Entertainment names underperform as semiconductors attract funds; analysts cite Xi’s Korea visit and BTS/Big Bang comebacks as potential catalysts

In a domestic stock market that has been booming, entertainment-related equities have been underperforming. The weakness comes as demand shifts toward large-cap semiconductors and as hopes for the loosening of China-related restrictions on Korean pop culture have cooled.

As of the previous day, the ACE KPOP Focus ETF, which tracks entertainment stocks, had fallen about 6% over the past month. Its major constituents also declined: HYBE (-1.9%), SM Entertainment (-18.3%), JYP Entertainment (-2.4%), YG Entertainment (-7.4%), and YG PLUS (-25.4%).

Analysts say the entertainment sector’s fundamentals remain intact and a rebound could come soon, with catalysts including the APEC summit and BTS’s upcoming full-group comeback. The possibility that Xi Jinping will visit Korea during APEC is viewed as a positive development for sentiment.

Ji In-hae, an analyst at Shinhan Investment & Securities, noted that short-term momentum cooled amid Chinese uncertainty, but added that China-related revenue in the sector remains on a stable growth path through fan meetings and pop-up stores even without Chinese concerts. Lim Su-jin, an analyst at Kiwoom Securities, described the recent decline in entertainment stocks as a temporary phenomenon driven by a high start-of-year return and a shift of funds toward semiconductors and secondary batteries.

There is also growing optimism among analysts that major groups like BTS and Big Bang could deliver strong earnings if they resume activities. Lee Ki-hoon of Hana Securities said, “Next year BTS’s full-group activities will resume, and BTS is expected to generate sales at a level comparable to the combined revenue of JYP Entertainment and YG Entertainment.” He also added that with Big Bang’s 20th-anniversary, a full-group comeback could be on the horizon, and the ensuing tour might yield revenues in a similar ballpark to YG Entertainment’s last year, around 360 billion won, given last year’s absence of Blackpink’s full-group activity.