[Click eStock] "Studio Dragon to Air Blockbuster in Q2... Expecting Earnings Improvement"

KB Securities Issues 'Buy' Investment Opinion and Sets Target Price at 97,000 KRW... Closing Price on 27th at 75,700 KRW

[Asia Economy Reporter Kum Bo-ryeong] An analysis has been raised that Studio Dragon's performance will improve from the second quarter.

According to KB Securities on the 30th, Studio Dragon's first-quarter performance is estimated at 117.5 billion KRW in sales and 11.1 billion KRW in operating profit. Compared to the previous year, sales increased by 5.1%, and operating profit turned positive. Lee Dong-ryun, a researcher at KB Securities, explained, "Although drama screenings in the first quarter decreased compared to the same period last year, the viewership ratings of major content including 'Crash Landing on You' were favorable, and sales to Netflix expanded, resulting in a solid performance."

From the second quarter, performance improvement is expected as blockbuster content will be aired sequentially. In the second quarter, the airing of writer Kim Eun-sook's 'The King: Eternal Monarch' is scheduled. Writer Kim Eun-sook has written many tentpole dramas such as 'Goblin' and 'Mr. Sunshine,' raising high expectations for success. The researcher said, "Considering the expansion of sales margins to Netflix, performance improvement is expected from the second quarter," adding, "Operating profit in the second quarter is forecasted to increase by 76.6% year-on-year to 19.1 billion KRW, and considering that operating profit was 21.5 billion KRW in the third quarter of 2018 when 'Goblin' aired, this level seems fully achievable."

KB Securities gave a 'Buy' investment opinion on Studio Dragon. However, the target price was lowered by 3% to 97,000 KRW from the previous level. The closing price on the 27th was 75,700 KRW. The researcher explained, "The target price downgrade is due to the delay in overseas sales expansion compared to previous expectations, leading to a 4.0% and 7.2% downward revision of this year's sales and controlling shareholder net profit estimates, respectively," and analyzed, "Thanks to the increase in content consumption due to the spread of the novel coronavirus infection (COVID-19), Studio Dragon's content production competitiveness will continue to be highlighted."

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