Big Hit Entertainment, the South Korean label behind the K-pop sensation BTS, could file for its initial public offering as early as this week.

Big Hit applied for a pre-IPO consultation with the Korea Exchange on May 21 ahead of its preliminary filing, according to industry sources on Tuesday.

Under local rules, companies need to discuss with the exchange the procedure and timing of the offering before it can hand in the initial paperwork.

The consultation process normally takes about a week. If no serious issues are found, Big Hit may be able to submit the preliminary prospectus from Thursday.

The agency has been readying for its IPO since late February. Bookrunners are NH Investment & Securities and Korea Investment & Securities, with Mirae Asset Daewoo and JPMorgan Chase as joint underwriters. The company last month announced it would go straight to the main Kospi bourse instead of Kosdaq where other entertainment names trade.

Big Hit has grown to become Korea’s biggest entertainment agency despite its humble start in 2005, thanks to the mega-success of its seven-member boyband.

Analysts predict Big Hit’s market cap could balloon to 2 trillion won ($1.62 billion). This would be 30 times its earnings as its net profit in 2019 was 72.4 billion won.

“Given BTS’ massive influence in the global entertainment industry, Big Hit could easily see a price-earnings ratio of 30 times, even up to 40 to 50 times,” projected Kim Hyun-yong, researcher at eBEST Investment & Securities.

By Pulse

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