K-pop entertainment stocks show strong upward momentum.

K-pop entertainment stocks have entered a bullish phase, defying the volatility seen in other industries amid domestic economic slowdown, global instability, and the anticipated inauguration of the Trump administration’s second term.

On January 14th KST, according to the Korea Exchange, JYP Entertainment’s stock price closed at 75,800 KRW, up 7.06% (5,000 KRW) from the previous trading day. SM Entertainment followed closely, rising 6.94% (5,000 KRW) to close at 77,000 KRW. YG Entertainment and HYBE also saw gains of 3.38% and 2.57%, respectively.

The recent surge is partly attributed to a base effect following significant declines in 2024. Over the past year, the “big four” entertainment companies experienced sharp drops, with JYP seeing a 58.7% decline from its 52-week high. The industry’s overall performance was impacted by weaker album sales, down 15% year-on-year to 100 million units in 2024, along with internal challenges at HYBE, including artist controversies.

The tide has turned in 2025, driven by expectations of better-than-anticipated Q4 earnings and improved investor sentiment. Analysts forecast that the major entertainment companies’ financial results will exceed market expectations, boosting confidence in the sector.

Positive external factors

1. Reentry into the Chinese market:

The resumption of cultural exchanges between South Korea and China has renewed optimism. Recent agreements between cultural ministers have raised expectations for K-pop performances in China, which had been largely restricted since 2016.

2. Insulation from U.S. tariffs:

K-pop’s export dynamics are unaffected by the protectionist trade policies anticipated under the Trump administration’s second term. Unlike other export industries, music, streaming, and concert tickets are not subject to traditional tariff frameworks.

The industry’s growth is bolstered by the return of major artists like BLACKPINK (YG) and BTS (HYBE), whose comebacks are expected to drive revenue and expand the K-pop ecosystem. Additionally, groups launched over the past two years are beginning to yield profits. The “big four” companies have collectively introduced approximately 10 rookie groups since 2023, with these groups now conducting large-scale tours and generating revenue earlier than anticipated.

Industry experts believe this is just the beginning of a broader recovery for entertainment stocks. Analysts are particularly optimistic about the growth potential of specific stocks within the sector.

• Kim, a senior analyst, noted, “BTS and BLACKPINK’s activities will serve as major catalysts for the industry. Additionally, new groups are transitioning from an investment phase to revenue generation, which will drive significant growth this year.”

• Lee Hyun Ji from Eugene Investment & Securities added, “The focus is no longer on whether to invest in entertainment stocks but on identifying which stock offers the steepest growth trajectory.”

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