[Click eStock] "Studio Dragon, Content Investment Reduction and Embezzlement... Target Price Down"

NH Investment & Securities announced on the 5th that it is lowering the target price for Studio Dragon from 100,000 won to 77,000 won, a 23% decrease. The investment rating remains 'Buy.'

Studio Dragon is estimated to have recorded sales of 138.4 billion won (consolidated basis) and an operating profit of 13.7 billion won in the second quarter. These figures represent decreases of 12% and 49%, respectively, compared to the same period last year, and are expected to fall short of market expectations. The number of drama broadcasts declined compared to both the same period last year and the previous quarter, and there were no sales from new online video service (OTT) old content packages.

However, the recovery rate of production costs (recoup rate) centered on TV-OTT simultaneous releases has improved due to the Netflix contract renewal, and profitability is being enhanced through the optimization of global sales channels, which is viewed positively.

Lee Hwajeong, a researcher at NH Investment & Securities, said, "Concerns such as the recent deterioration of the business environment and internal embezzlement incidents have already been reflected in the stock price," adding, "Given the low first half and strong second half performance momentum and expectations for broadcasts in China, the situation actually leaves only upside potential."

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