[Click eStock] Studio Dragon Stronger This Year... Expecting Diversification of Revenue Channels

[Asia Economy Reporter Myunghwan Lee] Samsung Securities announced on the 11th that it maintains a buy rating and a target price of 135,000 KRW for Studio Dragon, expecting the company to continue its profitability improvement trend through the production and supply of numerous content.

Studio Dragon's sales in the fourth quarter of last year were 147.9 billion KRW, with an operating profit of 6.3 billion KRW. Although sales increased by 7.4% and operating profit by 37.6% compared to the previous year, Samsung Securities analyzed that these figures fell short of market expectations. Minha Choi, a researcher at Samsung Securities, stated, "The absence of original content from the online video service (OTT) Netflix and relatively fewer simultaneous broadcasts caused sales to decline by 7.5% year-on-year," but added, "By airing two originals for TVING and one original for iQIYI, they minimized the contraction and performed well."

Samsung Securities expects growth this year as Studio Dragon increases the number of broadcasts by supplying works to various OTT platforms. The number of broadcasts projected by Samsung Securities for Studio Dragon this year is 32, an increase of 7 from last year. In particular, they plan to diversify revenue channels by supplying multiple works to various OTTs such as Netflix (2 works), TVING originals (6 works), and Apple TV+ (1 work). Researcher Choi predicted, "The number of OTT originals will expand to more than 13, generating stable results."

Samsung Securities also evaluated positively the increase in the number of productions with larger scales compared to last year, which is expected to benefit profitability. Researcher Choi assessed, "The scheduling sales and distribution sales, which shrank by -18.1% and -1.5% respectively last year, will stretch again with the increase in production volume and OTT supply, leading to external growth."

He forecasted, "Studio Dragon will open the door to sales growth and continue its profitability improvement trend through content production and supply to TV channels and multiple OTT platforms."

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