[Click eStock] "Studio Dragon, Overseas Expectations Shine"

Shinyoung Securities Issues 'Buy' Investment Opinion and Sets Target Price at 115,000 Won... Closing Price on 1st is 81,000 Won

[Asia Economy Reporter Kum Boryeong] As overseas expectations for Studio Dragon rise, Shin Young Securities on the 2nd issued a 'Buy' investment rating with a target price of 115,000 KRW. The closing price on the 1st was 81,000 KRW.

According to Shin Young Securities on that day, Studio Dragon's expectations shine more overseas than domestically.

Domestically, due to the spread of the novel coronavirus infection (COVID-19) centered in the metropolitan area, all filming was suspended from the 24th to the 31st of last month. The tvN Wednesday-Thursday drama "Flower of Evil" plans to replace the 12th episode scheduled to air on the 3rd with a special broadcast.

Additionally, third-quarter programming sales are judged to inevitably decrease compared to the same period last year. Although the sales per episode are on the rise, the overall number of productions has decreased due to channel efficiency improvements within CJ ENM affiliates. The number of productions in the third quarter is expected to be 5.9 episodes, down 20.6% from the same period last year based on the number of aired episodes.

Analysis suggests that Studio Dragon's long-term growth engine lies in overseas sales. Shin Suyeon, a researcher at Shin Young Securities, said, "For Netflix, a major existing client, since February this year, the top 10 rankings by country have been disclosed, allowing confirmation of Studio Dragon's production competitiveness. With content production and distribution contracts signed with CJ ENM and Netflix for three years starting this year, relatively stable sales to Netflix are expected. In the fourth quarter, the Netflix original content 'Sweet Home' (10 episodes) is scheduled to air."

In China, not only is there anticipation for sales of older works, but concrete discussions are underway regarding drama production with Chinese online video service (OTT) platforms, which is a positive situation. Researcher Shin analyzed, "Although the lifting of the 'Hanhanryeong' (Korean Wave ban) remains uncertain, drama production with OTT platforms is relatively visible in sales because it can be broadcast outside China, including Southeast Asia."

Furthermore, Researcher Shin added, "Studio Dragon established a local subsidiary in the United States this year with the ultimate goal of building its own production capabilities in the U.S. Over the next 2-3 years, it plans to collaborate with U.S. production companies based on about 10 intellectual properties (IPs) and is simultaneously securing local U.S. creators. The produced works are expected to be scheduled on U.S. broadcasters and OTT platforms."

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