[Featured Stock] Chorokbaem, the Most Undervalued Production Company as Its Value Rises with Disney Plus Landing

[Asia Economy Reporter Hyungsoo Park] Chorokbaem is showing strong performance. Amid the OTT (Over-The-Top) video service boom, the valuation of small and medium-sized production companies is soaring, and it seems that the analysis that Chorokbaem has been the most neglected stock in the domestic stock market has influenced its stock price.

As of 10:59 a.m. on the 5th, Chorokbaem is trading at 2,410 KRW, up 5.01% from the previous trading day.

Jiin Hae, a researcher at Hanwha Investment & Securities, said, "Among the small and medium-sized production companies that have rapidly emerged since the end of last year, the most neglected stock is Chorokbaem," adding, "After soaring significantly as a BTS-related stock just before the Big Hit listing in September 2020, the stock price has rather declined."

He evaluated, "This year, they have laid the foundation for growth through the production of multiple dramas and rental income." He continued, "The total number of dramas produced this year is seven," and said, "This is more than the past annual average of 2.8 by Chorokbaem and also more than other small and medium-sized production companies."

Furthermore, he added, "With ratings close to a syndrome, profitability is estimated to be much higher than the average outsourcing production due to the high profits from ‘sponsorship + PPL,’ which is the pure outsourcing production company's share."

Securing intellectual property rights (IP) was also cited as an important factor. These include 'Youth,' which tells the story of BTS, and 'That Night,' starring actors Kim Soo-hyun and Cha Seung-won. He explained, "The production costs are about 40 billion KRW and 20 to 30 billion KRW respectively, and they are preparing for global OTT broadcasting in the second half of the year," adding, "Although it is understood that only part of the IP, not 100%, has been secured, it is meaningful in that they are attempting an IP strategy for the first time."

Disney+, the OTT of Walt Disney, known as the world's largest ‘content kingdom,’ is about to enter Korea. Following Netflix, with Disney+ entering the domestic market, the valuation of video content production companies is expected to rise.