NewJeans' possible exit from ADOR estimated to cost 35 billion KRW to entertainment giant HYBE; Know more

If NewJeans decide to leave ADOR, will its parent company HYBE go into a huge loss? Read on to know what the prediction says.

Updated on Sep 29, 2024  |  04:22 PM IST |  275.3K
NewJeans, HYBE: image from ADOR, HYBE
NewJeans, HYBE: image from ADOR, HYBE

In light of the recent feud between Min Hee Jin and HYBE, financial data analysis claims if NewJeans decides to part ways with ADOR, the parent company might face a huge loss. According to a recent report, the company might lose around 35 billion KRW, if the girl group decides to leave the agency after their demands were not met.

According to Korea JoonAng Daily, recently NH Investment & Securities downgraded HYBE's target share price following the company’s dispute with former ADOR CEO Min Hee Jin. In light of the situation, the financial firm excluded the girl group from its projection.

In a report released on September 26, NH Investment & Securities slashed the company’s predicated share price by 4 per cent, from 280,000 KRW to 270,000. This calculation excluded NewJeans’ upcoming activities that would have contributed to HYBE’s profit including - the potential sales price of a full-length album that the group previously planned to release in the second half of 2024, a world tour, and new music that was scheduled for 2025. 

It was previously estimated that including all these activities from NewJeans would bring HYBE 10 billion KRW in operating profit for the second half of 2024 and an additional 25 billion KRW in 2025 - a total fo 35 billion KRW. So, if the girl group decides to leave the company, they can lose up to this whopping amount in profit.

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NH Investment & Securities analyst Lee Hwa Jeong stated “Assuming the worst-case scenario with a conservative approach, we have lowered the company’s performance estimate under the premise of NewJeans’ absence.”

Meanwhile, HYBE has been embroiled in a legal battle with former ADOR CEO Min Hee Jin for months. The long-going conflict resulted in her dismissal from the CEO position, which was then replaced by internal director Kim Joo Young.

NewJeans, who didn’t like this new management change, held an emergency live, giving HYBE an ultimatum that she should be reinstated by September 25. Min Hee Jin herself filed for an injunction for the same. 

However, on September 25, ADOR’s new management declared that the decision was taken by the board of directors, so her reappointment as the CEO is ‘not acceptable’. At the same time, they have also affirmed that Min Hee Jin will continue to serve as NewJeans’ inside director for the next five years, the duration of their remaining contract. 

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Credits: Korea JoonAng Daily
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