JYP's shares soar on success of artists, hopes for new girl group

JYP Entertainment's boy band Stray Kids [JYP ENTERTAINMENT]

JYP Entertainment’s shares are soaring, fueled by the success of its artists such as boy band Stray Kids and rising anticipation over the debut of its North American girl group.

JYP Entertainment’s shares have seen a steep rise since mid-May after the release of JYP's first-quarter earnings report. Quarterly net profit skyrocketed 155 percent on year to 42.7 billion won ($33.4 million), while revenue soared 74 percent to 118 billion won. The K-pop agency's shares jumped 41 percent on Wednesday compared to its closing price on May 15. They inched up 1.35 percent on Wednesday compared to the previous day, closing at 135,000 won.

Korea's four major K-pop agencies — HYBE, SM Entertainment, YG Entertainment and JYP Entertainment — have been on a winning streak since early this year with the pandemic subsiding and tours resuming. But spells have been particularly sunny for JYP, whose artists have been keeping out of trouble and growing steady fan bases around the globe.

Its artists' tours are especially fruitful and will lead to a rich second-quarter earnings report, according to analyst Kim Hyun-yong of Hyundai Motor Securities.

“Twice's world tour sold 470,000 tickets in the second quarter, while Stray Kids’ third album released this month sold a record-breaking 6.38 million copies so far," Kim said. "[The sales] are expected to be the highest ever in the history of K-pop.”

Kim anticipates JYP Entertainment will have the highest profit growth rate for the latter half of this year among the four K-pop powerhouses. HYBE and SM Entertainment had a month-long feud over the latter company's management earlier this year, while YG Entertainment struggles to see its rookies fill the shoes of its breadwinner girl group Blackpink.

“Increase in revenue from ticket sales from concerts and sales of merchandise are expected for the second to the fourth quarter and are expected to be sustainable,” said analyst Park Seong-guk at Kyobo Securities. “The total number of albums sold in the second quarter is expected to be 13.88 million, while 1.01 million tickets from artists' concerts are expected to be sold.”

Analysts are also eyeing JYP’s A2K Project, in which the K-pop agency is collaborating with American record label Republic Records, owned by Universal Music, to debut a girl group that will be active in North America.

The group is expected to be revealed sometime this month. JYP will be the first of four K-pop powerhouses to launch a localized K-pop group. The agency held auditions in five American cities to recruit talent from last September.

The North American project is particularly meaningful because the agency's main source of revenue had been in Japan. An additional market opening up in the United States will help boost both online and offline sales, according to analyst Kim.

“The total yearly revenue the K-pop industry has made in 2022 from the U.S., from music such as album sales and the number of streams, and concerts, takes up only 1 and 3 percent of the total U.S. market,” Kim said. “In that aspect, JYP Entertainment’s project has a huge potential.”

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]