[Click eStock] "NEW, Balanced Profit Contribution from Movies, Dramas, and Sports"

[Asia Economy Reporter Eunmo Koo] Ebest Investment & Securities stated that NEW showed balanced profit contributions from movies, dramas, and sports in the fourth quarter of last year, and it is expected to continue this positive trend this year.

NEW recorded sales of 58.6 billion KRW in the fourth quarter of last year, a 31.4% increase compared to the same period the previous year, and an operating profit of 3 billion KRW, turning to black. Researcher Hyunyong Kim of Ebest Investment & Securities explained in a report on the 19th, “The sharp increase in sales was mainly due to the fourth-quarter releases ‘The Most Ordinary Romance’ and ‘Start-Up,’ each attracting 3 million viewers, and the effect of ‘Chief of Staff Season 2’ along with the full-scale launch of the Bravo&New business, which led to balanced growth contributions from key subsidiaries.” He added, “The turnaround to profitability was due to all quarterly releases surpassing the break-even point, and at the subsidiary level, income from intellectual property (IP) rights and the continued profitability of Bravo&New were effective.”

This year, it is expected that at least six dramas including ‘Oh My Baby,’ ‘Elegant Friends,’ ‘Delayed Justice,’ ‘Moving,’ ‘Giggukoi,’ and ‘Hash’s New Road’ will be produced and aired. The follow-up work of Judge Muyeoseok and writer Im Maeri is also targeted for production in the first half of this year. Additionally, Researcher Kim forecasted, “With Studio&New’s CPS funding of around 30 billion KRW completed, aggressive expansion of production capacity and negotiation advantages with platform operators can be expected this year.”

The movie sector is also expected to perform well in the first quarter, with two dramas lined up for the second quarter. Researcher Kim evaluated, “Although the box office market is showing severe stagnation, NEW’s February release ‘Honest Candidate’ attracted 1.1 million viewers as of yesterday, and it is expected to easily reach the break-even point of 1.5 million viewers. The March release ‘Call,’ starring Park Shin-hye, faces little competition and the market is likely to recover, so strong performance is anticipated.”

Furthermore, around May, tvN’s ‘Oh My Baby’ (starring Jang Nara) and JTBC’s ‘Elegant Friends’ (starring Yoo Junsang and Song Yoonah) will be aired, and momentum is expected to continue with the release of ‘Train to Busan 2’ in July.

The investment opinion and target stock price were maintained at ‘Buy’ and 6,000 KRW, respectively. Researcher Kim explained, “Expectations for an annual turnaround to profitability have increased, and there are many factors for a performance turnaround, including the reflection of settlement profits from Start-Up in the first half of this year and the airing of two dramas.”