Experts Analyze Short-Term Fluctuations and Long-Term Effects on Hybe's Performance Amid Corporate Conflict

Courtesy of Min Hee Jin's instagram

Shares of Hybe experienced a decline, starting at 206,000 won ($149) per share on Friday, marking an 11.7 percent drop compared to the opening of the main bourse, Kospi, on Monday. This decline occurred as tensions between Hybe Entertainment and its sublabel Ador became public.

Analysts attribute the decrease in stock prices to concerns regarding potential disruptions to the upcoming engagements of NewJeans, a prominent K-pop group affiliated with both Ador and Hybe. They also highlight apprehensions about the potential departure of Min Hee-jin from Hybe, a key producer.

Analysts anticipate short-term fluctuations in Hybe's stock prices, particularly considering Min's significant influence among fans and the public. The absence of Min could lead to increased volatility in stock prices as investors assess the future prospects of NewJeans without her involvement. 

▲ Courtesy of Min Hee Jin's instagram

However, analysts assert that the long-term effects of the Hybe-Ador feud on Hybe's stock prices will likely be limited. They emphasize that NewJeans is expected to continue their activities as planned under Hybe's ownership of their exclusive contract.

Hybe currently holds an 80 percent stake in Ador, while Min owns an 18 percent stake. Analysts suggest that Ador's limited contribution to Hybe's overall performance mitigates the potential impact of the feud. In 2023, Ador accounted for 11 percent of Hybe's operating profit, primarily driven by NewJeans' album and digital music sales. Projections for 2024 indicate a slight increase to 14 percent.

Analysts further note that even if NewJeans' activities were suspended, any impact on Hybe's 2024 performance would likely be minimal, with estimates indicating less than a 10 percent reduction in operating profit.

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