The Korea Stock Exchange announced on May 4 that SM Entertainment and YG Entertainment were downgraded from top-tier blue chip companies to normal mid-sized businesses due to poor performance and increased equity losses. SM Entertainment dropped to the lower category after 13 years (first listed in March 2008), and YG Entertainment after 8 years (listed in April 2013).
By the end of 2020, SM Entertainment had a total equity of 608 billion KRW (approximately US $ 541 million) and YG Entertainment had 431 billion KRW (approximately US $ 383 million) equity. The three-year sales averages were well above the requirement, with KRW 617 billion (approximately USD 548 million) for SM Entertainment and KRW 259 billion (approximately USD 230 million) for YG Entertainment.
2020 was one of SM Entertainment’s worst years on record, and the company recorded a net loss of KRW 80.3 billion (approximately US $ 71.4 million) mainly due to the effects of the coronavirus outbreak. YG Entertainment made a net profit of 3.20 billion KRW (approximately US $ 2.84 million) in 2020, but due to losses in 2019 (approximately KRW 24.6 billion (approximately US $ 21.9 million)), three the annual average profit balance was not at the desired level.
Ranking among the “Big 3”, JYP Entertainment is the only agency remaining as a blue chip company. While JYP Entertainment has the lowest sales average (KRW 142 billion (about 126 million USD), its three-year net profit averages KRW 28.4 billion (about 25.2 million USD).
