JYP shares fall from 140,000 won to the 30,000 won range in three years, top target price cuts

JYP Entertainment's share price has fallen sharply over the past three years, dropping from the 140,000 won range at its 2023 peak to the 30,000 won range today. As a result, the stake held by founder and majority shareholder Park Jin-young has lost more than 100 billion won in value.

The decline reflects market concern over JYP's corporate value, and appears to be the result of intensifying competition in the entertainment industry combined with internal problems.

According to financial information provider FnGuide, securities firms lowered JYP Entertainment's target price more than any other company between the 1st of last month and February 23. A total of 28 target price cut reports were issued, placing JYP first by a wide margin among listed companies.

This clearly shows the negative view across the securities market toward JYP's weak earnings and future growth prospects.

JYP Entertainment reported an earnings shock in its second-quarter results, falling well short of market expectations. Second-quarter revenue was 138.1 billion won, down 15% year on year, and operating profit was 31 billion won, plunging 41%.

This is about 20% below market expectations, which is attributed to a combination of weak activity from major artists and underperformance from new artists. Investors are increasingly calling for urgent improvement in JYP's earnings.

A series of departures by Twice members from JYP is adding to market unease. Member Jeongyeon has moved to the agency of her elder sister, actress Gong Seung-yeon, and more recently Chaeyoung's counterpart Tzuyu has also left JYP to go solo and released a solo album.

These departures have heightened concerns about the full-group activity cycle of Twice and raised questions about JYP's ability to maintain its core intellectual property.

This is expected to hit JYP's earnings considerably.

Suspension of activities due to the core group's military service could lead to lower revenue, putting pressure on JYP to discover and develop new artists to fill the gap.

The controversy has also dealt a blow to the education philosophy of producer Park Jin-young, who emphasizes artists' character, and has led to criticism of the agency's artist management system. It could also have a negative impact on JYP's corporate image.