[Click e-Stock] "CJ ENM to Defend Q4 Earnings Led by Subsidiaries"

On October 2, DB Securities commented on CJ ENM, stating that while the company's sluggish TV advertising revenue is disappointing, the stabilization of earnings at Fifth Season and Tving is a positive sign. The firm projected that CJ ENM would be able to defend its earnings in the fourth quarter as well. DB Securities maintained its "Buy" investment rating and its target price of 89,000 won.

CJ ENM's third-quarter 2025 revenue is estimated at 1.2841 trillion won (up 14.2% year-on-year), with operating profit at 30.4 billion won (up 92.1%), both falling short of market expectations. Shin Eunjeong, a researcher at DB Securities, explained, "TV advertising revenue is expected to see negative growth of 10% year-on-year due to the continued slump in the domestic TV advertising market." She added, "Despite the popularity of KBO, Tving is expected to post an operating loss in the 10 billion won range, as it has not been able to overcome the decline in subscribers caused by the discontinuation of the Naver membership partnership." However, Fifth Season is expected to achieve operating profit by supplying 10 drama series and 2 films, while the music division is projected to record profit in the 1 billion won range, although some concerts by certain artists have been scaled back.

In the fourth quarter, earnings defense is expected to be led by Fifth Season and Studio Dragon. Shin noted, "Tving will release original content such as Transit Love 4 and Dear X in the fourth quarter and will also expand its partnership with SK Telecom's mobile plans. However, the number of subscribers leaving the platform is expected to increase further after the KBO season ends," estimating an operating loss in the 15 billion won range.

Shin added, "The film No Other Choice appears to have already surpassed its break-even point through overseas distribution rights sales. Fifth Season is also expected to post operating profit by stably supplying one to two drama series, while the music division is projected to deliver 54.4 billion won in operating profit, reflecting the ZEROBASEONE world tour and IZNA concerts." She recommended a trading approach as earnings are confirmed, and highlighted, "The exclusive audition program for Chinese trainees will begin in December, and the fact that access to the Chinese market is possible even without the lifting of the Korean Wave ban is a positive factor."

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