Target price cut to 70,000 won; 3Q sales decline cited; EspaPing revenue expected to reach a record in Q4.

Yu Jin Investment Securities lowered SAMG Entertainment’s target price from 90,000 won to 70,000 won, while maintaining a Buy rating, on the 18th. The firm notes that SAMG’s third-quarter revenue declined 13.1% year-on-year to 21.7 billion won, with an operating loss of 700 million won, continuing the quarterly deficit.

The report explains that the 3Q top line was affected by seasonality, and the removal of the previous year’s Love Chu Ping boost contributed to the smaller revenue figure.

Lee Hyun-ji, a researcher at Yu Jin Investment Securities, said the fourth quarter should be a seasonal peak and that a new season of TiniPing would be unveiled, with EspaPing revenue expected to be recognized and possibly driving record-high quarterly results.

SAMG Entertainment is preparing for events including the release of a follow-up to TiniPing and a third collaboration with an SM Entertainment artist.

The analyst noted that despite lowering the target price to 70,000 won, there is no change to SAMG’s earnings trajectory or long-term growth path. For multiples to improve, global expansion is deemed essential, with China set to air TiniPing Season 5 and Japan already airing Season 3 in July, which should help sustain revenue.

In addition, the analyst highlighted that Europe (Russia) has seen double-digit sales from Metal Card Bot, and while overseas sales had largely come from China in the past, next year is expected to shift toward Japan as a focal point for global expansion.