 9:30 a.m. The new target price represents an increase of 5,000 won from the previous estimate. The firm bases its outlook on Stray Kids' tour activity and expansion plans, as well as the launch of a new group. The available coverage did not establish whether the stock's gains continued throughout the November 12 session.
JYP's plans for 2027 include a stadium tour by Stray Kids in North America, Europe and Japan. The company set out 14 North American cities in the second quarter and 7 European cities in the third quarter, with attendance exceeding 40,000 per show. It also indicated Japanese shows at Nissan Stadium and Nagai Stadium, after the group performed this year at Tokyo's National Stadium as the first foreign male act to do so. On group expansion, JYP is targeting the official debut of new boy group oftheblue on January 11, 2027. These dates place the stadium tour and the new group's debut among the company's upcoming milestones after its third-quarter results.