With Big Hit (Hive) taking over North American labels that belong to Justin Bieber and Ariana Grande, there is a lot of interest in the future share price trend. The stock market is raising the target price all at once, saying that Hive will be reborn as a true global entertainment company.
According to the financial investment industry on the 5th, Hive acquired a North American label company through its subsidiary Big Hit America on the 2nd. Hive made a capital increase of KRW 1.728 trillion to a US subsidiary, and the US subsidiary added approximately 100 billion KRW of new borrowings to it, and acquired 100% of Ithaca Holdings for KRW 1,185.8 billion.
Ithaca Holdings, a comprehensive media holding company, is a comprehensive entertainment company that operates music-related management, record labels, publishing, and film and media businesses. It has SB Projects, which includes Justin Bieber and Ariana Grande, and record label BMLG, as its major subsidiaries, and recorded sales of 155.4 billion won, operating profit of 19 billion won, and net profit of 204.6 billion won last year.
With this acquisition, Hive and Ithaca Holdings have partnered with BTS, Tomorrow by Together, Seventeen, NU’EST, GFRIEND, Zico, ENHYPEN, Justin Bieber, Ariana Grande, J. Balbin, Demi Lovato. , Thomas Lett, Florida Georgia Line, and Lady A.
As representative pop singers from the United States such as Justin Bieber and Ariana Grande joined, Hive improved her appearance and lowered her dependence on BTS. The proportion of BTS sales, which reached 97% in 2019, fell to 85% through the acquisition of Pledis last year. As the effect of this year’s acquisition of Pledis is reflected as warmth and the contribution of new idols (TXT, Nhyphen) increases, the contribution to BTS album sales is expected to decrease to 60%.
Stock prices are also positively interpreting the acquisition and are raising the target price all at once. Based on the global artist intellectual property (IP), it is expected to actively enter the overseas MD market, and the related sales of Weverse Shop will increase rapidly.
On that day, Hana Financial Investment raised its target price from 320,000 won to 360,000 won, and Yuanta Securities raised its target price from 260,000 won to 350,000 won. In addition, eBest Investment & Securities set the highest at 502,000 won, and Korea Investment & Securities (310,000 → 340,000 won) and KB Securities (270,000 → 305,000 won) raised the eye level. This is a level that greatly exceeds the closing price of 243,000 won on the 2nd.
Jin-ah Ahn, a researcher at Ebest Investment & Securities, said, “As the acquisition of Ithaka Holdings becomes a global reference, it is expected that the bargaining power of larger overseas labels will also be strengthened, and there is no law that the acquisition of large labels is not possible.” While the Corona 19 persists, securing as much as possible a lineup of artists with impact on world tours after Corona is the key, and during the duration of Corona, Hive at the time of tour with the expansion of indirect sales including fan platforms and a lineup of various domestic and international top-tier artists secured after Corona “The market share of the global music market may be able to rise more steeply than expected,” he explained. It is an opinion that the possibility of realizing such a dream that Korea may take the lead in the global music market can not be ruled out.
Looking back on the last six months after listing, Hive has ▲ acquired VLive ▲ invested in YG PLUS’s 2nd largest shareholder ▲ Universal Music and 2 joint ventures ▲ acquired Ithaca. This is evaluated to be thanks to Weverse, an online fan community platform owned only by Hive in the global market.
Park Seong-ho, a researcher at Yuanta Securities, said, “Hive was cited as a risk factor for the sales structure concentrated on BTS at the time of IPO last year, but this year, it is attracting attention as it has made remarkable achievements in both platform expansion and label acquisition.” Hive’s 1Q results are expected to decrease compared to the previous quarter due to the temporary decrease in the amount of artist activity, but as the future growth potential is on the rise, we believe it is necessary to actively respond to overweight.”
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