VIP Research & Management got into K-pop and drama-related stocks even before “Squid Game” sparked a global boom in Korean entertainment, and even after those bets paid off, the sector continued to grow. remains bullish on
SM Entertainment and Seoul Broadcasting have been and still are among the top contenders for the $2.5 billion South Korean asset manager, which began buying stakes in media companies such as K-pop agencies and JYP Entertainment starting in 2020. I have. After the production company’s Netflix series “DP” and “Hellbound” became its latest K-drama hits, it sold its entire stake in Contentry Chuo Co., Ltd. in the second half of 2021, with its share up 44% last year, six years later. It was the highest for the first time in a while.
These investments have helped VIP’s flagship fund outperform its benchmark Kospi. One of his best performing funds, ‘Buy Cheap Korea’, has risen 91.9% over the past two years, beating his 6.3% rise in stock benchmarks. A 22% slump in the loss and a small Kosdaq.
VIP’s focus on Korean entertainment stocks reflects the growing global popularity of Korean dramas and musicians. The stocks offer an alternative to investors in South Korea’s tech stock market, which is in a bear market amid a weak global economic outlook and fears of aggressive rate hikes by the Federal Reserve.
“We used to have a prejudice against the Korean entertainment sector,” Seoul-based asset manager Choi Jun-chul said in an interview with Bloomberg News.
“They depend on shows and groups to make or break. They rely too much on star talent. Their management governance is not as mature as manufacturing.” he said. That changed with the emergence of a cult-like global fandom. ”
Companies like JYP Entertainment are looking to improve their corporate governance, but the acquisition of Justin Bieber’s manager by Hybe Co., the agency behind mega-hit band BTS in 2021, will also depend on K-pop agencies. Choi, an example of trying to move away from, has a lot to say to one artist.
avoid chip makers
Choi said VIP does not own stakes in domestic powerhouses such as Samsung Electronics and SK Hynix. Instead, the company’s strategy is to find undervalued value stocks among South Korean SMEs.
Despite the bear market, it’s not time to leave the Korean stock market because there are “many bargain stocks,” he said. Lululemon.