S. Korea Media | Asia Pacific 2Q26 Preview

研报英文原文证据摘录

S. Korea Media | Asia Pacific 2Q26 Preview

Idea

July 27, 2026 03:29 PM GMT

Morgan Stanley & Co. International plc, Seoul Branch+MS. Korea Media | Asia Pacific Jenna Lee

Equity Analyst

2Q26 Preview Jenna.Lee@morganstanley.com +82 2 399-4938

What’s Changed

SM Entertainment (041510.KQ) From To

Price Target W100,000 W80,000

S. Korea Media

JYP Entertainment (035900.KQ)

Asia Pacific

Price Target W66,000 W54,000 Industry View In-Line

YG Entertainment (122870.KQ)

Price Target W42,000 W38,000

We see 2Q26 as an uneventful quarter, given the low level of

activities from key artists. 2H could bring re-rating catalysts as

the activity calendar strengthens. We cut our price targets

across the board.

Key Takeaways

2Q26 was a quiet quarter with subdued artist activity. Merchandise business

could cushion earnings.

We expect in-line earnings for SM and misses for JYP and YG.

2H26 could turn more interesting with major album releases and new debuts.

Incorporating slower progress in globalization and early-stage IP's ramp-up across

names, we cut our price target 18% for JYP, 20% for SM, and 10% for YG.

Quiet quarter with merchandise business being the main driver: 2Q26 looks set

to be a relatively uneventful quarter for our media coverage, with subdued activity

across key artists for JYP and YG. Companies have increasingly highlighted their

merchandise business as a strategic tool to mitigate profit decline during periods of

low artist activity. Thus, merchandise sales trend could be a key focus area for 2Q26.

Catalysts coming in 2H26: Earnings concerns appear priced in, with our media

coverage down ~20% on average since end-1Q26 (vs. the KOSPI up 34%). Valuations

are sitting at historical low levels (NTM P/E for JYP and SM at 11x, YG at 13x). For