[Click eStock] "Rich Lineup... Studio Dragon Expected to Recover Growth This Year"

4Q Earnings, 'Jirisan' Settlement Deferred, One-Time Declines from Employee Bonuses
Over 32 Dramas to Release This Year...Expectations for Performance Improvement Upward

[Asia Economy Reporter Minwoo Lee] Studio Dragon is expected to post slightly below-forecast results for the fourth quarter of last year. However, it is analyzed that the company will recover its growth potential by releasing numerous works this year.

On the 14th, Heungkuk Securities maintained its 'Buy' investment rating and target price of 115,000 KRW for Studio Dragon based on this background. The closing price on the previous day was 86,400 KRW.

The fourth-quarter results are expected to be 110.6 billion KRW in sales and 7.9 billion KRW in operating profit. Compared to the same period last year, sales decreased by 19.7%, while operating profit increased by 71.6%. Seongjin Hwang, a researcher at Heungkuk Securities, explained, "Overseas sales declined due to a decrease in simultaneous broadcasts on Over-The-Top (OTT) platforms, while the deferred settlement effect of 'Jirisan' and employee incentives were reflected. This downturn is not due to large-scale accelerated depreciation as in the past but is a temporary factor. Considering the abundant release schedule of works this year, recovery of growth potential is fully possible."

More than 32 new dramas are expected to be released this year. This is because the scheduling of affiliated channels is recovering, and the number of digital OTT broadcasts is also increasing. Last year, there were 25 dramas, two fewer than the previous year due to scheduling adjustments and other factors.

In addition to works for affiliated channels such as TVN and OCN, about 11 OTT works are being prepared. Including more than two Netflix originals (Girl Scout, Celebrity), content is expected to be provided to Disney Plus, iQIYI, TVING, and others. 'The Big Door Prize,' confirmed for supply to Apple TV Plus (+), is scheduled for release in the second half of the year. Introducing a seasonal system later is expected to generate even higher profits.

Researcher Hwang said, "With intensified competition among OTT platforms and the consecutive global hits of 'Squid Game' and 'Hellbound,' demand for Korean dramas is rapidly increasing. Based on excellent content production capabilities, Studio Dragon will lead the industry’s transformation and further expand its content supply channels."