YG Entertainment (hereafter YG) recorded an operating profit of 9.5 billion won in the first quarter thanks to its younger groups Baby Monster and Treasure, which follow in the footsteps of Big Bang and Blackpink.

YG has successfully turned to profit with approximately 9.5 billion won in operating profit led by the activities of Baby Monster and Treasure. This can be seen as a generational change in idols, and compared to an operating loss of 7 billion won in the same period last year, it is a complete turnaround into profit.

According to YG’s performance results announced on the 9th, the consolidated operating profit for the first quarter is 9.525 billion won. During the same period, sales increased by 14.7% to 100.2 billion won, exceeding market expectations.

Earlier in February, MERITZ Securities noted, "The revenue from YG's early-stage artists is being reflected faster than expected," and raised its target stock price, observing that the monetization phase of early-stage and new intellectual property rights (IP) has ramped up more quickly than anticipated, resulting in significant outcomes.

Shinhan Investment Corp. also raised its target stock price for YG to 82,000 won, calling it "the currently most undervalued entertainment company." One researcher stated, "From the second quarter, Baby Monster's warm reception will be reflected, and earnings leverage is expected to ramp up with Blackpink's world tour starting in the third quarter."

The background of YG’s first quarter 'earnings surprise' was attributed to Treasure and Baby Monster. Treasure's new release, which was released in March this year, showed strong sales, and Baby Monster's debut album, which was launched in November last year, has gained popularity for nearly six months.

YG announced, "The results show that strategically investing in Treasure and Baby Monster's early-stage IP has driven overall growth," and noted, "Global tours and related concerts and merchandise (goods）business have also contributed to stabilizing our revenue structure."

YG emphasized, "The growth of business related to artist global tours and the increase in merchandise sales have secured profitability and balance in our portfolio, stabilizing our revenue structure," adding, "In the second half of this year, we plan to kick off Blackpink’s tour, alongside new album releases and tours for Treasure and Baby Monster. We will respond quickly to the rising expectations around the lifting of the ban on Korean popular culture and changes in the Chinese market, aiming for sustained growth."

This outcome reverses criticisms regarding the high 'dependency on Blackpink,' attracting further attention.

Despite the activities of each Blackpink member under their respective agencies, they maintain brand collaboration with YG, playing a key role in YG's global image and IP revenue. Successful debut of Baby Monster and Treasure's stability signify that YG has taken a step forward, overcoming 'rookie risk' towards 'generational change.'

In the future, YG sees Hyun Suk Yang as central to the follow-up activities of Baby Monster, Treasure's global concert, and the comeback status of other artists as crucial. This performance is expected to be a turning point and the beginning of a reversal for YG.

[Photo] OSEN DB, provided by YG

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