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Great success © News1What are the risk factors for your investment that Big Hit Entertainment, BTS’s agency, will be listing on the KOSPI market on the 15th of this month?
On the 5th and 6th, Big Hit, which is in the process of applying for public offering shares to the public, heard about the enlistment of BTS members such as Jin and the concentration of BTS sales as an investment risk factor in their shares in a share report filed with the Financial Supervision Service. All six members of BTS were born between 1992 and 1997 and all are eligible for active duty.
Big Hit said: “We believe that Kim Seok-jin (Jin), the oldest member with the earliest year of birth in 1992, will be able to postpone entry under the Military Service Act until the end of 2021. To prepare for the risk of suspension of activities of an artist,), sales of licenses, sales of video content and other indirect participation sales that do not involve direct activities of the artist “.
In addition, “To minimize the risk of reduced sales due to the gap of important artists such as enlisting in the military, we are reviewing various businesses such as pre-production of content such as albums and videos, and flexible management of artists through active members.” . If there is a disruption in activities due to artist recruitment, etc., it can have a negative impact on the profitability and growth of the company. ”According to Big Hit, the proportion of sales related to BTS was overwhelming at 97.4 % (571.8 billion won) last year and 87.7% (257.8 billion won) in the first half of this year. It is explained that if the contract with BTS expires or the related sales decrease , profitability may decrease. Big Hit said: “To reduce the risk of sales bias, we signed an early renewal with BTS in 2018 and extended the contract period until the end of 2024.” In addition, through external mergers and acquisitions and the debut of a new self-created artist, the artist portfolio As it expands, its dependence on sales will gradually decrease.
However, he added, “if sales related to top artists decline dramatically due to changes in music trends, declining artist popularity, and future suspension of activities, profitability may decline if new artists do not successfully establish themselves in the market. “
The damage caused by the new coronavirus infection (Corona 19) was also mentioned as a risk factor. Big Hit’s consolidated sales for the first half of this year were 294 billion won, down 8.16% from the second half of last year (3201 billion won), which was the previous half.
Big Hit said: “Sales decreased due to decrease in performance sales due to cancellation of performances at home and abroad by major artists due to Corona 19.” It could have a negative impact on plans and performance. “
In addition to Big Hit, ΔThe risk of deterioration of management performance due to declining reputation of the artist ΔThe risk of leaving the main creative talent ΔPossibility of incurring stock compensation costs due to donation of shares ΔRisk due to changes in user preferences ΔRisk due to intensifying competition in the content industry is an investment risk factor. Revealed.
Meanwhile, Big Hit will offer public offerings for general investors for two days from this day. Korea Investment & Securities and NH Investment & Securities, co-organizers, Mirae Asset Daewoo Securities and Kiwoom Securities, the acquisition company, receive public offers. The offering price is 135,000 won per share. Big Hit will appear on the KOSPI market on the 15th.
The amount allocated to general subscription is 14.26,000, or 20% of the new inventory of 7.13 million. In terms of allocation, NH Investment & Securities is the most important with 64,8182 shares. Korea Investment & Securities has 555,584 shares, Mirae Asset Daewoo 185,195 shares and Kiwoom Securities 3,703.
For the subscription of shares of general public offering, 50% of the subscription fee must be paid as margin. The higher the competition rate due to more investors, the lower the number of shares you can receive. It is difficult to predict the competition rate from the Big Hit public offering subscription, but if we substitute the competition rate (1117 to 1) for the institutional demand forecast level, the number of shares that can be received by placing 100 million won is only 1.3 shares. That means a week. The amount of underwriting margin is approximately 107 trillion won. Similar to Kakao Games, if a 60 trillion won margin is concentrated, the competition rate is 623.3 to 1, and the amount of shares that can be received by placing 100 million won is 2 weeks. In the case of 30 trillion won, the competition rate is 311.7 to 1, receiving 5 weeks. At 20 trillion won, the competition rate is 207.8 to 1, giving you 7 weeks.
(Seoul = News 1)
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