[Click eStock] "CJ CGV Set to Evolve Beyond Films Into a Content Platform Business"

On November 26, DS Investment & Securities assessed that CJ CGV is expected to evolve beyond a simple movie theater operator into a business that distributes and produces a variety of content through its platform. The investment opinion was set at 'Buy' with a target price of 8,000 won.

As domestic box office growth continues to stagnate, major cinema operators are reducing fixed costs by closing low-profit locations. CJ CGV has also closed 12 underperforming theaters this year alone.

Jang Ji-hye, a researcher at DS Investment & Securities, stated, "The reduction in fixed costs resulting from CJ CGV's downsizing of inefficient domestic locations will be fully reflected from 2026, contributing to earnings growth." She estimated next year's consolidated revenue at 2.3 trillion won (up 5% year-on-year) and operating profit at 133.3 billion won (up 144%).

CJ CGV operates multiplexes in five countries: South Korea, China, Vietnam, Indonesia, and Turkiye. In addition, it has business divisions such as 4DPLEX (technology-specialized theaters/content platform) and Olive Networks (ONS, IT services).

Jang observed, "Overseas, growth is centered on Vietnam and Indonesia, while profitability improvements are expected in China and Turkiye through lease structure improvements and fixed cost efficiency." She further noted, "Demand for special theaters is increasing as audiences enjoy a variety of content such as performances and sports in addition to films. Investments in premium auditoriums by global multiplex operators are also rising, and the operational infrastructure of 4DPLEX will continue to expand."

She added, "The company is currently negotiating major deals with global leading theater chains, and performance is expected to be boosted by the production and screening of original content optimized for related formats, leading to a leverage effect." She explained, "Accordingly, the number of 4DX and ScreenX auditoriums operated by the company is expected to increase from 1,217 in the third quarter of this year to over 1,775 by 2027, with plans to achieve annual revenue of over 740 billion won by 2030."

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