The group of SM Entertainment AESPA K-POP girls during a media showcase in Seoul, South Korea.
Han myung-gu / wireimage
Cbillionaire My huatengThe Tencent technology giant should acquire a participation of almost 10% in K-Pop Agency SM Entertainment de Billionaire Bang Si-HyukThe Rivale HYBE agency because the defrosting relations between China and South Korea have reported a potential increase in the demand for Korean cultural exports.
Tencent Music Entertainment Group, Tencent’s online music arm, will buy 2.2 million Hybi shares in SM Entertainment for 243 billion won (176.6 million dollars), according to a Hybe business file on Tuesday. The shares, of which Hybé will have in an exchange of blocks after the opening hours on May 30, are at the price of 110,000 won each, which represents a discount of approximately 15% compared to their price of 130,000 won at the end of the Tuesday market.
During the sale, Tencent Music will hold a participation of 9.7% in SM Entertainment, making it the second shareholder of the K-POP agency after the billionaire Kim Beom-Su“S Kakao and its entertainment affiliate. The Korean Internet giant holds a combined participation of 41.5% in SM Entertainment, between Kakao Corp. (with 21.6%) and its subsidiary Kakao Entertainment (19.9%). Tencent also has a 5.95% participation in Kakao Corp.
Hybe said in his file that the aim of selling shares is “to optimize the efficiency of investment asset management”. Tencent Music and SM Entertainment did not immediately respond to a request for comments.
“In the midst of recent tariff disorders, the K-POP industry remains defensive and relatively isolated from the risks of direct tariff,” wrote researchers from Global X, a supplier ETF by Mirae Asset Global Investments, in a monthly commentary report Posted last Tuesday. “In addition, the sector is due to the improvement of Korean-Chinese relations, as the potential reopening of the Chinese market could unlock significant growth opportunities.”
Other factors, including the return of the main artists and the rise of new, could also play a role in improving the fundamentals of the industry, added the researchers. SM Entertainment, in particular, can expect to benefit from “to come to come from key artists such as AESPA, NCT WISH and RIIZE”. The group of comforting boys from the Hybé world, BTS, which marked six albums No. 1 on the American 200 200 Billboard, could meet in June at the completion of the seven members of their compulsory military service.
The Hybe BTS K-POP group of K-POP boys attends the 64th annual Grammy prizes.
Axelle / Bauer-Griffin / FilmMagic
Tencent Music’s latest investments align with growing hopes in the entertainment sector that Beijing could raise its unofficial prohibition of K-Pop’s performance. Following Seoul’s decision in 2016 allowing American soldiers to deploy an anti-missile defense system in the South Korean airspace, Chinese regulators have effectively prevented K-Pop concerts from taking place on the continent, while restoring streaming platforms by publishing television and movies in Korean.
The first sign of relaxation came at the end of April, while the EPEX, a group of K-Pop boys managed by C9 Entertainment, announced on April 30 that it would organize a concert in Fuzhou, the capital of the Southeast of the Chinese province of Fujian. But less than two weeks later, on May 10, the concert was indefinitely postponed, with C9 Entertainment citing “problems” not specified in the region.
The reopening of Chinese borders to the performance of K-POP could be a boon for major agencies, which are based on sales and goods sales as key income sources. SM Entertainment said its revenues had reached 231.4 billion WONS in the first quarter, with concert revenues increasing 58% in annual shift to 39 billion WONS.
Beyond live events, K-POP agencies increasingly monetize fans’ commitment, mainly via applications that offer paid subscriptions to fans to send messages directly to celebrities or join exclusive live flows. Tencent announced last October that he would associate with a subsidiary SM Entertainment, Dearu, to launch its application of fans engagement, Bubble, in China. Disabled to enter the market by June, Bubble could face strong competition from other popular applications like Hybé’s Weverse, which announced in April that it had reached 9.4 million monthly active users and 150 million cumulative downloads by the end of 2024.
The purchase of actions marks the solidified role of Tencent among the main “Big 4” music agencies in Korea – Hybi, Jyp Entertainment, SM Entertainment and YG Entertainment – with each agency distinguished by a handful of brand acts. Tencent Music holds a 4.3% stake in YG Entertainment, known for his group of Landmark Blackpink girls, who made 30 Asia less than 30 Asia list in 2019; JYP’s artists include Girl Group twice, which did the list in 2020, and a group of boys wandering for children, which made the list This year.