Analyst Explains Significance of Stray Kids to Raise JYP Entertainment's Profitability

Amid JYP’s poor performance in 2024, analysts pointed out Stray Kids as the group that should promote in the 3rd and 4th quarter to raise the label’s profitability.

In November last year, COO J.Y. Park claimed in front of investors to buy JYP’s stocks while the prices were on a decline, hinting at their rise in 2024 and the succeeding years. He emphasized:

“I’m telling you to buy not by looking one year into the future, but by looking three years into the future, or five years into the future.”

(Photo : Facebook: Stray Kids)

However, after 7 months, JYP’s stock price has fallen 36.54% since that remark and is still on a downtrend.

Assuming that investors who heard COO Park bought stocks on the next trading day, they would have suffered this much loss. During this period, the market capitalization shrank from 3.2072 trillion won ($2.67 billion) to 2.360 trillion won ($1.7 billion) and fell to the 21st place from 9th place on KOSDAQ rankings.

The reason that JYP has been losing a lot of money was due to the poor performance of its artists in terms of album sales. The decrease in JYP’s profit was also linked to the cost of debuting its new girl group VCHA in January. On top of this, the performances of NMIXX, TWICE, ITZY, NEXZ, and VCHA are all sluggish.

(Photo : Stray Kids (News1))

The media Korean Economy then emphasized that Stray Kids is a fundamental artist to raise JYP’s performance — revealing how their delayed comeback tremendously affected the label:

“According to financial information firm F&Guide, securities firms are predicting that JYP Entertainment’s operating profit in the second quarter will be only 25.8 billion won ($18.57 million). This is a 43.57 % decrease compared to the same period last year.

This is because the comeback of the main artist Stray Kids has been pushed back from the second quarter to the third quarter. Stray Kids will resume activities on July 19.”

Stray Kids (Photo : Stray Kids on X)

Researcher Lim Soo Jin of Daishin Securities also added:

“We initially thought that Stray Kids would be active in the second and fourth quarters to defend JYP Entertainment’s performance, but their comeback schedule has been pushed back. 

Even if they release albums in both the third and fourth quarters, JYP’s performance expectations are expected to gradually decline when considering the purchasing power of their fandom.”

Despite the decline in the market, JYP still has the chance to improve its profitability in the second half of the year – and once again, Stray Kids will have a huge role to play in it.

(Photo : Facebook: Stray Kids)

Researcher Lee Seung Jun of NH Investment & Securities predicted:

“Stray Kids’ activities will be in full swing in the second half of the year. Stray Kids is planning a large-scale world tour in the second half of the year, so JYP Entertainment’s profitability will increase.”

However, JYP should be concerned about if Stray Kids will renew their contract with them, now that they are nearing their 7th year.

Analyst Lim, however, attested to STAYs (fandom) that Stray Kids will be an advantage in negotiating with JYP, especially in terms of profit distribution, thanks to their production capabilities.