BTS is back, Blackpink's on tour. Here's what it means for high-flying K-pop stocks

CNBC

11-07-2025

K-pop boy group sensation BTS, having seen all its members return from South Korea's mandatory military service, has announced a new album and world tour in spring 2026 — their first group performance in over three years. K-pop girl group Blackpink returned to the stage to entertain 78,000 fans last weekend, marking the start of their "Deadline" world tour. The concerts come after a little over two years from their last world tour, "Born Pink," which was reportedly the highest grossing world tour by a girl group in history . As K-pop agencies turn to world tours to shore up their balance sheet, in light of softer revenue growth from album sales , investors stand a chance to gain from the sector, fueled by millions of adoring fans, and billions of YouTube streams. South Korea's "Big Four" K-pop agencies are all listed and most of them have seen massive gains in share prices this year as big names return and investors foresee a better year for the sector. Hybe Corporation, the world's largest K-pop agency in terms of market-cap, is part of South Korea's blue-chip Kospi index, while SM Entertainment, JYP Entertainment and YG Entertainment are part of the small-cap Kosdaq. Prospects and outlook Goldman Sachs said in a note last month that investors should look for "Mega IPs" in K-pop — groups that can attract an audience of over 1.5 million per tour. That level reflects that a band has been able to break past K-pop's traditional target markets into the Western music scene, the firm said. Currently, only four groups meet this criterion. "The common denominator of the four K-pop Mega IPs is that they are also the only K-pop bands capable of a full stadium tour in the U.S," Goldman said, adding that other, newer groups have not seen such success. Hybe is Goldman's top pick, as its boy groups Enhypen and Seventeen are on the verge of commencing full stadium tours in the U.S. and becoming Mega IPs. Enhypen had seen 1.2 million people attend their world tour, while Seveteen attracting an audience of 1 million in its 2024-2025 world tour. While JYP has two of the four so-called Mega IPs, Goldman notes that it sees short-term earnings turbulence, due to its reliance on just a few mature artists and contract renewal of Stray Kids, which will limit margin expansion in the short term. When artists renew their contracts, they typically take a higher share of the revenue split, according to Jiwoo Oh, a research analyst at investment firm CGS International Securities Korea. K-pop artists sign an initial standard seven-year contract with their agencies, which means that Stray Kids, having debuted in 2018, should be reaching the end of their contracts this year. Morgan Stanley, in a June 26 note, said that "the absence of new performers in JYP continues to be a weak point." "We believe the stock needs to see more artists contributing to top line growth, and new teams emerge to support longer-term growth." Both firms are pessimistic on YG, despite the fact that the agency is home to the popular Blackpink. "We believe expectations for Blackpink has been over reflected in share price ... High reliance on single IP and [a] shallow slate of performers remain a concern," Morgan Stanley said. YG currently has just three active groups: Blackpink, boy group Treasure, which debuted in 2022, and rookie girl group Babymonster, which entered the industry in 2024. Goldman also said that YG's valuations were "slightly stretched," as the company lacked visibility on new Mega IPs in the near future, and rookie group Babymonster was yet to display engagement levels that will position it as a future Mega IP. The two firms differed on SM Entertainment's prospects. While Morgan Stanley said the company was its top pick due to its well-diversified portfolio of artists, Goldman pointed out that SM lacked a track record of producing Mega IPs, with none of its groups having reached that status.