On March 16th, the last Seoul encore concert of aespa's world tour, covering 18 countries, was held at the KSPO Dome in Olympic Park, Seoul. Aespa showcased hit songs such as 'Next Level' and 'Supernova.' During the performance, when the backup dancers spread out on stage like flowers to the killing part of 'Whiplash,' cheers erupted from the audience. With approximately 10,000 fans in attendance, this concert marked the conclusion of aespa's world tour that lasted about nine months.
On February 28th, a month earlier, J-Hope of BTS announced the start of his world tour at the same venue. Opening the concert with 'What If,' he passionately performed hit songs like 'Chicken Noodle Soup,' eliciting cheers from the fandom Army. He has since conducted over 30 performances in total across 15 cities, including Brooklyn, Chicago, Mexico City, and Manila, Saitama.
South Korea's representative entertainment corporations are recovering. Despite the typically poor performance in the first quarter, they are showing strong results, driven by world tours and merchandise sales.
The stock prices of entertainment corporations have also continued to rise following performance announcements. Analysts predict that the four entertainment companies will maintain strong results in the second quarter due to the world tours and the lifting of China's ban on K-pop.
◇K-pop's major agencies see 'dramatic increase' in operating profit in Q1 this year
HYBE announced on the 29th that its consolidated revenue for the first quarter reached 500.6 billion won, with an operating profit of 21.6 billion won. This represents respective increases of 39% and 50% compared to the same period last year, marking the highest first-quarter results since HYBE's establishment.
SM also announced on the 7th that its consolidated revenue for the first quarter stood at 231.4 billion won, with an operating profit of 32.6 billion won. Both revenue and operating profit increased by 5.2% and 109%, respectively, compared to the same period of the previous year.
YG Entertainment and JYP Entertainment's results for the first quarter of this year have not yet been released; however, domestic securities firms anticipate that the revenue for the two companies will reach 100.8 billion won and 122.8 billion won, with operating profits of 400 million won and 20.3 billion won, respectively. Excluding JYP, which is expected to see a decline in both revenue and operating profit compared to last year, three out of the four major agencies have shown improved results.
Typically, the first quarter is a time when artists who have wrapped up their year-end activities regroup, leading to relatively lower revenues for agencies. Nevertheless, this year, the expansion of artists' world tours and increased revenue from merchandise sales have served as key drivers for growth in operating profit even in the first quarter.
In particular, in the case of HYBE, major artists such as J-Hope from BTS, Seventeen, Tomorrow X Together (TXT), and ENHYPEN have embarked on global tours, resulting in concert revenue reaching 155.2 billion won, more than three times the amount from a year ago. Character merchandise utilizing artist intellectual property has also become popular, with revenue from merchandise and licensing rising 75% from 60.7 billion won the previous year to 106.4 billion won in the first quarter.
SM also benefited from increased concert revenue and music streaming sales. It recorded revenue of 39 billion won from overseas concert performances, a 58% increase compared to the same period last year. NCT 127 held 18 performances, aespa held 16, and Dongbang held 10. Additionally, music streaming revenue increased by 23.1%, further improving performance.
◇With strong performance, K-entertainment stocks continue to rise
As entertainment companies' performances improve, K-entertainment stocks are also on the upswing. The stock prices of the four major entertainment companies had been rising since the beginning of the year, but fluctuated around March, showing signs of stagnation. However, following the strong performance from entertainment companies and signals from China about lifting the ban on K-pop, stock prices have begun to rise again.
HYBE's stock price continued to rise after the performance announcement, increasing from 228,000 won to 270,000 won, a gain of 18.4%. On the 9th, it even hit a new high during trading. SM's stock also continued to rise, reaching 112,200 won from 127,500 won following HYBE's performance announcement. Although it slightly retraced after its own performance announcement, it returned to an upward trend as of the 9th.
YG's stock price showed four consecutive days of increase after HYBE's performance announcement, but slightly retraced on the 8th. On the 9th, the stock price rose 4.62% in a single day, reaching a high of 78,000 won during trading. JYP's stock rose for three consecutive days after HYBE's performance announcement but has since shown fluctuations.
Securities analysts expect that this quarter's strong results will continue into the second half of the year, as the four entertainment companies have distinct factors for improved performance lined up.
SM plans to include the performance results of its high-profit fan communication platform, 'DearU,' in its consolidated earnings starting from the second quarter. JYP is also preparing for a large-scale world tour for Stray Kids in the second quarter. Moreover, HYBE has scheduled full-group activities for BTS in the second half of the year, while YG is set to hold an 18-show world tour led by its representative artist, BLACKPINK.
Additionally, if the lifting of China's ban on K-pop and the U.S.-China conflict yield indirect benefits, strong growth is expected to continue into the second half of the year.
Lee Sun-hwa, a researcher at KB Securities, noted, 'Recently, the international situation has been turning favorable for the K-pop entertainment industry,' adding, 'As the U.S.-China trade conflict intensifies, the industry is expected to benefit from being free from U.S. tariff impacts and from improved relations with China, facilitating cultural exchanges between Korea and China.'