November 22, 2024

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[THE INVESTOR] On the back of K-pop boy band BTS’ meteoric rise, its label Big Hit Entertainment’s market value could top 2 trillion won (US$1.85 billion) when it goes public, beating its bigger domestic rivals, market experts said on May 29.
 
“Big Hit could beat SM Entertainment to reach 2 trillion won in market value if it goes through with an IPO,” said Lee Ki-hoon, an analyst with Hana Financial investment. 

BTS. Bit Hit Entertainment

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In a recent interview, Big Hit founder and CEO Bang Si-hyuk said he is mulling a possible IPO. 

The agency is home of BTS, the fast-rising boy band that became the first K-pop group to top the US Billboard 200 chart on May 27 with its new album “Love Yourself: Tear.” 

The markets have been predicting its IPO for the past 1 1/2 years. Industry watchers now believe the label will apply for a preliminary screening in the second half of this year. 

Big Hit stocks were estimated to be worth around 783 billion won in March when local game developer Netmarble bought 25.7 percent stake for 201.4 billion won. 

As of May 29, the market cap of SM came to 918 billion won, followed by JYP with 849 billion won and YG with 519 billion won.

In terms of operating profit, Big Hit has already bested these three K-pop powerhouses. Last year, its operating profit stood at 32.5 billion won, up 213.5 percent on-year. The figure for SM was 25.6 billion won, while YG posted 25.8 billion won and JYP had 17.9 billion won. 

This year, Hana Financial expects Big Hit’s sales to exceed 150 billion, while posting an operating profit of 50 billion won.

By Ahn Sung-mi (sahn@heraldcorp.com)