[Click eStock] "Studio Dragon, 'Sweet Home' Driven Success to Continue Next Year"

Netflix Original Content Sweet Home's Box Office Success
Vincenzo, Melmang, Island and Other Major New Releases Lined Up for Next Year
Intensified Competition Among OTT Platforms for Content Acquisition Also a Boon

[Asia Economy Reporter Minwoo Lee] Studio Dragon's recent Netflix release, "Sweet Home," is gaining popularity worldwide. This has reinforced its position as a content powerhouse, leading to expectations of improved performance through a new wave of releases in 2021.

On the 28th, DB Financial Investment maintained Studio Dragon as the 'Top Pick' within the content sector and kept the target stock price at 108,000 KRW. The previous closing price was 89,100 KRW. Although poor viewership ratings and uncertainties surrounding major productions after "Arthdal Chronicles" negatively affected the stock price earlier this year, it is analyzed that "Sweet Home" has reestablished Studio Dragon's strong position in content.

"Sweet Home," a Netflix original content based on Naver Webtoon, ranked 4th in the global daily rankings since its release on the 18th. It ranked within the top 10 in 56 countries and secured 1st place in 10 countries. Shin Eun-jung, a researcher at DB Financial Investment, said, "Typically, Korean works always rank high in the Asian region, but it is positive that it also ranked high in the Americas and Europe." She added, "Since it is an original work, the content's success will not have a short-term impact on earnings beyond the existing margin, but it is judged to have secured a favorable position for long-term season expansions, future global references, and production negotiations."

DB Financial Investment forecasts that Studio Dragon will achieve sales of 137.7 billion KRW and an operating profit of 11.9 billion KRW in the fourth quarter of this year. Sales are expected to increase by 41.3% year-on-year, and operating losses are expected to turn into profits. Similar to the third quarter, these figures do not include sales of broadcasting rights to China. In the fourth quarter, shows such as "Tale of the Nine Tailed," "Start-Up," "Mr. Queen (6 episodes)," "True Beauty (8 episodes)," "The Uncanny Counter (8 episodes)," and "Awaken (10 episodes)" aired, and domestic scheduling sales as well as some global sales including Netflix are expected to be reflected. "Sweet Home" is also estimated to have a production cost of about 3 billion KRW per episode (10 episodes) with a margin rate of around 20%.

With the recent increase in content demand, Studio Dragon's position and performance are expected to improve further. Next year, "Vincenzo," "Doom at Your Service," and "Island," among other tentpole projects involving famous directors, actors, and large-scale investments, are scheduled. Researcher Shin predicted, "Due to the recent increase in content demand, platforms such as iQIYI, Disney+, Apple TV+, Coupang Play, TVING, and Wavve are actively investing in securing content, so next year, the benefits for domestic content producers including Studio Dragon will become more visible."

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