HYBE CEO Lee Jaesang recently addressed financial concerns surrounding the company during an internal town hall meeting, emphasizing that HYBE has "1.2 trillion KRW (approx. 890 million USD) in available cash" and reassuring staff of the company’s sound financial standing. He also encouraged patience and trust regarding recent controversies involving NewJeans, stating, "If we trust and wait, the issues will resolve themselves one by one."
On October 16th, sources revealed that during a town hall event held on October 14th, Lee Jaesang told all employees, "HYBE has 1.2 trillion KRW (approx. 890 million USD) in available cash assets, and our financial condition is very healthy." He urged staff not to worry, as the company’s operations are progressing well in terms of numbers. The town hall, a regular gathering where the CEO shares the company’s vision with internal members, also focused on unity, with Lee emphasizing "We are Team HYBE", urging employees to support one another with kind words.
Regarding the controversies involving Ador, NewJeans, and former Ador CEO Min Heejin, he reassured, "We are handling the situation based on principles and rationality. Trust and patience will help untangle the issues gradually."
Industry analysts believe that Lee’s comments were aimed at addressing concerns over HYBE’s financial stability, especially following the risks surrounding the repayment of a 400 billion KRW (approx. 296 million USD) convertible bond (CB). They interpret this as an effort to alleviate concerns among staff about these financial issues.
The term 'available cash assets' mentioned by Lee refers to cash, cash equivalents, and other liquid financial assets. According to HYBE's semi-annual report for the first half of 2024, the company’s available cash assets amount to approximately 1.07 trillion KRW (approx. 795 million USD), including 321.4 billion KRW (approx. 239 million USD) in cash and cash equivalents and 753.1 billion KRW (approx. 558 million USD) in other liquid financial assets. The figure of 1.2 trillion KRW (approx. 890 million USD) likely accounts for improvements in the third quarter's performance.
Additionally, on October 15th, HYBE successfully issued a 400 billion KRW (approx. 296 million USD) convertible bond to refinance the existing bond, securing repayment funds three weeks ahead of schedule. This new issuance included a 20% premium rate, 5 percentage points higher than the previous rate, yet was completed smoothly.
An industry insider commented, "Corporate CB repayments typically involve refinancing, and HYBE’s successful bond issuance indicates market confidence in the company's growth potential and stock price outlook." A securities industry source echoed these sentiments, predicting a rebound in HYBE's stock price soon, adding, "While there is noise, HYBE's financial situation is positive. High debt levels are often a natural part of financing and investment for corporate growth."
Market optimism around HYBE is primarily due to expectations of improved performance in the near future. Industry predictions suggest that HYBE’s third-quarter earnings will surpass those of the second quarter. According to FnGuide, the projected operating profit for HYBE in the second half of the year is estimated at 151.2 billion KRW (approx. 112 million USD). Although a year-over-year decline is expected, quarterly performance has shown steady recovery since the first quarter.
Seventeen continues to contribute significantly to HYBE's success. According to Hanteo Chart, Seventeen’s 12th mini-album ‘SPILL THE FEELS’, released on October 14th, sold 2.49 million copies on its first day. This figure is an increase of 230,000 copies compared to the 2.26 million first-day sales of their April release ‘17 IS RIGHT HERE’.
Another standout performer under HYBE’s subsidiary KOZ Entertainment is the group BOYNEXTDOOR, which recorded first-week sales of 750,000 copies for their third EP ‘19.99’, including 600,000 copies sold on the first day. This marks an increase from their second EP ‘HOW?’ released in April, which sold 530,000 copies in its first week and 390,000 on its release day.
HYBE is also optimistic about the future growth of its rookie group KATSEYE, which has made significant achievements on international and domestic music charts such as Billboard, Spotify, and Melon since debuting in June. During the town hall on October 14th, HYBE reportedly held a session sharing KATSEYE’s success story and collaboration strategies, underscoring the group's potential.
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