HYBE faces potential financial hit of 35 billion KRW amidst feud with Min Hee Jin and NewJeans

The legal conflict between HYBE and Min Hee Jin has been ongoing for months, culminating in her dismissal from the CEO position at ADOR.

In the wake of the feud between HYBE and former ADOR CEO Min Hee Jin, financial analysts are predicting a substantial financial loss for HYBE if NewJeans decides to part ways with the agency. According to recent reports, the parent company could face a loss of around 35 billion KRW should the girl group leave after their demands were not met.

According to Korea JoongAng Daily, NH Investment & Securities recently downgraded HYBE's target share price in light of the ongoing dispute with Min Hee Jin. The financial firm revised its projections and excluded NewJeans’ upcoming activities from its financial forecast.

On September 26, NH Investment & Securities released a report slashing HYBE’s predicted share price by 4 percent, from 280000 KRW to 270000 KRW. This adjustment was based on the assumption that NewJeans would not be contributing to HYBE’s profit in the near future. The exclusion involved the anticipated revenue from a full-length album that NewJeans had planned to release in the latter half of 2024, a world tour, and new music scheduled for 2025.

Prior to this adjustment, it was estimated that these activities would generate approximately 10 billion KRW in operating profit for HYBE in the second half of 2024 and an additional 25 billion KRW in 2025. Therefore, the potential departure of NewJeans could result in a total loss of 35 billion KRW in profit for the company.

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

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The legal conflict between HYBE and Min Hee Jin has been ongoing for months, culminating in her dismissal from the CEO position at ADOR. She was replaced by internal director Kim Joo Young. In response to the management change, NewJeans held an emergency live session, demanding Min Hee Jin’s reinstatement by September 25. Min Hee Jin also filed for an injunction seeking her reappointment.

Despite these efforts, on September 25, ADOR’s new management announced that the decision to dismiss Min Hee Jin was made by the board of directors and her reappointment as CEO was deemed 'not acceptable.' However, they confirmed that Min Hee Jin would continue to serve as NewJeans’ inside director for the next five years, which aligns with the duration of their remaining contract.