[Click eStock] "Studio Dragon to Recover Number of Productions Next Year"

Meritz Securities forecasted on the 8th that Studio Dragon will see a recovery in the number of productions and an increase in collaborative projects with major platforms in 2025. Accordingly, they maintained a target stock price of 54,000 KRW and a 'Buy' investment rating.

Jisoo Jeong, a researcher at Meritz Securities, stated in a report released that day, "Under the new CEO Kyung-ik Jang, who was newly appointed last August, the company plans to focus on improving its corporate structure, and we expect the results to appear from 2025." He added, "Furthermore, in 2025, alongside the recovery in the number of productions, global participation projects are expected to increase through collaborations with major platforms in the US, Japan, and other countries."

Studio Dragon's consolidated sales for the third quarter decreased by 58.5% year-on-year to 90.3 billion KRW, and the operating loss (-900 million KRW) significantly missed market consensus. The third-quarter lineup decreased by 16 productions compared to the previous year, and with a focus on small- and medium-sized works, the decline in sales relative to the number of aired episodes was substantial.

Researcher Jeong explained, "Although sales decreased, the burden of amortization expenses from large-scale productions such as Tears of the Queen and Sejak in the first half continued, resulting in a turnaround to an operating loss compared to the previous year."

He projected that consolidated sales for 2024 will decrease by 31.3% year-on-year to 517.6 billion KRW, and operating profit will decline by 52.5% to 26.6 billion KRW during the same period.

Researcher Jeong added, "With only 43 aired episodes in the fourth quarter, it is difficult to expect significant external growth and profitability improvement. Despite the overall shortage of productions, the company plans to focus on improving profitability through pre-sales secured by IP acquisition and regional sales."

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