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JYP Entertainment Corporation (A035900) Report Analysis

Corporate Events

Positive

NAVER Z Corp. announced that it has received KR...

2021-12-07 00:00:00

On December 7, 2021, NAVER Z Corp. closed the transaction. SoftBank Vision Fund 2, a fund managed by SoftBank Investment Advisers (UK) Limited...

Positive

NAVER Z Corp. announced that it has received KRW 223.581520144 billion in funding from a group of investors

2021-12-07 00:00:00

On December 7, 2021, NAVER Z Corp. closed the transaction. SoftBank Vision Fund 2, a fund managed by SoftBank Investment Advisers (UK) Limited and YG Investment Inc. no longer investing in the transaction.

Fundamental Summary

JYP's financial reports for Q1 showed some exciting results. Company's strong results conveyed remarkable strength in terms of value, growth, and income factors. Typically, results like these translate into sustained positive momentum and strong upward pressure on stock price. Therefore, we assessed them with a rating of 92 and a STRONG BUY recommendation.

Business Description

JYP operates as an entertainment company in South Korea and internationally. The company plans, creates, and sells music and video contents; and undertakes talent development programs. It also finds and manages artists. The company was founded in 1997 and is based in Seoul, South Korea.

Sector Overview

JYP is included in the Entertainment according to GICS (global industry classification standard). The Entertainment industry, which is part of the Communication Services sector, includes Movies & Entertainment and Interactive Home Entertainment. JYP's industry and sector affiliation are expected to positively boost their relative likelihood to overperform the market looking forward, as they should benefit significantly from the macroeconomic environment we see now.

Fundamental Highlights


Parameter Value Change Score
Assets 336.8B 6.1% 67
Liabilities 79.0B 18.4% 54
Price to Book 8.0 17.8% 83
Cash & Equivalents 59.7B 21.5% 88
Equity 253.5B 2.8% 67
EBITDA 68.0B 8.6% 84
Total Revenues 229.4B 18.3% 40
Parameter Value Change Score
Return on Equity 32.0 3.5% 78
Net Cashflow 7.9B -45.6% 80
Capital Expenditure -289.0M 34.1% 96
Asset Turnover 0.8 12.6% 87
Free Cashflow Per Share 1.5K 13.5% 81
* All values are TTM

The below chart reflects JYP's birds-eye view on its performance with respect to its peers, the company's fillings as reported or to a similar industry, market cap, and country of origin. While JYP's peer average final assessment score stands on 74, JYP's score is 92.

  •  A035900
  •  Peers average
Name Market Cap Balance Sheet Income Statement Cash Flow Rating Final Assessment mc_sort Hidden
Kakao Games Corp. 3.5T 57 80 64
Hold
65
65 0 1
Pearl Abyss Corp. 2.7T 63 77 67
Hold
73
73 1 1
Studio Dragon Corporation 2.2T 74 81 74
Buy
80
80 2 1
SM Entertainment Co., Ltd. 1.9T 80 79 89
Strong Buy
93
93 3 1
CJ ENM CO., Ltd. 1.7T 79 66 70
Hold
78
78 4 1
Wemade Co.,Ltd. 1.2T 64 41 46
Underperform
41
41 5 1
Nexon GT Co., Ltd. 871.6B 68 83 87
Buy
84
84 6 1
NEOWIZ 844.7B 85 79 86
Strong Buy
95
95 7 1
Wysiwyg Studios Co., Ltd. 828.0B 47 84 90
Hold
78
78 8 1
YG Entertainment Inc. 812.4B 80 80 53
Hold
74
74 9 1
Com2uS Corporation 739.1B 75 43 64
Hold
61
61 10 1
Neptune Company 560.7B 57 54 64
Underperform
51
51 11 1
GIANTSTEP Inc. 521.3B 54 40 60
Underperform
46
46 12 1
Devsisters corporation 488.2B 68 54 48
Underperform
51
51 13 1
Webzen Inc. 487.7B 66 80 63
Hold
70
70 14 1
Wemade Max Co., Ltd. 397.8B 88 85 82
Strong Buy
95
95 15 1
SM Culture & Contents Co., Ltd. 324.5B 75 80 71
Buy
79
79 16 1
JOYCITY Corporation 298.0B 64 56 65
Hold
62
62 17 1
Chorokbaem Media Co., Ltd. 260.1B 53 78 99
Hold
76
76 18 1
KRAFTON, Inc. 10.6T 76 68 77
Buy
80
80 19 1
Ncsoft Corporation 9.6T 86 80 73
Strong Buy
91
91 20 1
HYBE Co., Ltd. 5.9T 85 64 80
Buy
84
84 21 1
Netmarble Corporation 4.0T 55 44 97
Hold
64
64 22 1
CJ CGV Co., Ltd. 837.4B 87 82 80
Strong Buy
95
95 23 1
NHN Corporation 813.2B 65 50 52
Underperform
54
54 24 1
ContentreeJoongAng corp. 519.6B 82 91 78
Strong Buy
96
96 25 1

Macro Environment

Neutral
72

Typically, the stock market in South Korea will react to recent economic events, as well as be influenced by the sentiment in other major economies around the world, such as the United States, European Union, and China. Our assessment is that these two events may influence global market sentiment. On the negative side we have the tensions between taiwan and china, and on the positive side we have the end of COVID-19 pandemic.

Positive end of COVID-19 pandemic

The World Health Organization issued six policy briefs outlining essential steps governments could take to stop the pandemic. The briefings, which are based on evidence and experience from the previous 32 months, provide guidance on how to save lives, protect health systems, and minimize social and economic disruption.

Negative tensions between taiwan and china

The tensions between Taiwan and China have spiked following Nancy Pelosi's visit to Taipei. China staged war games near Taiwan to express its anger at what it saw as stepped-up U.S. support for the island Beijing views as sovereign Chinese territory. Because Taiwan produces the majority of the world's semiconductors, which are used in every electronic device today, a war between China and Taiwan might be catastrophic for the global economy.

Besides the events we mentioned, there are also specific events related to the Media & Entertainment industry of which JYP Entertainment Corporation is a part. As a result, we believe that the US entering a recession may cloud the sector's shares in the near time future.

Negative US entering a recession

In light of the high inflation and significant monetary policy the Fed is taking in the US, there are increasing signs of growing chances of the US entering a recession. A recession in the US could lead to a sharp chain reaction in the rest of the world's leading economies as well. Historically, the Media & Entertainment industry has been hit hard in recession times due to a sharp drop in demand and hurting corporate revenues and profits.

In considering the current macro environment and the risks that might affect JYP Entertainment Corporation stock, we came to the conclusion that recent events aren't likely to affect the company's performance in the short term, and thus rated JYP Entertainment Corporation macro environment with the score of 72.

Technical Analysis

When trying to optimize the timing of an investment, it's critical to analyze whether the stock looks overbought or oversold, and in which direction the momentum is moving. JYP's stock is now priced above its 50-day and 200-day, but below its 5-day moving average, while its MACD (moving average convergence divergence) indicates that the stock's price movement momentum is strengthening. Historically, this is a positive setup in the medium and long-term. In particular, many institutional investors keep close watch of the 200-day moving average. Meanwhile, looking at the Stochastic Oscillator and RSI (relative strength index), JYP's stock appears overbought. Overall, these technical indicators don't clearly signal directional momentum. Therefore, this stock received a cumulative TA (technical analysis) score of 62.

Neutral 62
Close Price 60600.0
52W Low 38350.0
52W High 64700.0
5D MA 61080.0
50D MA 57206.0
200D MA 56200.0
MACD 1356.08
RSI 99.79
STOCH 77.55

Balance Sheet Analysis

Overall, JYP's critical balance sheet metrics appear to signal strong support and a high likelihood of positive growth going forward. JYP reported a positive trendline in their cash and cash equivalents metrics. Specifically, they reported that cash and cash equivalents were 59.7B, representing 21.5% change from the last report. This impressive growth, specifically in contrast to their industry peers' performance, should support an upswing in the company's stock price. The company's cash and cash equivalents movement, therefore, received a grade of 88. Also, JYP publishes solid book value factor metrics in this report. Price to book ratio (P/B) now sits at 8.0 and represents a 17.8% change from the previous report. These book value factor numbers show that management has been prudent in focusing on efficient growth. We believe the stock price has room to grow to reflect its intrinsic value accurately. Consequently, their book value factors movement received a grade of 83. That said, one metric, Liabilities, stood out as particularly concerning. JYP's liabilities stood at 79.0B in the current filing, which represents a 18.4% change from the previous report. This performance is relatively weak in comparison to their peers and suggests that its's stock price will likely suffer until this is solved. Therefore, we rated their liabilities movement with a score of 54. Therefore, its balance sheet earned a grade of 83.

Parameter Value Change Score
Assets 336.8B 6.1% 67
Liabilities 79.0B 18.4% 54
Price to Book 8.0 17.8% 83
Cash & Equivalents 59.7B 21.5% 88
Equity 253.5B 2.8% 67
* All values are TTM

The below chart describes JYP's performance as reflected on its balance sheet with respect to its peers. While JYP received a balance sheet score of 83, the average of its peers stands on 70.

  •  A035900
  •  Peers average
Name Market Cap Liabilities Movement Asset Change Equity/Intangibles Adjustments Cash & Equivalents Book Value Momentum Balance Sheet mc_sort Hidden
Kakao Games Corp. 3.5T 99.0 56.0 84.0 48.0 43.0 57 0 1
Pearl Abyss Corp. 2.7T 78.0 53.0 61.0 53.0 73.0 63 1 1
Studio Dragon Corporation 2.2T 65.0 73.0 69.0 87.0 51.0 74 2 1
SM Entertainment Co., Ltd. 1.9T 66.0 65.0 63.0 71.0 88.0 80 3 1
CJ ENM CO., Ltd. 1.7T 66.0 61.0 83.0 92.0 74.0 79 4 1
Wemade Co.,Ltd. 1.2T 66.0 67.0 80.0 80.0 40.0 64 5 1
Nexon GT Co., Ltd. 871.6B 62.0 67.0 60.0 39.0 86.0 68 6 1
NEOWIZ 844.7B 65.0 66.0 83.0 82.0 84.0 85 7 1
Wysiwyg Studios Co., Ltd. 828.0B 61.0 48.0 67.0 40.0 67.0 47 8 1
YG Entertainment Inc. 812.4B 62.0 73.0 46.0 95.0 65.0 80 9 1
Com2uS Corporation 739.1B 63.0 70.0 60.0 81.0 68.0 75 10 1
Neptune Company 560.7B 76.0 75.0 38.0 43.0 41.0 57 11 1
GIANTSTEP Inc. 521.3B 71.0 55.0 79.0 37.0 66.0 54 12 1
Devsisters corporation 488.2B 79.0 73.0 70.0 51.0 54.0 68 13 1
Webzen Inc. 487.7B 73.0 62.0 94.0 42.0 71.0 66 14 1
Wemade Max Co., Ltd. 397.8B 75.0 71.0 85.0 89.0 76.0 88 15 1
SM Culture & Contents Co., Ltd. 324.5B 72.0 78.0 53.0 53.0 71.0 75 16 1
JOYCITY Corporation 298.0B 73.0 69.0 52.0 38.0 70.0 64 17 1
Chorokbaem Media Co., Ltd. 260.1B 57.0 58.0 47.0 45.0 60.0 53 18 1
KRAFTON, Inc. 10.6T 64.0 61.0 75.0 78.0 80.0 76 19 1
Ncsoft Corporation 9.6T 60.0 67.0 63.0 90.0 87.0 86 20 1
HYBE Co., Ltd. 5.9T 74.0 61.0 75.0 94.0 79.0 85 21 1
Netmarble Corporation 4.0T 59.0 45.0 61.0 73.0 67.0 55 22 1
CJ CGV Co., Ltd. 837.4B 77.0 70.0 53.0 95.0 74.0 87 23 1
NHN Corporation 813.2B 71.0 59.0 89.0 54.0 69.0 65 24 1
ContentreeJoongAng corp. 519.6B 64.0 67.0 88.0 90.0 74.0 82 25 1

Income Statement Analysis

While overall, JYP's income statement metrics were good, two metrics jumped up as significant positive drivers of the income statement's strength in JYP's recent report: EBITDA and Return Factors. JYP's management was effective in improving its EBIDTA, which now sits at 68.0B and represents a 8.6% change from the last reporting period. Companies in the same industry and market capitalization are typically affected by this parameter by up to 24.5%. The company is headed in the right direction regarding EBITDA, exhibiting efficient capital controls and strong overall financial performance. The company's EBITDA movement, therefore, received a grade of 84. On the other hand, Revenue Efficiency, jumped out as looking problematic. JYP management did an underwhelming job managing revenue efficiency this past period. JYP's revenue efficiency is 229.4B according to the metrics in the current filing, which represents a 18.3% change from the previous report. This metric might have a 7.5 percent impact on companies in the same industry and with the same market capitalization. Their revenue efficiency does not make a compelling case for upward pressure on the company's stock price. As a result, their revenue efficiency earned a score of 40. Consequently, their income statement earned a rank of 75.

Parameter Value Change Score
EBITDA 68.0B 8.6% 84
Total Revenues 229.4B 18.3% 40
Return on Equity 32.0 3.5% 78
* All values are TTM

The below chart describes JYP's performance as reflected on its income statement with respect to its peers. While JYP received a income statement score of 75 , the average of its peers stands on 69.

  •  A035900
  •  Peers average
Name Market Cap Revenue Momentum Earning Movement Return Factors Momentum Income Statement mc_sort Hidden
Kakao Games Corp. 3.5T 40.0 90.0 90.0 80 0 1
Pearl Abyss Corp. 2.7T 79.0 75.0 56.0 77 1 1
Studio Dragon Corporation 2.2T 44.0 90.0 91.0 81 2 1
SM Entertainment Co., Ltd. 1.9T 40.0 90.0 90.0 79 3 1
CJ ENM CO., Ltd. 1.7T 44.0 77.0 40.0 66 4 1
Wemade Co.,Ltd. 1.2T 45.0 40.0 43.0 41 5 1
Nexon GT Co., Ltd. 871.6B 43.0 88.0 86.0 83 6 1
NEOWIZ 844.7B 51.0 88.0 82.0 79 7 1
Wysiwyg Studios Co., Ltd. 828.0B 46.0 96.0 93.0 84 8 1
YG Entertainment Inc. 812.4B 60.0 85.0 71.0 80 9 1
Com2uS Corporation 739.1B 41.0 44.0 41.0 43 10 1
Neptune Company 560.7B 55.0 51.0 67.0 54 11 1
GIANTSTEP Inc. 521.3B 46.0 39.0 40.0 40 12 1
Devsisters corporation 488.2B 97.0 40.0 41.0 54 13 1
Webzen Inc. 487.7B 85.0 76.0 71.0 80 14 1
Wemade Max Co., Ltd. 397.8B 38.0 97.0 96.0 85 15 1
SM Culture & Contents Co., Ltd. 324.5B 83.0 75.0 90.0 80 16 1
JOYCITY Corporation 298.0B 89.0 42.0 40.0 56 17 1
Chorokbaem Media Co., Ltd. 260.1B 41.0 90.0 56.0 78 18 1
KRAFTON, Inc. 10.6T 93.0 57.0 44.0 68 19 1
Ncsoft Corporation 9.6T 54.0 87.0 82.0 80 20 1
HYBE Co., Ltd. 5.9T 47.0 69.0 72.0 64 21 1
Netmarble Corporation 4.0T 56.0 41.0 37.0 44 22 1
CJ CGV Co., Ltd. 837.4B 38.0 96.0 95.0 82 23 1
NHN Corporation 813.2B 61.0 46.0 44.0 50 24 1
ContentreeJoongAng corp. 519.6B 73.0 93.0 90.0 91 25 1

Cash Flow Analysis

JYP appears likely to maintain its strong cash flow metrics and momentum going forward. JYP's management was effective in improving its CapEx, which now sits at -289.0M and represents 34.1% change from the previous report. This performance is all the more impressive relative to their peers and competitors. Therefore, its CapEx movement component earned a score of 96. Also, JYP is doing a remarkable job of keeping its asset turnover under control. At filing, their asset turnover metrics were 0.8, representing a 12.6% change from the previous period. Companies in the same industry and market capitalization are typically affected by this parameter by up to 3.9%. Their impressive asset turnover metrics, specifically in contrast to their industry peers' performance, should support a tailwind in the company's stock price. The company's asset turnover movement, therefore, received a grade of 87. However, one discouraging result, Net Cash Flow, stood out. JYP's management was not successful in meaningfully improving their cash flow metrics. As of the current filing, they were reported as 7.9B and represented a -45.6% change from the previous period. JYP's net cash flow metrics are especially disappointing relative to their peers. Its net cash flow, therefore, received a grade of 80. Their cash flow, therefore, earned a score of 90.

Parameter Value Change Score
Net Cashflow 7.9B -45.6% 80
Capital Expenditure -289.0M 34.1% 96
Asset Turnover 0.8 12.6% 87
Free Cashflow Per Share 1.5K 13.5% 81
* All values are TTM

The below chart describes JYP's performance as reflected on its cash flow with respect to its peers. While JYP received a cash flow score of 90, the average of its peers stands on 72.

  •  A035900
  •  Peers average
Name Market Cap Cashflow Momentum Free Cashflow Growth Capital Expenditure Growth Assets Factors Momentum Cash Flow mc_sort Hidden
Kakao Games Corp. 3.5T 69.0 85.0 38.0 54.0 64 0 1
Pearl Abyss Corp. 2.7T 86.0 38.0 40.0 54.0 67 1 1
Studio Dragon Corporation 2.2T 73.0 85.0 43.0 82.0 74 2 1
SM Entertainment Co., Ltd. 1.9T 84.0 92.0 94.0 77.0 89 3 1
CJ ENM CO., Ltd. 1.7T 74.0 54.0 54.0 77.0 70 4 1
Wemade Co.,Ltd. 1.2T 43.0 41.0 37.0 81.0 46 5 1
Nexon GT Co., Ltd. 871.6B 90.0 90.0 43.0 93.0 87 6 1
NEOWIZ 844.7B 88.0 89.0 64.0 78.0 86 7 1
Wysiwyg Studios Co., Ltd. 828.0B 88.0 82.0 96.0 74.0 90 8 1
YG Entertainment Inc. 812.4B 46.0 46.0 64.0 77.0 53 9 1
Com2uS Corporation 739.1B 64.0 45.0 98.0 56.0 64 10 1
Neptune Company 560.7B 65.0 73.0 83.0 39.0 64 11 1
GIANTSTEP Inc. 521.3B 57.0 64.0 44.0 90.0 60 12 1
Devsisters corporation 488.2B 47.0 41.0 83.0 38.0 48 13 1
Webzen Inc. 487.7B 61.0 56.0 84.0 55.0 63 14 1
Wemade Max Co., Ltd. 397.8B 77.0 97.0 94.0 59.0 82 15 1
SM Culture & Contents Co., Ltd. 324.5B 59.0 94.0 93.0 65.0 71 16 1
JOYCITY Corporation 298.0B 61.0 94.0 97.0 43.0 65 17 1
Chorokbaem Media Co., Ltd. 260.1B 92.0 86.0 97.0 94.0 99 18 1
KRAFTON, Inc. 10.6T 76.0 67.0 96.0 63.0 77 19 1
Ncsoft Corporation 9.6T 73.0 80.0 71.0 71.0 73 20 1
HYBE Co., Ltd. 5.9T 77.0 92.0 94.0 63.0 80 21 1
Netmarble Corporation 4.0T 93.0 87.0 97.0 85.0 97 22 1
CJ CGV Co., Ltd. 837.4B 77.0 95.0 97.0 60.0 80 23 1
NHN Corporation 813.2B 61.0 37.0 38.0 63.0 52 24 1
ContentreeJoongAng corp. 519.6B 83.0 95.0 67.0 56.0 78 25 1

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