YG Entertainment stocks plummet after BabyMonster debut

Industry

Published: 06 Dec. 2023, 06:00 Updated: 07 Dec. 2023, 11:38

YG Entertainment stocks plummet after BabyMonster debut

YG Entertainment's girl group BabyMonster [YG ENTERTAINMENT]

The debut of YG Entertainment's BabyMonster has been underwhelming, to say the least, in Korean stock markets. YG's shares have slipped for seven consecutive trading days following the highly anticipated girl group’s debut.

The closing prices of YG Entertainment's stocks declined a combined 10.78 percentage points between Nov. 27, the day BabyMonster released its digital single, and Tuesday.

The Tuesday price declined 1.84 percent from the day before to close at 48,000 won ($36.51).

The band was widely expected to become the YG's next breadwinner in line after Blackpink, whose four members' contracts expired in August.

Rumors have proliferated online regarding whether the four members will extend their exclusive contracts with the K-pop agency, but YG has kept its mouth sealed about the outcome.

With Blackpink’s official status still a question mark, BabyMonster debuted on the K-pop scene as Blackpink's de facto successor — YG's first new girl group to debut in seven years and its first new band in three, following Treasure in 2020.

Consisting of two Korean, two Thai and two Japanese members, BabyMonster debuted with hip-hop single “Batter Up” on Nov. 27, delving into a music genre that characterizes the agency. The song's star-studded lineup included former YG chief Yang Hyun-suk leading production as well as hit producers such as DEE. P, BIGTONE, Lee Chan-hyuk of AKMU and Choi Hyun-suk of Treasure.

The girl group did debut with a bang. Its debut music video surpassed 22.59 million views within 24 hours of release, breaking the record for most views of a K-pop group's debut music video and topping iTunes song charts in 14 countries. “Batter Up” was also the first song of 2023 from a debuting band to enter the U.S. iTunes Top 50 Chart.

But despite the global records, local sentiment has turned a more critical eye toward the rookie group.

“YG’s music videos are always the same,” one post uploaded to an online community said, including various video captures of Jinusean, 2NE1, Blackpink and BabyMonster. “The rule of thumb for YG is that they have the members ride really expensive cars and look all hip.”

Another post commented that the track was “below expectations.”

“Everything, from the music video, styling, and song quality etc.,” the poster wrote. “The group’s debut seems really rushed, like they had a deadline to meet or something.”

Analysts also maintained conservative approach to YG’s annual earnings this year due to Blackpink’s reduced presence as a group in recent months.

“As our estimates exclude major artist Blackpink, negative year-on-year growth seems inevitable,” said a Yuanta Securities report. “We estimate YG Entertainment’s 2024 consolidated sales to fall 32.7 percent on year to 363.9 billion won and operating profit to plunge 51.5 percent on year to 46.2 billion won.”

According to the report, monthly sales in November for Blackpink’s intellectual property fell 32.6 percent on year, while Treasure's fell 10.7 percent.

Album sales volume is also likely to fall in the upcoming year, Yuanta Securities said.

“New albums from rookie groups BabyMonster should partially offset Blackpink’s absence,” it said. “Combined album sales volume of K-pop IP under YG will likely fall 18.7 percent on year to 4.26 million copies in 2024.”

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