[Click eStock] "Jcontentree, Absolute Leader in Domestic Content... Target Price Up 20%"

Shinhan Financial Investment Report

[Asia Economy Reporter Minji Lee] Shinhan Financial Investment maintained a buy rating on J Contentree on the 22nd and raised the target price by 20% from the previous level to 53,000 KRW.

Consolidated sales for the first quarter are expected to decrease by 17% year-on-year to 85.5 billion KRW. Operating losses are forecasted to narrow to 7.9 billion KRW. Broadcasting operating profit is expected to turn positive at 3.8 billion KRW. Sejong Hong, a researcher at Shinhan Financial Investment, stated, “This reflects the relative underperformance of major works including the flagship drama 'Sisyphus.'” He added, “Overseas distribution sales are expected to show steady growth.”

Although the number of moviegoers nationwide is expected to decrease by 68%, efforts to improve cost efficiency are likely to result in better-than-expected performance. The average ticket price is also on the rise, and operating losses are projected to shrink to 11.2 billion KRW.

The corporate value of J Contentree is expected to increase further. Researcher Hong said, “Along with Studio Dragon, it is the undisputed absolute leader in domestic content,” explaining, “It is overwhelming in terms of the number of productions per year, available broadcasting channels, scale of copyright sales to overseas platforms, and financial strength.”

With intensified competition in the global online video service (OTT) industry, video demand is expected to increase further. J Contentree continues extensive negotiations with global platforms for original productions and license-outs, and it is expected that exclusive contracts to supply several dramas annually to JTBC are also quite possible.

Researcher Hong said, “In such cases, the profit increase effect can be maximized,” adding, “For global platforms desperate for Asian content, partners capable of supplying large volumes of videos like Studio Dragon will be essential to OTT companies.”

He continued, “Considering the broadcasting sector, which is expected to generate 30 billion KRW in annual operating profit, the movie theater industry that has passed its worst phase, and momentum in the Chinese market, a rise in stock price is anticipated.”

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