The K-pop industry has been on a roll with a string of solid results, but a thawing of China-South Korea relations could supercharge growth.
The K-pop industry has been on a roll with a string of solid results, but a thawing of China-South Korea relations could supercharge growth.
Hybe, the powerhouse agency behind K-pop boy band BTS, saw its second-quarter revenue rise 10% from year earlier to about $510 million, a record for the period, while its operating profit surged 29% supported by concert attendance and merchandise sales.
Hybe, the powerhouse agency behind K-pop boy band BTS, saw its second-quarter revenue rise 10% from year earlier to about $510 million, a record for the period, while its operating profit surged 29% supported by concert attendance and merchandise sales.
The momentum is expected to accelerate in the third quarter. Hyundai Motor Securities analyst Kim Hyun-yong expects Hybe’s operating profit to jump 51% from a year earlier thanks to global fan demand and new group debuts.
“Hybe holds a unique position as the only K-pop agency fully capitalizing on key drivers: accelerating demand in Western markets and a potential upside from a relaxation of China’s unofficial entertainment sanctions,” Kim said.
Other entertainment companies are also thriving. SM Entertainment, which manages girl groups Red Velvet, Girls’ Generation and aespa, saw its revenue jump 19% with merchandise sales hitting a quarterly high.
CJ ENM’s music segment saw its operating profit surge about 250%, driven by album sales and concerts, while Galaxy Entertainment, which manages K-pop icon G-Dragon, is also looking to ride the wave with a $1 billion initial public offering next year.
That growth story could get a big second wind—signs of a diplomatic thaw with China are rekindling hopes of a major market reopening for the industry.
Beijing viewed South Korea’s 2016 decision to deploy a U.S. missile-defense system as a threat to national security, and Chinese policymakers responded with informal curbs on sales of Chinese tour packages to South Korea and a block on Korean cosmetics, soap operas and K-pop stars.
But there are signs of warming relations on this front.
South Korea this week said it would allow visa-free entry for Chinese group tourists starting in September, potentially boosting concert attendance and physical album sales.
Also, China’s Tencent Music Entertainment took a 9.4% stake in Korea’s SM Entertainment in May, while JYP Entertainment is planning to launch a second “localized group” in China later this year.
China was a crucial target market for K-pop companies prior to the informal ban, Mirae Asset analyst Lizzy Liu noted, and a reopening “is not simply a return to past successes but potentially a springboard for even greater expansion within China and beyond.”
Although the pace of the reopening remains policy-sensitive, “Korean entertainment companies with multilingual artists, strong digital channels, and operating experience in China stand to benefit,” Nomura analysts Angela Hong and Won Kang said.
Hybe remains Nomura’s top pick in the sector, thanks to solid monetization of its intellectual property and a potential BTS comeback in early 2026. The brokerage also sees SM Entertainment as well-positioned, especially after Tencent Music acquired a stake and signed a strategic partnership to support content distribution in China.
A full lifting of China’s informal K-pop ban could kick off a multiyear growth cycle for Korean entertainment firms, offering a powerful tailwind for companies already ramping up global expansion, analysts said.
Write to Jihye Lee at jihye.lee@wsj.com