Following the Q3 Report of Cube Entertainment, Heungkok Securities (HK Securities) expressed their anticipation for Cube Entertainment owing to strong revenue growth coming from BEAST and Hyuna’s comeback as well as the increasing revenue from Japan. HK Securities expressed a ‘BUY’ with a target price of ₩4,000.
HK Securities, “Although BEAST and Hyuna’s comeback in Jul~Aug had contributed to a huge increase in revenue, due to the decision to set up a Japanese subsidiary and other staffing needs, operating profit sees a slight decline. In the first half year, a commission fees of ₩ 200mil, merger fees of ₩ 2.3bil, adjustment fees for convertible bonds of ₩3.5bil were incurred.
After taking into consideration of listing expenses, although this year’s net profit will see a loss, as Cube’s artists’ active activities until December, we can look forward to strong external growth as well as vast improvement on its operating profit.
Cube Entertainment houses boy group BEAST and female group 4minute, both of which are successful in the domestic entertainment industry, thus, Cube Ent is a well-established agency. In terms of revenue, 50% comes from Beast, 15% from 4minute and 9% from BTOB. Apart from this, BTOB’s revenue proportions are seeing a gradual increase.”
“BEAST will be holding 8 Japan concerts until December as well as other concert schedules in other countries, while BTOB will be holding 2 domestic concerts and 3 in South East Asia. With 4minute’s particular popularity in South America, they will be holding 6 concerts in South America which are currently taking place.”
“As Japan subsidiary sets up, Beast and other artists will expect an increase of sales under a minimum guarantee for their Japanese concerts. In 2016, a minimum guarantee of ₩2Bil is expected for Beast’s smallest-scale concert activities in China which will increase based on the number of concerts, thus, we look forward to the incremental revenue.”
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Source: E Daily