Hybe, SM, JYP and YG defy South Korea’s woes and Trump tariff threats

South Korea’s economy has been slowing, with growth hitting a multi-quarter low. It’s currency has been under pressure, and the country is in political turmoil. Trump tariff threats have not made things easier.

But there is one sector that has offered hope to investors this year. One of South Korea’s largest cultural exports: K-pop.

Shares of the four major K-pop companies have gained between 20% and 33% so far this year, outperforming the Kospi‘s 5.39% gain and the Kosdaq’s 8.8% rise, as of March 4. Hybe, JYP and YG have also hit new 52-week highs this year.

Hybe, which counts supergroup BTS among the artists in its stable, is the largest K-pop agency by market cap and part of the blue-chip Kospi index, while SM Entertainment, JYP Entertainment and YG Entertainment are included in the small-cap Kosdaq.

The gains mark a turnaround in the companies’ share performance from 2024, when they had tumbled as downbeat album sales hit profits.

One of the reasons that K-pop stocks are receiving renewed investors interest is because the sector does not face the risk of U.S. tariffs, Shinhan Securities analyst Ji In-hae wrote last month, according to a Google translation of her note in Korean.

Tariffs have been a huge source of uncertainty for South Korea with Trump’s threat of “reciprocal tariffs” looming large.

The country has the largest tariff differential on a weighted average basis with the U.S. among Asian economies, which means that should Trump follow through on his threats, South Korea could be hit with huge tariffs.

The optimism around K-pop stocks has also got to do with the potential boost the industry is set to receive this year.

Shinhan Securities’ Ji is “overweight” on South Korea’s media and entertainment sector, citing factors such as the industry’s expected strong performance in 2025 as popular artists return and profits increase compared to a low base last year, as well as China reopening its market to South Korean entertainment.

The Korea Economic Daily reported last month that China will likely lift its ban on events showcasing Hallyu, or Korean popular culture in the country, as early as May.

Asia’s largest economy imposed a ban on South Korean content in 2017 in retaliation to the country’s deployment of U.S terminal high altitude area defense, or THAAD missile defense system, the report said.

The return of popular groups in the industry and performance of large scale world tours till 2026 will be a “stronger investment point” for the sector, said Ji.

BTS is expected to resume full-group activities as early as June, while Blackpink has announced plans to launch a world tour in the second half of the year.

While the four members of Blackpink did not re-sign with the label when their individual contracts expired in 2023, Blackpink’s group activities are still managed by YG Entertainment.

SM Entertainment and JYP have also debuted new groups in 2025. SM’s new rookie group Hearts2Hearts is the company’s first girl group in four years, while JYP’s new boy group KickFlip also made its debut in January.

Citi analysts said in a note in November that they were “turning constructive” on the sector, expecting the aggregate revenue of the Big Four agencies to grow by over 21% in 2025 and nearly 15% in 2026.

Citi states that the return of popular groups “will do more than just drive album and concert revenues — it should also boost ROI across multiple businesses. Fandom platforms, for instance, will see an increase of user traffic, and younger artists under [the] same labels can showcase opening acts at top artists’ concerts.”