Studio Dragon Struggling Alone... Is a Stock Price Reversal Possible?

In the Past Year, Stocks Rose Around 2% While
Jcontentree Increased 64% and SBS 130%

Record Number of Releases Expected Next Year
Positive Outlook for Entry into the US Market

[Asia Economy Reporter Minji Lee] Despite the high interest in 'K-content,' Studio Dragon, the number one production company in Korea, seems to be lagging behind alone. It is said that its content works have been lackluster compared to other competitors, but expectations for a turnaround in performance are growing with the record-high number of productions planned for next year.

As of 9:54 AM on the 16th, Studio Dragon's stock price rose 1,600 KRW (1.87%) from the previous day to 87,100 KRW. It increased by 2.23% compared to 85,200 KRW a year ago, but this is a disappointing result compared to other content companies. Domestic competitors, content production companies J Contentree and SBS, rose 64% and 130% respectively over the past year. During the same period, the related index KRX Media & Entertainment Index rose 32.7%, showing the largest increase among all KRX thematic indices.

The reason Studio Dragon showed a sluggish trend alone was that there were no relatively notable works. Since the airing of the hit drama 'Vincenzo' on tvN in the first half of the year, there have been no major works generating buzz, and the number of broadcasts decreased due to the reduction of drama slots on OCN, a captive (affiliate) channel. The expectation for sales of works in the Chinese market, which had risen after selling two works in China in the third quarter of last year, also weakened. The operating profit estimate for this year, as projected by securities firms, dropped about 16% from 72.3 billion KRW at the beginning of the year to 60.5 billion KRW this month. Shin Su-yeon, a researcher at Shin Young Securities, analyzed, "The Chinese market is still highly uncertain as political issues take precedence over actual demand."

Although this year was sluggish, the outlook for next year is not bad. First, the number of productions (including OTT) is expected to expand from about 25 this year to more than 30 next year. So far, eight OTT sales have been confirmed, including Netflix originals such as 'Juvenile Justice' and 'Sweet Home S2,' and it is expected to set a record for the highest number of productions ever with the announcement of additional works.

It is also a positive factor that Studio Dragon has started producing the Hollywood drama 'The Big Door Prize' together with Apple TV and Skydance. Hyunji Lee, a researcher at Eugene Investment & Securities, said, "The production cost per episode of American dramas is up to 10 times higher than that of domestic dramas, so the contribution to performance will be significant," adding, "It is positive in the long term as it opened the door to the U.S. market and laid the foundation for cooperation."

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