BTS’s agency soars over 2 trillion won in corporate value

An analysis has been proposed to put the value of BTS’s agency Big Hit Entertainment at over 2 trillion won, with an effective status of a unicorn company (an unlisted company worth more than a billion dollars).

On Thursday, Hyundai Research Institute published a report titled “Analysis on BTS’s success and its applications,” eval‎uating the corporate value of Big Hit Entertainment between 1.28 trillion to 2.28 trillion won.

As Big Hit is an unlisted company, the research institute applied the price-earnings ratio (PER) of three local entertainment companies, such as JYP Entertainment, YG Entertainment, and SM Entertainment to eval‎uate the worth of BTS’s agency. According to FnGuide, a financial information firm, the PER of the three major agencies hovered around 40 last year. PER is drawn by dividing a company’s share price with its earnings per share. The analysis suggests Big Hit Entertainment’s value can be calculated by multiplying the agency’s PER with 50.2 billion won, its net profit last year, which leads to over two trillion won of corporate value.

In October last year, Big Hit Entertainment attracted an investment worth 104 billion won from a private equity fund named STIC Investment, having its corporate value evaluated at 850 billion won.

“The evaluation was based on a conservative perspective, so Big Hit’s actual value could be much bigger once the company is listed on stock exchanges,” said Park Yong-jeong, a senior researcher.

Founded by Producer Bang Si-hyuk, Big Hit Entertainment is an agency only with three teams of artists, with BTS’s share of profits being absolutely dominant. Effectively, the value of Big Hit can be equated with that of BTS.

“BTS’s reach is not confined to broadcasting; they can have a huge impact on nine different industries,” explained the senior researcher. “A business strategy is needed so that the boy band can actively harness all sets of added values.”


warum@donga.com