Hana Securities noted on the 28th that they expect various synergies from Tencent Music, which has newly become the second-largest shareholder of SME. They raised the target price from the previous 150,000 won to 170,000 won while maintaining an investment opinion of 'buy.' On the previous transaction day, SME's stock price was 129,900 won.
The next day, HYBE, which was the second-largest shareholder of SME, announced that it would sell all of its 9.66% equity at 110,000 won per share to Tencent Music. Lee Gi-hoon, a researcher at Hana Securities, evaluated, "Considering that concerns about an overhang (potential selling pressure) were inevitable at a price higher than HYBE's public purchase price of 120,000 won, resolving this alone is quite positive."
With Tencent investing not only in Kakao but also in SME, various synergies are expected in future business opportunities in China. Referring to the most recent performance conference of Tencent Music, notable points related to K-pop include ▲contract renewals with YG Entertainment and Starship (Kakao Entertainment) ▲official light stick and other merchandise sales of G-Dragon in mainland China ▲the first exhibition of aespa and a pop-up store for BABYMONSTER.
The researcher suggested that it can be inferred that there will be synergies in various management areas such as records and music, as well as secondary rights, in the future with SME. He noted, "The entry of DearU into China is expected to occur as early as June, and it is necessary to pay attention as synergies from collaboration in China can be confirmed immediately."
Hana Securities emphasized that with the military discharge of BTS and the comeback of BLACKPINK, along with expectations for easing the ban on Korean cultural products, the environment for K-pop industry stock prices is inevitably on the rise. The researcher stated, "The strong sales of RIIZE's album and valuation have also been slightly reflected, raising the target price by 13% and maintaining the top pick."