Operating profit declined 16% year-on-year to 40.8 billion won as MD base effects from Stray Kids’ SKZOO shaped the quarter

Shin Young Securities predicts that JYP Entertainment’s ongoing growth of low-tenure IP will sustain stable profits. The firm maintains a Buy rating and a target price of 100,000 won. In the third quarter, JYP reported revenue of 232.6 billion won, up 37% from a year earlier, while operating profit fell 16% year-on-year to 40.8 billion won.

The key point in the results was MD (merchandise) sales. Last year, Stray Kids’ SKZOO MD revenue contributed to a high base, but this year the base was absent, resulting in MD revenue down 21% year-on-year. Shin Young attributed the weaker gains to this base effect and other cost dynamics.

Regarding cost dynamics, the report noted that new IP launches and renegotiation costs for existing IPs—such as China rookies CIIU and Youngbin, and the GIRLSET branding—were reflected in the figures. Nevertheless, DAY6 and ITZY renewals indicate that management’s alignment with artist growth supports business stability.

JYP is focusing on MD cost efficiency and expanding product lines and regions. The firm also highlighted the FANS program, which aims to cut fees and streamline logistics, with a new digital paid integrated membership launched in the third quarter.

Looking ahead, artist IPs are viewed positively for stability. NMIXX is set to perform two shows in Korea in November before a global tour to North America and Europe, and KickFlip has shown continued growth through its debut and mini-album, suggesting that low-tenure IP growth could stay a source of steady earnings.