SEOUL, January 05 (AJP) -South Korea’s K-pop sector retreated Monday as high expectations for an easing of China’s long-standing de facto ban on Korean entertainment though the momentum of President Lee Jae Myung’s state visit to Beijing fizzled out.
Shares that had rallied on optimism over renewed access to the Chinese market reversed sharply. HYBE fell 2.5 percent, JYP Entertainment slid 6.2 percent, and YG Entertainment dropped 7.5 percent. SM Entertainment posted the steepest decline, plunging 10.1 percent and erasing a large portion of recent gains tied to China-reopening hopes.
The retreat followed comments by presidential chief of staff Kang Hoon-sik, who said the “lifting of the unofficial ban on Korean culture is expected to take some time,” dampening expectations that concerts and broadcasts would resume in the near term.
Among the roughly 200-member business delegation accompanying Lee’s trip were entertainment industry figures, including Son Kyung-shik, chairman of CJ Group, and SM Entertainment CEO Jang Cheol-hyuk—fueling earlier speculation that progress on cultural exchanges could be imminent.
Entertainment stocks had surged ahead of the visit on prospects of concerts, broadcasts and online content distribution resuming in China, one of the industry’s most lucrative overseas markets.
Despite the sell-off, Choi Min-ha, an equity analyst at Samsung Securities, said fundamentals for leading entertainment companies remain intact, supported by robust global demand for K-pop, strong overseas touring and expanding digital content businesses.
Monday’s move suggests profit-taking and a reset of timelines rather than a reassessment of the sector’s long-term prospects, he added.
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