[Click eStock] KT's 175 Billion Won Paid-in Capital Increase in Studio Geni Seen as a 'Positive Factor'

[Asia Economy Reporter Lee Seon-ae] An analysis has emerged that KT's plan to proceed with a paid-in capital increase of 175 billion KRW in Studio Genie will act as a positive factor for KT's stock price.

On the 23rd, Choi Nam-gon, a researcher at Yuanta Securities, said, "Unlike the relationships between SK Innovation-SK Battery, LG Chem-LG Energy Solution, and SK Chemicals-SK Bioscience, there are hardly any investors buying KT stock by focusing on the value of Studio Genie," adding, "Therefore, rather than the subsidiary's listing being detrimental to the stock price, it is expected to be a good opportunity to remind investors of the unique investment point of drama production and distribution."

KT is pushing for a paid-in capital increase of 175 billion KRW in Studio Genie, through which the capital will expand from 52.8 billion KRW to 227.8 billion KRW. Studio Genie plans to produce 6 dramas in 2021, 15 in 2022, and 20 in 2023. The goal is to build an IP library of 1,000 titles by 2025. Under Studio Genie, subsidiaries such as Season (100%), Genie (36%), Storywiz (100%), SkyTV (22%), and Hyundai Media (100%) have been established. Going forward, Studio Genie will be responsible for drama production, while Season, Hyundai Media, SkyTV, and KT will share the role of drama distribution. In other words, KT aims to establish a media business system similar to the relationship between CJ Group's Studio Dragon and TVN, TVING. Once a certain record of drama production is accumulated, it is naturally expected that Studio Genie will proceed with an initial public offering (IPO).

Researcher Choi emphasized, "The split is expected to be a successful card used this year to increase the corporate value of the Korean telecommunications industry," adding, "The KT split will serve as a good means to raise the overall corporate value by drawing investors' attention to each growth business buried in the massive telecommunications industry."