South Korea’s Big Hit Entertainment, home to global K-pop sensations BTS, is moving toward an IPO and recently selected underwriters. Sources in the investment banking industry say JP Morgan, NH Investment & Securities, and Korea Investment & Securities were chosen as main managers early this week, while Mirae Asset Daewoo is also on board as a joint manager.

According to a banker that took part in the selection process, Big Hit stated in its request for proposals that it aims to enter the stock market in 2020. The source, who spoke to Variety on the condition of anonymity, said the stock firms that had bid for the deal evaluated the label’s maximum valuation to be $5 billion (KRW 6 trillion), but also said the price was partly due to the intense competition.

“We see that there’s a fair chance that Big Hit will go for an IPO at a valuation set between $2.5 billion and $3.3 billion,” the source told Variety. “The label’s performance in 2019, the popularity of BTS, and the price-earning ratio of local entertainment companies listed in the Korean stock market have been taken into account [to come up with the valuation],” he added. “The IPO will draw a lot of interest from both local and international investors, as the K-pop industry is currently at its best days and BTS is enjoying unprecedented success,” the source told Variety.

In 2019, Big Hit’s revenue doubled from the previous year to $494.6 million and reached profits of $82 million. That is bigger than the sum of the profits earned by the country’s top three talent management agencies — SM Entertainment, JYP Entertainment and YG Entertainment — in the same year.

At a recent briefing session held in Seoul, Big Hit unveiled that it would further expand and diversify its business model in 2020.

“We’ve become a multi-business label by acquiring Source Music (the label behind K-pop girl band GFRIEND) and setting up Belief+, a joint venture with CJ ENM,” said Bang Si-Hyuk, founder and co-CEO of the label, at the event. Belief+ plans to launch a multinational boy band this year, while a new girl band is set for a 2021 debut through a collaboration between Big Hit and Source Music.

However, industry insiders say that one of Big Hit Entertainment’s risks is its high level of reliance on BTS. A number of so-called “BTS-themed stocks” have recently experienced fluctuations: They rose when the K-pop king released a new album, and slumped when the band’s April concert in Seoul was cancelled this week due to coronavirus concerns.

“At this point, we still assume that Big Hit’s IPO is likely to happen this year,” Variety’s source said. “But because BTS is unquestionably the most important factor in the company’s financial potential, if coronavirus further slows not only BTS but also the entire K-pop industry, there is a possibility that [Big Hit] might postpone the plan.”