Shares of South Korean entertainment companies, including top three K-pop powerhouses Hybe, JYP Entertainment and SM Entertainment, surged to a new yearly high Thursday, buoyed by the prospect that China could lift its de facto ban on Korean cultural content.
Shares of Hybe, the K-pop giant behind BTS, closed trading at 248,500 won ($173) Thursday, gaining 1.43 percent from the previous trading day. During intraday trading, it reached a new 52-week high of 263,000 won.
SM Entertainment shares closed at 101,400 won, gaining 5.08 percent. JYP Entertainment rose by 1.73 percent to 82,500 won. Both stocks recorded a 52-week high during trading.
YG Entertainment wrapped up trading at 60,200 won, inching up by 13.16 percent. Shares of YG Plus, a YG Entertainment affiliate that focuses on music distribution and merchandising, hit the upper circuit limit of 30 percent, surging to 5,480 won.
The anticipation also pushed a rally of production company shares, as investors bet that companies would benefit from content rights sales to China. Shares of A Story, behind the hit TV series “Extraordinary Attorney Woo” in 2022, reached the upper circuit limit of 9,360 won.
Shares of Studio Dragon, under entertainment mogul CJ ENM, closed at 49,400 won, rising by 18.32 percent. The stocks also reached a 52-week high of 51,700 won during trading.
According to a local news report, the Chinese government plans to lift its blanket ban on Korean entertainment content. Though the Chinese government has never officially acknowledged the ban's existence, the sanction is assessed to have been imposed as part of economic retaliation following Korea's deployment of a US THAAD antimissile system on its soil in 2017.
The news report quoted a senior official from the China-Asia Pacific Cooperation Center, a government body involved in preparing for the upcoming Asia-Pacific Economic Cooperation summits, saying the country plans to open borders to cultural exchanges with Korea by dispatching a delegation to the country next month. The report suggested a full reopening could come in May at the earliest.
“This is the time when the possibility of a ban lift is the highest in terms of the political and economic circumstances,” Shinhan Securities analyst Ji In-hae said.
"But as it has been a while (since Korea-China ties were cut off), the key intellectual properties of entertainment companies have not yet fully experienced the Chinese market. We cannot yet project which company will benefit most from the lifting of the ban.”
By Im Eun-byel (silverstar@heraldcorp.com
