[Featured Stock] Studio Dragon Declines Amid Concerns Over Parent Company's OTT Competitiveness Weakening

Studio Dragon is showing weakness. The plan of its parent company CJ ENM, which aims to expand overseas through a merger with terrestrial online video services (OTT), has been hindered by SBS's withdrawal, which is interpreted as a negative factor affecting the stock price.

As of 2 PM on the 20th, Studio Dragon is trading at 38,450 KRW, down 1,200 KRW (3.03%) from the previous session.

Researchers Jinhae Ji and Jiyoung Kim from Shinhan Investment Corp. explained the background of Studio Dragon's weak stock price, stating, "Starting with the SBS-Netflix partnership, the media landscape is shifting from a broadcaster-producer cooperation structure to a broadcaster-overseas OTT cooperation structure from 2025 onward, making SBS a clear beneficiary and CJ ENM and Studio Dragon the victims."

CJ ENM, which was aiming to create an 'OTT giant' through the merger of TVING and Wavve, is currently facing a double burden of declining OTT competitiveness and the end of Naver bundling as the possibility of SBS's withdrawal, a major pillar of the merger, has emerged. Researchers Jinhae Ji and Jiyoung Kim said, "If the corporate value of TVING is damaged and CJ ENM's market capitalization falls, its subsidiary Studio Dragon will also face market capitalization pressure," and they slightly lowered the target stock price to 50,000 KRW.

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