[Click eStock] "Studio Dragon, Unfavorable Business Environment... Target Price Down"

On the 29th, Samsung Securities maintained its investment opinion of 'Buy' on Studio Dragon but lowered the target price from 96,000 KRW to 83,000 KRW.

Studio Dragon's second-quarter revenue is expected to be 140 billion KRW, with an operating profit of 11.9 billion KRW, falling short of the consensus estimate of 19.4 billion KRW. While global references continue to strengthen thanks to production competitiveness, the second quarter appears to struggle against a high base from the previous year and an unfavorable business environment.

The unfavorable business environment includes ▲ the number of aired episodes being 77, which is lower compared to the previous quarter (112 episodes) and the same quarter last year (107 episodes), with the previous year also having Friday-Saturday dramas in addition to weekend dramas ▲ difficulty overcoming amortization burdens carried over from the previous quarter due to the small scale ▲ a significantly high base effect from last year's second quarter when many older works, whose amortization had ended on global OTT platforms, were supplied at once, improving profitability ▲ low viewership ratings of works aired on TV channels during the quarter and the absence of ratings-linked performance due to sluggish broadcast advertising market conditions.

Minha Choi, a researcher at Samsung Securities, stated, "Studio Dragon has been delivering stable results through accumulated content references and channel diversification, but it is not free from the impact of a difficult external business environment. However, Studio Dragon has already confirmed the scheduling of seasonal works in the second half and the airing of major original content through OTT platforms. Simultaneous broadcasts based on volume deal contracts with Netflix and Disney Plus are expected to continue, which will further strengthen its position in the market."

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