On December 13, Hana Securities released a report, highlighting SM Entertainment's clear upward potential and maintained a 'buy' investment rating. However, adjustments in performance and valuation led to a reduction in the target stock price, dropping from the previous target price of 165,000 KRW (127.43 USD) to 135,000 KRW (104.26 USD).

Hana Securities analyst Lee Ki Hoon analyzed the current stock price of SM Entertainment and provided insights for the future. He explained, "The reason we recommended SM as the top pick last year was that the expected price-to-earnings ratio (P/E) remained around 17x, making it attractively priced for an extended period." He added, "Right now, the stock is available at an affordable price.."

SM Entertainment has recently recorded its lowest stock price levels within the last six months, closing at 84,100 KRW (64.94 USD) a share on December 12. The analyst noted, "While there may still be lingering issues related to Kakao Entertainment, the current price may not be the bottom. However, it is evident that if these issues are resolved, the price will become unexpectedly attractive." He then revealed a new recommendation for SM's estimated P/E ratio for 2024, indicating a secondary preference.

The analyst has also projected both the Q4 and annual financial results. The forecast suggests that the fourth-quarter performance will fall short of market expectations. The anticipated Q4 revenue is estimated at 250.5 billion KRW (193.4 million USD), with an operating profit of 26.6 billion won (20.54 million USD), which is below the expected 38.5 billion KRW (29.7 million USD).

Furthermore, the annual operating profit forecast has been revised downwards to 166.6 billion KRW (128.57 million USD). This adjustment reflects a conservative outlook on the financial performance, related to the reduced bulk orders of albums in China. The analyst explained that SM Entertainment, with a high proportion of sales in China compared to other companies, is particularly affected by the noticeable decline in album purchases in China. However, he stated, "Even if there is an actual decrease, from a stock perspective, it is expected to mark the conclusion of the issue." Analyzing the data, he noted that further decreases would not significantly impact performance even with the China proportion already reduced to 10%.

The analyst concluded by mentioning upcoming events, stating, "In the first quarter of next year, comebacks from NCT Dream, RIIZE, and aespa, as well as the official debut of NCT NEW TEAM, are expected. Additionally, the first half of the year is anticipated to see the official debut of a new girl group."

Korean netizens commented, "They're already releasing a new girl group?" "NCT Tokyo fighting," "Girl group! I'm excited," "I'm looking forward to the new girl group," "aespa single?" "The new team is making an official debut I see," and "I'm curious about the new upcoming girl group."