[Click eStock] "Ace Story expects a loss this year... Likely to rebound with new releases next year"

DB Financial Investment analyzed on the 3rd that Ace Story is expected to close the annual performance in the red, but its performance next year is anticipated. No separate investment opinion or target price was provided. Ace Story's closing price on the previous trading day was 8,160 KRW.

원본보기 아이콘

According to DB Financial Investment, Ace Story's 2024 annual performance is expected to record sales of 16.3 billion KRW (-71.3% YoY) and an operating loss of 400 million KRW. This represents a significant decline in both sales and profits compared to the previous year.

In 2024, there was no new drama production, and the revenue reflected in the performance was limited to overseas broadcasting rights and remake rights fees for "Crash." In particular, the reduction of drama broadcasting slots on domestic platforms had a direct impact.

Performance recovery is expected from 2025. From the first quarter, the drama "Idol-i" is scheduled to be reflected in the performance, and works planned for filming in the second half of the year include ▲ "By the River Where Evil Swarms" (OTT tentpole), ▲ "Cheolchangsal," ▲ "Lightning S Operation" (written by Park Jae-beom), and ▲ "Crash Season 2."

Assuming conservatively that only two works are reflected in the performance, sales in 2025 are expected to reach 60 billion KRW (+267.3% YoY), with operating profit turning positive at 7.2 billion KRW. The production costs of the main works are estimated to be over 20 billion KRW each, and the average operating profit margin is assumed based on the historically stable 12%.

Shin Eun-jung, a researcher at DB Financial Investment, stated, "From 2025 to 2026, remake rights revenue from 'Extraordinary Attorney Woo' and 'The Kidnapping Day' is expected to contribute to performance," adding, "'The Kidnapping Day' rights are expected to be exported to the UK, and 'Extraordinary Attorney Woo' to the US, Japan, Italy, and other countries." Although performance recovery is expected to be slow from the second half of 2024 to the first half of 2025, once the pending works are confirmed for scheduling, rapid recovery and growth are anticipated. Researcher Shin emphasized, "It is necessary to pay attention to the company's growth potential from a long-term perspective."

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.