According to Korea Investment & Securities, this adjustment caused SM Entertainment's stock price to decrease from 167,000 won (125 USD)/share to 150,000 won (112 USD)/share. This figure has caused Naver to be concerned about SM's revenue results in the fourth quarter of 2023.
On the same day, researcher Ahn Doyoung predicted that SM's operating profit in the fourth quarter could be 28.4 billion won (21.2 million USD), lower than the previous market forecast of 34.8 billion won (26 million USD).
According to researcher Ahn, the main factor contributing to this gloomy source of income is the low album sales of aespa and Red Velvet. aespa's sales were at 1.26 million copies, while Red Velvet sold 600,000 copies, lower than the industry's expectations.
According to the media, Korea Investment & Securities' stock price adjustments to SM show investors' cautious sentiment, emphasizing the impact of album sales on the general financial situation of entertainment companies.
Notably, in early January, the Korean Customs Service said that from June 2023 to December 2023, sales of K-pop albums by aespa and Red Velvet decreased in China. In particular, in October, there was a time when album sales hit rock bottom.
This has dealt a heavy blow to SM's stock market - a company that is seen as dominating the market in China and Southeast Asia. In the period from October 5 to October 31, 2023, SM's stock in this market decreased by 19.42% to the price of 10,800 won (77.68 USD).
According to the media, SM should have a clear and strong strategy for artists working under the company at this time to soon restore stock prices.
As for YG, after more than 1 month of deep stock price decline due to Blackpink, G-Drgon not re-signing individual contracts, YG company had to boost the operations of BabyMonster, Treasure and reveal the launch of a new group at the end of the year.
