Key points
- HYBE reported second quarter revenue of 1.45 trillion won ($1.02B USD) on July 28, 2026, up 105.5 percent from a year earlier, and operating profit of 170.9 billion won ($120M USD), up 159.3 percent. It is the first time HYBE has passed 1 trillion won ($702M USD) of quarterly revenue, and the first time quarterly operating profit passed 100 billion won ($70M USD).
- Revenue beat the analyst consensus by 18.7 percent and operating profit by 10.2 percent. The stock closed down 16.09 percent at 188,800 won ($133 USD) the same day, its largest one day fall since June 2022.
- Gross margin fell to 32 percent from 43 percent the quarter before. Concerts were 44.7 percent of revenue against 26.7 percent, and touring costs far more to run than albums or merchandise.
- Four brokerages cut their target price on July 29 and all four kept a buy rating. iM Securities and Korea Investment & Securities went to 330,000 won from 400,000, Kyobo Securities to 320,000 from 350,000, NH Investment & Securities to 310,000 from 330,000. That range is $218 to $232 USD a share. HYBE closed July 31 at 168,800 won ($119 USD).
On July 28, HYBE (하이브) reported the first quarter in its history with revenue above 1 trillion won ($702M USD). The figure was 1.45 trillion won ($1.02B USD), and it more than doubled from the same three months last year. Operating profit rose 159.3 percent to 170.9 billion won ($120M USD).
Both numbers came in above what the market had asked for, revenue by 18.7 percent and operating profit by 10.2 percent.
The stock closed down 16.09 percent at 188,800 won ($133 USD). It was the worst single day HYBE has had since June 2022.
What BTS brought back
BTS released their fifth album, ARIRANG, in March and went back on the road in April. The tour is the whole story of the quarter. Concert revenue was 647.7 billion won ($455M USD), which is 44.7 percent of everything HYBE sold in three months. A quarter earlier, concerts were 26.7 percent of the business.
Recorded music brought in 326.8 billion won ($230M USD), and merchandise and licensing 310.6 billion won ($218M USD), a record for that line as well. Half of the ten best selling CD albums in the United States in the first half of the year came from HYBE artists.
Why a record quarter got sold
The problem is what kind of revenue it was.
A stadium show is expensive to put on. Staging, crew, freight, the venue itself. An album or a hoodie is not. So when touring became almost half the business, the profit left on each won of sales fell with it. Gross margin came in at 32 percent against 43 percent in the previous quarter.
Analysts mostly did not agree with the selling.
Lee Ki-hoon, an analyst at Hana Securities (하나증권), kept a buy rating and a 350,000 won ($246 USD) target, and titled the note 실적 서프라이즈에도 이해할 수 없는 셀온, an inexplicable sell on despite an earnings surprise. That is the phrase Korean traders use when good news arrives and everyone sells into it.
"With the second quarter earnings surprise, strong results tied to the BTS world tour are expected to continue until at least the second quarter of next year, and over the coming year there will be comebacks from NewJeans and Seventeen as an eight member group, along with continued high growth from Cortis and Katseye," Lee wrote.
"Even so, the share price is at a 2027 forward price to earnings of 20 times, which is lower than the level at the time of the panic selling after BTS's sudden military enlistment announcement, when it was 22 times," Lee continued. Price to earnings is what investors are paying for each won of expected profit, so a lower number means they are paying less for the same earnings.
Kiwoom Securities (키움증권) kept a buy and a 330,000 won ($232 USD) target, and called the fall excessive relative to the fundamentals.
The targets came down anyway
Four houses cut their number on July 29, and every one of them stayed at buy. The cuts were small, and the reasons were nearly identical. A larger concert share means more margin pressure in the short term.
Lee Hwa-jung at NH Investment & Securities (NH투자증권) did something more interesting. NH did not really argue with the earnings. It widened the discount it applies to HYBE against comparable companies abroad, from 10 percent to 20 percent, to reflect how bad sentiment in this market has become.
So the largest part of that particular cut had nothing to do with HYBE at all.
It was not only a HYBE problem
July 28 was a bad day for the whole sector and a worse one for the exchange. SM Entertainment fell 5.78 percent, YG Entertainment 5.54 and JYP Entertainment 4.26. The Kospi was in the middle of the worst month it has ever recorded.
The four agencies had already separated before that. Through the first three weeks of July, HYBE was up 5.67 percent, while JYP was down 13.23 percent, the worst of the four, with the market watching the contract renewal of Twice.
Money in Korea this year has gone to one place, and that is semiconductors. Entertainment has been trading near 13 times earnings for the big three agencies, which is why Korean brokerages kept using the phrase extreme undervaluation all through the summer while the stocks kept falling.
Where it stands
HYBE closed Friday at 168,800 won ($119 USD), up 3.56 percent. The Kospi rose 17.91 percent that day, the largest single day rise in its history, and SK Hynix closed limit up. The company that had just posted the best quarter this industry has ever seen managed three and a half percent.
Against a 52 week high of 405,500 won ($285 USD), HYBE is down 58 percent. Every target price on the street is 310,000 won ($218 USD) or higher.
Meanwhile, BTS are still on tour, and Hana expects that tour to keep carrying the results through the second quarter of next year.
Sources
- 헤럴드경제, 하이브 2분기 매출 1조 영업이익 1천억 돌파, on the quarterly figures and the segment breakdown
- 뉴스핌, 하이브 실적 서프라이즈에도 이해할 수 없는 셀온, on Hana Securities' target and the quoted note
Won figures are converted at 1,424 won to the dollar, the July 31, 2026 close. This article is for information only and is not investment advice.
