On May 15, following their assessment of YG Entertainment’s operating profits, Mirae Asset Daewoo Securities discussed SM Entertainment’s performance in the first quarter of 2018.
The firm revealed that SM Entertainment’s target stock price was 40,700 won (approximately $37.76).
Researcher Park Jung Yeop stated, “SM’s first quarter sales and operating profit increased by 62.5 percent and 765.8 percent , respectively, at 110.6 billion won (approximately $103 million) and 10.4 billion won (approximately $9.65 million), right below the market
He explained, “As the stock price does not reflect the changes necessary due to Japanese accounting standards, the current stock price is not doing that badly. The artists returning to their original occupation worked to their advantage.”
Park Jung Yeop also predicted that the company’s second quarter profits would increase by 77.4 percent than last year’s, at 120.1 billion won (approximately $111 million). He also predicted that their operating profits would increase by 730 percent to 11.5 billion won (approximately $10.7 million).
He stated, “The company’s artists are actively promoting domestically as well as abroad. TVXQ has confirmed three large-scale concerts at stadiums. EXO-CBX, NCT, and Red Velvet are emerging in the line-up of the next generation and their fan bases are growing quickly.”
Park Jung Yeop continued, “Due to the off-season for advertising work and the effects of the Olympics, SM C&C had an operating loss of 300 million won (approximately $278,000). However, their future profits will improve compared to their first quarter profits.”
On the influence of other entertainment agencies, he stated, “Because of new subsidiaries such as KeyEast and FNC Ad Culture as well as the establishments of companies in Southeast Asia, [SM] is gradually bringing out their plans for global growth.”
An earlier version of this article misstated that there was decrease in Q1 YoY sales and operating profit. There was an increase, not decrease.