Anticipated Releases and Platform Competition Rise... Growing Year-End Expectations for Media Stocks

Year-End Theater Releases Including Spider-Man and Matrix Anticipated
Content Providers' Value Rises Amid OTT Competition with Disney+ and HBO Max

[Asia Economy Reporter Minwoo Lee] Stocks in media sectors such as content and advertising, which had been sluggish throughout November, are showing renewed strength. This is interpreted as growing expectations due to the release of various blockbuster films at the end of the year and the entry of content platforms into the Korean market.

According to the Korea Exchange on the 13th, CJ CGV's stock price rose 5.5% based on closing prices from the 3rd to the 10th. During the same period, the KOSPI yield was 1.4%, nearly four times lower. The stock has risen more than 11% this month alone, showing a contrasting trend to the 29.89% decline last month.

This month’s rise appears to reflect anticipation for this year’s most highly awaited new releases such as "Spider-Man: No Way Home" and "Matrix: Resurrections." Although stock prices fell throughout last month due to concerns over the new COVID-19 variant "Omicron," the adjustment in social distancing levels was not significant, and there were no changes in guidelines related to theater operations, which is seen as a positive factor. However, concerns remain that if the government strengthens quarantine policies, stock prices could temporarily weaken regardless of actual theater business contraction.

Content suppliers such as Jcontentree and CJ ENM also outperformed the weekly market yield during the same period, rising 2.4% and 1.9%, respectively, from the 3rd to the 10th. This is attributed to the anticipation of upcoming works like "Snowdrop" and increased competition among various online video services (OTT). Kim Hoejae, a researcher at Daishin Securities, explained, "Following Netflix, Disney Plus (+) is also planning to release original content, and the entry of HBO Max into Korea is within sight. It is necessary to view this trend as a rise in the value of content beyond individual project performance."

The advertising sector, which had been somewhat quiet, has also continued its upward trend this month. Samsung Group’s Cheil Worldwide and Hyundai Motor Group’s Innocean rose 3.4% and 4.3%, respectively, over the past week. Researcher Kim said, "Although stocks fell sharply at the end of November due to concerns that strengthened quarantine policies could lead to consumption and industrial contraction, advertising profits are largely generated from stable internal orders within affiliates, relatively unaffected by quarantine policies. It is also important to note that the fourth quarter is the period when the best performance is achieved annually."