[Click eStock] "Jcontentree, Possible Profit Turnaround in Second Half... Target Price Up"

[Asia Economy Reporter Song Hwajeong] NH Investment & Securities raised the target price of J Contentree from 60,000 KRW to 63,000 KRW on the 11th, expecting a possible turnaround to profitability in the second half of the year. The investment rating was maintained as 'Buy.'

Researcher Lee Hwajeong of NH Investment & Securities analyzed, "The broadcasting sector is expected to continue high growth, supported by a favorable business environment and the effect of acquiring a U.S. production company, while the film sector is entering a phase where performance recovery is becoming visible due to blockbuster theatrical releases and the vaccine effect."

It is forecasted that performance recovery will begin from the second quarter of this year. NH Investment & Securities expects J Contentree to record consolidated sales of 84.7 billion KRW, an 11% increase compared to the same period last year, and an operating loss of 5.2 billion KRW in the second quarter, in line with market consensus. Operating profit in the broadcasting sector is estimated to increase by 3% year-on-year to 9.4 billion KRW. The researcher said, "With no Monday-Tuesday dramas scheduled in the second quarter, new works include 'Law School,' 'Undercover,' and partially recognized 'Nevertheless' and 'Monthly House,' while the base effect burden from 'Itaewon Class' remains. However, high profitability is maintained through strong global sales following the first quarter, and a strong lineup with high global demand such as 'Gugyeongi' and 'Snowdrop' in the second half is expected to sustain good performance."

The theatrical sector is expected to continue operating losses of 14.6 billion KRW through the second quarter. Demand recovery is becoming visible, supported by the simultaneous online video service (OTT) release of 'Seobok' in April and the release of Hollywood blockbusters such as 'Fast & Furious 9' and 'Cruella' in May. The researcher explained, "With blockbuster releases continuing in the second half and the easing of social distancing due to vaccination, a clear normalization of operations is also expected."