[Click eStock] "NEW, Possibility of Restructuring Deficit Business through Physical Division of Theaters"

[Asia Economy Reporter Eunmo Koo] Ebest Investment & Securities analyzed that the physical spin-off of the screening theater division in NEW opens up the possibility of restructuring its deficit business.

On the 17th, Kim Hyunyong, a researcher at Ebest Investment & Securities, reported that NEW announced the physical spin-off of its screening theater business the day before. Researcher Kim said, “On the surface, the spin-off does not change NEW’s fundamentals, but considering that the screening theater business is a chronic deficit business, the underlying meaning can be interpreted positively. First, the deal structure for selling the deficit screening theater business has become simpler, and if a sale is difficult, it is judged that it will be easier to explore various long-term survival options such as attracting investment or asset securitization,” he explained.

It is expected that momentum will continue with ‘Oh My Baby’ in May, ‘Elegant Friends’ in June, and ‘Peninsula’ in July. Researcher Kim said, “Starting with the tvN Wednesday-Thursday drama Oh My Baby (starring Jang Nara), scheduled to air on the 6th of next month, followed by JTBC’s Elegant Friends (starring Yoo Junsang and Song Yoonah) in June, and Peninsula (Train to Busan 2) scheduled for the summer season in July to August,” adding, “The lineup, which had taken a break after the distribution of ‘Honest Candidate’ earlier this year, is expected to gain momentum from early May.” He continued, “In the second half of the year, it is expected that more than two movies, including ‘Hostage’ (starring Hwang Jungmin), and at least one additional drama will be produced and scheduled, so the performance pattern is expected to clearly show a strong start and a weaker finish.”

The investment opinion and target stock price were maintained at ‘Buy’ and 4,000 won, respectively. Researcher Kim explained, “From May through the second half of the year, at least five dramas and movies are scheduled, ensuring a recovery in performance, and in the case of Peninsula, the market situation is judged to have a higher possibility of a surprising hit due to the absence of competing Hollywood lineups.”