UPDATES AS OF MAY 31, 2012:
- Domestic Sales of Special Edition Still Alive: 130,000
- Release of Special Edition (Monster) in Japan in June
- Additional dome concerts in November and December: 250,000 attendees expected
- Southeast Asia tour in second half of 2012. Concerts will also be held in China, the US, South America and Europe.
- Big Bang closing show or YG Family Concert in December
- G-Dragon's album release and domestic concerts in August
- T.O.P's ongoing movie filming
Recommendation for YGE's stock: BUY
(BUY = the company's stock is expected to give a return of +15% or more.)
Reasons for "BUY" Rating for YGE:
1. Increased promotions in Japan to contribute to higher revenue from royalties.
2. Expectations for new groups growing.
3. YG plans to strengthen its other business segments backed by the brand power of its artists, such as Big Bang, 2NE1 and Psy.
Notes:
- Royalty revenue was less than expected as YG signed a contract with AVEX in second half of 2011. Earnings will be booked two to five months after the settlement period.
- Operating profit dropped 15.3% due to large production expenses and labor costs related to Big Bang’s fifth album, Alive, released in February. BUT earnings should improve in the 2nd quarter of 2012 when revenue from YG Family Concert in Japan, Big Bang, 2NE1 and Se7en's albums will be reflected.
Source: Korean Investment & Securities//truefriend.com
