[Click eStock] Contentsree Joongang, Expected Improvement in Q2 Film Division Performance

Annual Performance Outlook Down
Target Stock Price Cut by 17%

On the 9th, KB Securities maintained a buy rating on Contentsree Joongang and lowered the target price by 17% to 29,000 KRW. This is because the company is expected to record an operating loss this year due to sluggish performance in both the broadcasting and film sectors.

In the first quarter, the company posted sales of 198.1 billion KRW and an operating loss of 32 billion KRW. The operating loss continued, similar to the first quarter of last year, falling short of market expectations. This was due to poor performance in both the film and broadcasting sectors.

In the broadcasting sector, captive scheduling was one episode per week, with a total of 36 episodes aired, a decrease of 14 episodes compared to the previous quarter, resulting in an operating loss of 19 billion KRW. In the film sector, due to the overall sluggishness of the theater industry, the number of moviegoers was only 25.15 million compared to the previous quarter, resulting in an operating loss of 10.6 billion KRW. KB Securities researcher Choi Yong-hyun explained, “While investment and distribution performance, which had been recognized as net sales, were recognized as gross sales, expanding investment and distribution sales and costs, there was no change in operating profit standards.”

In the second quarter, sales are expected to be 241.6 billion KRW, and an operating loss of 10.8 billion KRW is forecasted, indicating that the deficit will continue. In the broadcasting sector, captive episodes are expected to increase by 4 episodes compared to the previous quarter, with 40 episodes scheduled to air, and one piece of content is expected to be aired by the overseas subsidiary Wiip, resulting in an expected growth of 29.1% compared to the previous quarter. In terms of profitability in the broadcasting sector, all works will be simultaneously aired on OTT platforms, and an operating loss of 16.7 billion KRW is expected, indicating a reduction in the deficit.

In the film sector, the number of theatergoers is expected to reach 36.46 million, with sales of 83.1 billion KRW and an operating profit of 4.4 billion KRW, representing increases of 39% and 0.4%, respectively, compared to the same period last year. Researcher Choi Yong-hyun analyzed, “In the second quarter, films are expected to enter the peak season and record a profit,” adding, “Although the recent domestic box office has shown a rebound centered on foreign films, it is noteworthy that theater demand has returned.”

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