[Click eStock] "CJ ENM, Impact of COVID-19 on All Sectors in Q1"

DB Financial Investment Issues 'Buy' Rating and 150,000 KRW Target Price... Closing Price on 24th at 91,100 KRW

[Asia Economy Reporter Kum Bo-ryeong] CJ ENM is analyzed to be affected by the novel coronavirus disease (COVID-19) in all sectors in the first quarter.

According to DB Financial Investment on the 25th, CJ ENM's first-quarter performance this year is estimated at sales of 830.2 billion KRW and operating profit of 54.9 billion KRW, which are decreases of 3.5% and 30.6% respectively compared to the previous year.

It appears that all sectors will be impacted by COVID-19. Shin Eun-jung, a researcher at DB Financial Investment, explained, "The negative impact of COVID-19 in the media sector is expected to be sluggish TV advertising. There are also benefits, such as increased YouTube viewing time by 'homebodies,' growth in paid subscribers of Tving, and increased sales of content and video on demand (VOD)." However, she added, "Since TV advertising accounts for a large portion, media sales are expected to grow by only 4.3% compared to last year."

The music sector is expected to see a 6% decrease in sales compared to the previous year and an operating loss. Although IZ*ONE made a comeback, activities such as concerts are difficult. This applies to other artists as well.

Despite overseas screenings of "Baekdusan" and "Parasite" in January, the film industry took a direct hit. A deficit of approximately 2 billion KRW is expected.

Researcher Shin said, "Due to the sluggish performance in the media, film, and music sectors in the first half of the year, the full-year operating profit forecast has been lowered by 14.4% from the previous estimate. Although there is a negative impact on first-half performance, the nearly 40% stock price decline since January 20th is excessive." She added, "The value of holdings in Studio Dragon and Netmarble alone is 3 trillion KRW, and considering Studio Dragon's media sector performance consolidation, Netmarble's stake alone is worth 1.7 trillion KRW. We maintain a 'buy' investment opinion." The target stock price was set at 150,000 KRW. The closing price on the 24th was 91,100 KRW.

This content was produced with the assistance of AI translation services.