[Click eStock] "Jcontentree, Megabox Firmly Supports"

Daishin Securities "Maintains Jay Contentree Target Price at 58,000 Won"
Megabox Acts as Jay Contentree's Cash Cow... High Growth Possible Through JTBC Studio

[Asia Economy Reporter Gong Byung-sun] An analysis has emerged that Megabox, a subsidiary of JTBC Contentree, will serve as a stable cash cow. This is due to the expectation that the number of viewers will recover as new movie releases continue to appear. Accordingly, Daishin Securities maintained a target price of 58,000 KRW and a 'Buy' investment rating for JTBC Contentree.

According to Daishin Securities on the 26th, Megabox's low direct management ratio is seen as an opportunity for growth. Since JTBC Contentree's acquisition in 2015, Megabox's direct management ratio increased from 35% to 48%, but it still lags behind CJ CGV's 66% and Lotte Cinema's 75%. Kim Hee-jae, a researcher at Daishin Securities, explained, "Directly managed stores recognize both sales and costs by Megabox, while consignment stores only recognize commissions, and 98% of ticket sales occur at directly managed stores," adding, "Converting consignment stores to direct management is an opportunity to expand the business without site competition."

Based on past performance, a recovery in audience numbers is also expected. Megabox achieved its best performance in 2019, before the outbreak of COVID-19. In 2019, Megabox's sales rose 11% year-on-year to 330 billion KRW, and operating profit increased by 81% to 39 billion KRW. The operating profit margin returned to the 10% range after four years, reaching 11.7%.

It has also succeeded in external growth and has potential for further increase. Since 2015, out of 105 theaters, 50 are directly managed stores, an increase of 26 during the same period. In particular, it adopted a strategy of collaborating with Shinsegae to open stores in Shinsegae Department Store and Starfield. Among the 26 newly opened direct management stores, 12 have large theaters with over 1,000 seats.

Therefore, expectations arise that Megabox will serve as a cash cow for JTBC Contentree. Researcher Kim said, "With the appearance of new movie releases, the number of viewers will recover, and Megabox will normalize, playing a stable cash cow role," adding, "It is expected to achieve high growth through JTBC Studio."

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