[Click eStock] Skylife Smiles at the ‘Strange Lawyer Woo Young-woo’ Syndrome

Daishin Securities Report

[Asia Economy Reporter Minji Lee] Daishin Securities maintained its buy rating and target price of 15,000 won for Skylife on the 13th. This is based on the analysis that the broadcasting company ENA, which is reflected in the consolidated results, is benefiting from the airing of "Extraordinary Attorney Woo" (hereafter Woo Young-woo), raising expectations for improved performance.

Skylife is expected to fully enjoy the effects of "Woo Young-woo." Skylife has a subsidiary, SkyTV, and operates a total of seven channels including ENA, where "Woo Young-woo" is being aired. The viewership rating of "Woo Young-woo" rose from 0.9% in the first episode to 5.2% by the fourth episode. Researcher Kim Hoe-jae said, “Considering that ENA’s average viewership rating is below 1%, a 5% rating on ENA is more than five times the average and comparable to a 50% rating on terrestrial channels.”

Advertising rates on ENA are significantly increasing due to "Woo Young-woo." This effect is expected to be fully reflected in the third quarter, with further impact in the fourth quarter and next year. It is anticipated to contribute 5% to next year’s consolidated sales and over 10% to operating profit.

This year, ENA plans to showcase 10 dramas including "No Goo Pil-soo," "Woo Young-woo," "Good Job," "Eoljuka Yeonae Ddawi" (literally "Damn Dating"), and "Unlock the CEO." Next year, the number will expand to 15. It is important to note that KT Studio Genie plans and produces the dramas, SkyTV plans and produces the variety shows, but most of the broadcasts are mainly on ENA.

Kim Hoe-jae, a researcher at Daishin Securities, analyzed, “As ENA’s recognition rises and funding for SkyTV progresses, the scope of SkyTV’s production will expand, and Sky’s status in KT Group’s media business will be further strengthened.”

Meanwhile, in the second quarter, Skylife is expected to record sales of 18 million won and operating profit of 2.24 million won, increasing by 10% and 16% respectively compared to the same period last year. The number of TV subscribers decreased by 34,000 in the second quarter following a decrease in the first quarter, totaling 3.78 million subscribers. However, considering that the quarterly average decrease was 48,000 last year, the decline has slowed. SkyTV’s standalone products saw a net increase of 21,000 subscribers in the second quarter, following a 21,000 increase in the first quarter.

Internet and mobile subscribers continued to increase, reaching 337,000 and 205,000 respectively. The average revenue per user (ARPU) is estimated to have increased by 2.9% year-on-year to 6,500 won. Since entering an upward trend with a 1.3% increase in the third quarter of 2019, it has continued to rise steadily.

Researcher Kim Hoe-jae said, “In the case of bundled products with KT (OTS), profit contribution is low, so the number is decreasing, but standalone products are becoming more profitable. The UHD proportion at 44% is also positive as it contributes to the increase in revenue per subscriber.”

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