[Click e-Stock] "Studio Dragon to Improve Margins Next Year with More Titles and Distribution Channels"

On October 24, Daishin Securities maintained its "Buy" investment rating and a target price of 64,000 won for Studio Dragon, stating, "The number of titles next year is expected to increase to more than 25, and with diversification across channels such as expansion into the United States and Japan and production for terrestrial broadcasters, profitability improvement is anticipated."

Kim Hoejae, a researcher at Daishin Securities, explained, "While the performance of both domestic and overseas titles has been proven in terms of viewership and recognition, the current share price does not yet reflect this."

Studio Dragon is expected to continue its active production this year, presenting 22 titles. Domestic performance remains solid. Although viewership ratings were somewhat sluggish early in the year, there was a clear rebound from the second quarter, with an annual average of 5.9%. In particular, the third-quarter drama "The Tyrant's Chef" finished successfully with a viewership rating of 17.1%, and the Monday-Tuesday drama "Mr. Shin's Project" is also receiving favorable responses with a high rating of 8.1%.

Overseas performance is also being demonstrated. Studio Dragon entered the Japanese market for the first time this year, and "Marry My Husband" topped Amazon Prime in Japan, receiving a positive local response. In addition, through collaboration with Paramount Skydance, the company is working on about 20 projects in the United States, and additional series orders are expected within this year.

The financial outlook is also positive. Cost-efficiency efforts that began in the second half of 2024 are expected to take full effect from the second half of this year, leading to improved operating profit margin (OPM). The expected OPM is projected to rise from 6.1% in 2025 to 8.2% in 2026, and to 11.5% in 2027, stabilizing above the 10% level. Accordingly, the dividend payout ratio is also expected to gradually increase to around 20% starting in 2027.

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