[Click eStock] "Studio Dragon Receives 'Love Calls' Both Domestically and Internationally"

Various Actors, Writers, and Multiple IPs... Active Overseas Expansion
"A Production Company That Global Platforms Want to Collaborate With"

[Asia Economy Reporter Minwoo Lee] Studio Dragon, which has a diverse roster of actors and writers and a stable demand base, is being recognized as having a significant level of competitiveness globally. Analysts note that various growth opportunities remain, from U.S. platforms such as HBO and Apple to domestic platforms and expansion into the Chinese market.

On the 6th, Shinhan Financial Investment forecasted that Studio Dragon would achieve consolidated sales of 144.3 billion KRW and an operating profit of 10.1 billion KRW in the third quarter of this year. Compared to the same period last year, sales increased by 10.0%, but operating profit decreased by 7.4%. This relatively weaker performance compared to the previous quarter is because most of the top-tier drama titles desired by Netflix were sold in the first half of the year. However, the current consensus is that earnings are not the main issue at this point. Hong Se-jong, a researcher at Shinhan Financial Investment, explained, "Recently, Ace Story announced two contracts related to 'Jirisan,' co-produced with Studio Dragon (broadcast rights to CJ and overseas distribution rights to iQIYI)," adding, "This proves that demand for Korean Wave content is rapidly increasing in Southeast Asia as well."

Shinhan Financial Investment cited Studio Dragon's competitiveness as ▲ 226 actors (114 writers) ▲ nearly 30 productions annually ▲ a stable demand base in CJ ENM. Based on this, it is analyzed that economies of scale capable of systemized operation within the production industry are possible. Researcher Hong said, "The low dependency on specific actors and the ability to handle intellectual property (IP) across all genres are also key factors," and analyzed, "This is why both overseas and domestic platforms want to partner with Studio Dragon."

There are also abundant growth drivers ahead. One is securing original drama orders from U.S. regional platforms excluding Netflix. HBO, Apple, and Amazon are considered candidates. All of these are 'big spenders' investing trillions of won annually in content production. Collaboration with domestic platforms is also anticipated. Researcher Hong commented, "Telecom companies and internet service providers need the strength to compete against Netflix and YouTube, and Studio Dragon's capability to convert numerous IPs into video content is essential." Expectations are also rising for the opening of the Chinese market. If Chinese President Xi Jinping's visit to Korea is realized, the resumption of domestic video broadcasting is considered one of the most anticipated areas. Since it involves selling already produced dramas and is free from COVID-19 concerns, there is no worry about increased costs.

Against this backdrop, Shinhan Financial Investment selected Studio Dragon as the top pick in the media sector. They maintained a 'buy' rating and raised the target price by 9% to 120,000 KRW. The closing price the previous day was 84,300 KRW.

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