我们对HYBE向腾讯音乐出售SM股份的看法

Issuer of report:The Hongkong and ShanghaiBanking Corporation Limited, Seoul SecuritiesBranchView HSBC Global Research at:https://www.research.hsbc.comListen to our insightsHSBC Global Research PodcastsJunhyun Kim*Analyst, Korea Internet Gaming and EntertainmentThe Hongkong and Shanghai Banking CorporationLimited, Seoul Securities Branchjunhyun.kim@kr.hsbc.com+82 2 3706 8763* Employed by a non-US affiliate of HSBC Securities (USA) Inc, and isnot registered/ qualified pursuant to FINRA regulationsEquitiesMediaKoreaMarket cap2025e(USDm)PE8,67444.8x2,16210.9x*1,92714.2x*89434.9x Upside/downside ◆◆◆◆◆32.6%23.2%28.7%25.5% Find out more2026e2025-26ePEAvg. OP growth27.0x74.6%19.5x59.4%16.6x25.5%21.3x59.9% Key reports1)HYBE Corp (352820 KS)-Buy: Global ambitions, ample room ahead,23 May 20252)Dear U (376300 KS)-Buy: Expectations look achievable, rally not over,19 May 20253)JYP Entertainment Corp (035900 KS)-Buy: Could be time for the laggard to catch up,14 May 20254)SM Entertainment (041510 KS)-Buy: Entering into a fully-fledged growth cycle,7 May 2025Exhibit 1: Shareholding relationship between major K-popcompanies and TencentNote: For the red circle, HYBE will dispose its stake in SM to Tencent Music Entertainment on30May.Exhibit 2: HYBE’s Weverse: Quarterly MAUtrendSource:Company data, HSBCHYBE(352820 KS)Si-hyuk Bang31.57%TencentMusicEntertainment(TME US)024681012(m) Exhibit 3: Bubble: User base by region (asof 1Q25)Source:Company data, HSBCSMEnt.(041510KS)Kakao(035720 KS)21.6%KakaoEntertainment19.9%9.4%9.4%YGEnt.(122870 KS)TencentHoldings(700 HK)4.3%Naver(035420KS)8.9%Hyun-sukYang19.3%MAXIMOPTE. LTD.(Subsidiary ofTencent)6%Dear U(376300 KS)42.6%28%35%5%14%3%7%8%KoreaChinaSouth East AsiaJapanEuropeUSOthers Risksto our viewKey downside risks: (1)major artistsunexpectedly leaving Bubble; (2)significantdelays in new businesses for better monetisation(like artist hand-written fonts); (3)slower-than-expected MAU growth for Bubble; and (4) weaker-than-expected impact on earnings from thepartnership with TME. ValuationWecontinue to use a target PE multiple to derive our fair valuetargetpricefor DearU. To set our target multiple,we look to peers and usesocialnetworkingsite (SNS) platforms and entertainmentcompaniesas references because Dear U is a fan-based SNS platformbased onpopular artist IPs from variousentertainment companies. Wederiveour unchanged target PE multiple of 22.1x as we add a15%(unchanged)discount to the five-year average PE of the peer group(unchanged).Applying this multiple to our2026e EPS forecast of KRW2,434(unchanged) gives us a rounded target price of KRW65,000(unchanged). Our target price impliesc25.5% upside; we maintainour Buy rating accordingly. Disclosure appendixAnalyst CertificationThe following analyst(s),economist(s), or strategist(s) who is(are) primarily responsible for this report, including any analyst(s)whose name(s) appear(s) as author of an individual section or sections of the report and any analyst(s) named as the coveringanalyst(s) of a subsidiary company in a sum-of-the-parts valuation certifies(y) that the opinion(s) on the subject security(ies) orissuer(s), any views or forecasts expressed in the section(s) of which such individual(s) is(are) named as author(s), and anyotherviews or forecasts expressed herein, including any views expressed on the back page of the research report, accurately reflecttheir personal view(s) and that no part of their compensation was, is or will be directly or indirectly related to the specificrecommendation(s) or views contained in this research report: Junhyun KimImportant disclosuresEquities: Stock ratings and basis for financial analysisHSBC and its affiliates, including the issuer of this report (“HSBC”) believes an investor's decision to buy orsell a stock shoulddepend on individual circumstances such as the investor's existing holdings, risk tolerance and other considerations and thatinvestors utilise various disciplines and investment horizons when making investment decisions. Ratings shouldnot be used orrelied on in isolation as investment advice. Different securities firms use a variety of ratings terms as well as different ratingsystems to describe their recommendations and therefore investors should carefully read the definitions of the ratings used ineach research report. Further, investors should carefully read the entire research report and not infer its contents from theratingbecause research reports contain more complete information concerning the analysts' views and the basis for the rating.From 23rd March 2015 HSBC has assigned ratings on the following basis:The target price is based on the analyst’s assessment of the stock’s actual current value, although we expect it to take sixto 12months for the market price to reflect this.When the target price is more than 20% above the current share price, the stockwillbe classified as a Buy; when it is between 5% and 20% above the current share price, the stock may be classified