[Click eStock] "CJ ENM Adds Captive Channels Through Investment in KT Studio Genie"

[Asia Economy Reporter Hwang Yoon-joo] Daishin Securities maintained a 'Buy' rating and a target price of 180,000 KRW on CJ ENM on the 22nd, stating that the decision to invest 100 billion KRW in KT Studio Genie will effectively create one more captive channel.

Kim Hoe-jae, a researcher at Daishin Securities, explained, "Through ENM, KT can acquire know-how in content production and maintain leadership as the number one in 5G penetration rate and average revenue per user (ARPU) among wireless subscribers by leveraging content, a killer service in the 5G era."

On the previous day, CJ ENM signed a memorandum of understanding (MOU) related to equity investment with KT Studio Genie. Through this, CJ ENM's produced content will be prioritized for use, and both CJ ENM and KT will expand cooperation in content business by strengthening the competitiveness of their channels and OTT platforms. Additionally, CJ ENM and KT Studio Genie plan to collaborate on joint content planning and production.

Researcher Kim said, "Although this MOU is in the form of ENM investing in KT, ultimately, platform integration between the two companies will proceed," and analyzed, "Half of ENM's performance comes from broadcasting, which inevitably grows centered on digital, so tving's expansion strategy is very important for ENM."

Kim also analyzed that "Content produced by ENM can be broadcast on KT Season, IPTV, Skylife, HCN, etc.," which is advantageous for subscriber expansion.

According to Daishin Securities' estimates, tving has 2.3 million subscribers, and Seezn has about 1 million. KT holds the largest subscriber base in Korea with 13 million subscribers.

Researcher Kim added, "tving, reborn at the end of 2020 through the merger of ENM and JTBC, is still operating at a loss, but subscribers are rapidly increasing," and said, "With KT's resources and subscribers combined, growth will accelerate." This year, tving's target is 4 to 5 million subscribers, and the 2023 target is 8 million. Kim added that achieving these targets upon integration seems feasible.

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