Top Gun's Box Office Success Brings Warm Breeze to Theaters... Related Stocks Also Stir

[Image source=Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] Movie-related entertainment stocks, which struggled for a long time due to the COVID-19 pandemic, are gaining attention. Starting with 'Crime City 2,' which attracted over 10 million viewers, followed by the box office success of 'Top Gun: Maverick,' audiences have been flocking to theaters. In the second half of the year, Hollywood blockbusters such as 'Thor: Love and Thunder,' 'Black Panther 2,' and 'Avatar 2' are scheduled to be released consecutively, leading to forecasts that the breakeven point will be surpassed this year.

Lotte Shopping is a representative example. The distributor of Top Gun is Lotte Entertainment (Lotte Cultureworks), a subsidiary of Lotte Shopping. Lotte Shopping's stock price has risen more than 30% this year alone, with expectations of a return to profitability due to the normalization of operations in its major business divisions. In particular, the profit and loss improvement of Lotte Cinema following the release of major titles like 'Top Gun: Maverick' is also positive.

Joo Young-hoon, a researcher at NH Investment & Securities, said, "The profit and loss improvement of Lotte Cultureworks, which was the most affected by COVID-19, is also positive," adding, "Since indoor multi-use facility dining was permitted from April 25, it is expected to return to profitability in June."

NH Investment & Securities raised Lotte Shopping's target stock price by 45% from the previous 100,000 won to 145,000 won.

Park Jong-dae, a researcher at Hana Securities, also analyzed, "Due to the increase in viewers following the easing of social distancing, Lotte Cultureworks is expected to reduce its operating loss by more than 20 billion won compared to the same period last year."

CJ CGV, the only company operating IMAX theaters domestically, is also considered a beneficiary of Top Gun. Starting with 'Crime City 2,' released on May 18, and continuing with 'Top Gun: Maverick,' which attracted a cumulative audience of 3.84 million, CJ CGV has maintained audience momentum. CJ CGV recorded 14.55 million viewers in May and 15.47 million in June, recovering to 80.6% and 67.7%, respectively, compared to the same months in 2019 before the COVID-19 pandemic. The total number of viewers in the second quarter of this year reached 33.14 million. Additionally, the implementation of premium ticket pricing policies and the easing of social distancing allowing in-theater dining have contributed to significant profitability improvements, including increased concession revenues.

Lee Hwan-wook, a researcher at IBK Investment & Securities, said, "CJ CGV's consolidated sales for the second quarter of this year are expected to be 308.6 billion won, a 90.2% increase compared to the same period last year," adding, "With Hollywood blockbusters such as 'Thor: Love and Thunder,' 'Black Panther 2,' and 'Avatar 2' scheduled for release in the second half of the year, a clear recovery in audience numbers is anticipated."

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