Uncertainty surrounding the renewal of S.H.E. singer Ella Chen’s (陳嘉樺) agency contract with record label HIM International Music Inc (華研國際) last week harmed shares in the company, wiping out NT$1.3 billion (US$42.54 million) of its market value over the past three sessions, TAIEX tallies showed.
Shares in HIM continued falling for three consecutive sessions at the end of last week to close at NT$113.5 in Taipei trading on Friday. They lost 28.16 percent during the week amid reports by local media, including the Mirror Weekly magazine and online news outlet ETtoday, about the singer potentially transferring the contract to her husband, Alvin Lai (賴斯翔), after its expiration with HIM in September last year.
The reports raised speculation about a breakup of S.H.E., which would put an end to the 17-year phenomenon that is one of the most popular girl groups in contemporary Taiwan, as well as other Chinese-speaking countries.
Photo: Pan Shao-tang, Taipei Times
In a filing with the Taiwan Stock Exchange on Thursday, HIM denied the S.H.E. breakup rumor, and said a 17th-anniversary celebration for the group, whose members also include Selina Jen (任家萱) and Hebe Tien (田馥甄), is to take place on Sept. 11 as scheduled.
According to the filing, the company’s partnership with Chen would continue.
However, Chen’s departure from HIM after September is expexted, as her husband has already been handling her agency affairs over the past three years, Capital Investment Management Corp (群益投顧) said.
“Hence, Ella’s partnership with HIM does not guarantee a renewal of her agency contract with the company,” Capital Investment said in a note on Thursday.
Chen contributes about NT$150 million to NT$200 million to HIM’s agency income annually, Capital Investment said, adding that the transfer of her agency contract could weigh on HIM’s earnings per share by NT$0.25 to NT$0.45 this year and by NT$1 to NT$1.5 next year.
HIM reported net income of NT$321 million for last year, up 14 percent from the previous year, with earnings per share of NT$6.81, while overall revenue fell 5 percent year-on-year to NT$1.55 billion.
In the first six months of this year, HIM posted pretax profit of NT$295.02 million, or NT$5.42 per share, it said on Friday.
Jih Sun Securities Investment Consulting Co (日盛投顧) said it still holds a neutral outlook on HIM, as Chen is likely to continue collaborating with the company in terms of the music business.
“The singer’s plan for the future and the continuation of S.H.E. are two separate things,” Jih Sun said in a note on Thursday.
HIM’s cooperation with NetEase Cloud Music (網易雲音樂), China’s fourth-largest digital music platform, would contribute significantly to its licensing income this year, Jih Sun added.
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