The high dependence on Blackpink is holding back YG Entertainment’s ankles.

On the 10th, YG Entertainment announced that its sales and operating profit for the third quarter of this year were 114.6 billion won and 15.53 billion won, respectively. This is a 33% increase and a 10% decrease compared to last year’s period.
Sales missed the consensus by 5%, and operating profit missed the consensus by 22%. Part of Blackpink’s album sales, released in September, is believed to have been delayed to the fourth quarter.
After the announcement, securities firms lowered the target price of YG Entertainment all at once. The high dependence on Blackpink is holding back YG Entertainment’s ankles. For example, BLACKPINK accounted for 92% of YG’s 3rd quarter album sales.
Another worrying factor is that YG’s cash cows, Blackpink and Big Bang, are about to renew their contracts in 2023.
However, the growth of the follow-up group to support them is too slow. Treasure is even showing a negative growth trend. The Initial Chodong sales of the Treasure album released in October were only 400,000 copies, down from the previous 540,000 copies.
In the midst of this, members Bang Yedam and Masiho recently ended their exclusive contracts with YG Entertainment and withdrew from TREASURE. In particular, in the case of Bang Ye-dam, who became the runner-up in SBS’ K-Pop Star’ season 2, he made his debut as Treasure after being stored at YG Entertainment for a long time. Treasure became a hot topic as the so-called ‘Bang Ye-dam group.’ However, after two years of resignation, TREASURE was again in turmoil before it even took its place.
Park Ha-Kyung, a researcher at Korea Investment & Securities, pointed out the high dependence on Blackpink and the negative growth of Treasure and analyzed that “worries about the growth of new artists are rising, and at the same time, high dependence on the existing lineup is lowering investor sentiment.”
“The music sales are being driven by BLACKPINK and BIGBANG, and both groups are about to renew their contracts next year, raising concerns about a performance void in the absence of IP (intellectual property). It will be a variable in momentum.”
Park Soo-young, a Hanwha Investment & Securities researcher, also said, “The current Black Pink indicators are excellent and Treasure’s fandom expansion in Japan is positive, but visibility is still falling. It seems necessary to be confident that the launch of new intellectual property (IP) at home and abroad will be successful along with regional expansion to the outside world,” he said.
Lee Ki-hoon, a researcher at Hana Securities, also said, “In a situation where Big Bang and Black Pink are going to renew their contracts next year, investors are avoiding the related uncertainties, and even if they are all renewed, they will not be able to contribute to BLACKPINK’s mega IP until they contribute to the sales of Big Bang’s tour activities that have been absent for several years. “The dependence on performance is too high,” he said.
He added, “Whether it’s Big Bang’s tour activities or the debut of a rookie girl group that is showing rapid growth with few exceptions, it needs to be done quickly.”
However, some analysts said that the fourth quarter results were expected. Lee Sun-hwa, a researcher at KB Securities, said, “Blackpink is conducting a total of 45 world tours, which is an increase from the 34 tours conducted before Corona 19. expected