[Click eStock] "Contentree Joongang, the Center of K-Content... Broadcasting Leads, Theaters Support"

[Asia Economy Reporter Kwon Jaehee] IBK Investment & Securities on the 2nd gave Contentree Joongang a 'Buy' rating and set a target price of 70,000 KRW.

Contentree Joongang (formerly J Contentree) is engaged in holding company business such as affiliate management, as well as broadcasting and film content investment businesses. Through its major subsidiaries, it produces and distributes content and operates a theater chain. Its main subsidiaries include SLL Joongang and Megabox Joongang, and the business divisions are largely divided into broadcasting and theaters centered on these two subsidiaries. As of the end of 2021, the sales ratio by business division was 85.1% for broadcasting and 14.9% for theaters.

This year, Contentree Joongang's performance is expected to occur simultaneously in both the broadcasting and theater sectors. The broadcasting sector achieved a significant leap last year with the adoption of an original content production model for OTT platforms. A stable profit generation model based on production costs typically ranging from 10 to 20% and content completeness through pre-production has been established as a mid- to long-term growth model. There are many attractive factors to look forward to, including the expansion of seasonal series, increased production orders from other platforms, and leverage effects due to increased production costs.

Researcher Lee Hwanwook of IBK Investment & Securities analyzed, "This year, the number of productions is expected to reach 35, nearly 10 more than the previous year, driving overall corporate performance growth," and added, "In the theater sector, a clear recovery in performance is expected recently in conjunction with the lifting of social distancing measures."

He further added that due to factors such as ticket price increases and workforce efficiency improvements, the operating leverage effect is expected to be greater than ever.