Soaring K-Content Boosts Stock Prices

[Asia Economy Reporter Song Hwajeong] While the stock market is showing a sluggish trend within a box range, the stock prices of content-related stocks, including entertainment stocks, are continuously hitting new highs and showing strong performance. The global success of "Ojingeo Game" (Squid Game) has increased interest in K-content, and expectations for the resumption of concerts in the fourth quarter are interpreted as having a positive impact on stock prices.

According to the Korea Exchange on the 28th, the KRX Media & Entertainment Index has risen 12.49% since the beginning of this month, recording the highest increase among KRX indices. During this period, the KOSPI fell by 1.14%.

Media and entertainment stocks have recently continued their streak of hitting new highs. As of 9:30 AM on the day, Jcontentree was traded at 69,100 KRW, up 700 KRW (1.02%) from the previous day. During the session, it rose to 71,700 KRW, rewriting its 52-week high in just one day. On the previous day, HYBE, JYP Ent., SM, and YG Entertainment also hit new highs in succession. HYBE rose to 349,500 KRW, approaching the 350,000 KRW mark, and due to the recent continued strength, SM reached 70,000 KRW, YG Entertainment 80,000 KRW, and JYP Ent. 50,000 KRW. SM rose 20.09%, YG Entertainment 15.7%, and JYP Ent. 25.67% since the beginning of this month.

As Korean contents such as Ojingeo Game have succeeded on global online video services (OTT) like Netflix, related stocks have surged significantly. Additionally, with the phased recovery of daily life (With Corona), concerts are expected to resume from the fourth quarter, which seems to be driving the strong stock performance. Lee Jaeseon, a researcher at Hana Financial Investment, said, "Unless there is a sudden rise in interest rates, the relative strength of the content sector is likely to continue in the current phase where inflationary pressure due to bottlenecks remains." He added, "First, the growth theme to which the content sector belongs shows relatively low exposure to supply shortage sensitivity, which is one of the recent market risks, and the operating profit proportion of content stocks in the KOSPI has rebounded since October, indicating that the profit influence is likely to expand compared to the past."