[Click eStock] "Entertainment & Media, Next Year's Keyword is China Reopening... Simultaneous 'Overweight'"

[Image source=Yonhap News]

[Asia Economy Reporter Kwon Jaehee] On the 24th, Kiwoom Securities collectively issued an 'Overweight' rating for the leisure, entertainment, advertising, and media industries in 2023.

Kiwoom Securities forecasted that the leisure industry’s casino performance will level up due to increased demand from Japanese travelers. While the fourth quarter of this year focused on Japanese VIPs, there is an expectation that Japanese demand will become more mainstream next year. In particular, casinos in Seoul, Incheon, and Busan, which have a high proportion of Japanese visitors, are expected to continue showing superior performance improvements.

Kiwoom Securities identified the keywords for the leisure industry next year as deferred outbound demand (casino and overseas travel), pent-up demand, and China’s reopening.

Researcher Lee Namsu of Kiwoom Securities stated, "The deferred and pent-up demand for casinos confirmed in Japan is expected to expand to Southeast Asia and Hong Kong by the end of this year and spread to China in the first half of next year," adding, "The quantum jump point is China’s reopening."

The entertainment industry is seen to depend on improved profitability from world tours and the expansion of intellectual property (IP) platforms.

Although macroeconomic instability continues, deferred and recovery demand due to reopening is clearly being confirmed. Especially as we enter the endemic phase, an expansion in seating capacity is expected to simultaneously drive ticket and merchandise (MD) growth.

The advertising industry is expected to see the full bloom of the online video streaming service (OTT) advertising market next year, while the media industry will face intensified PTT competition, making the stabilization and differentiation of content supply and the ability to secure IP key factors.

Researcher Lee analyzed, "Following the recent rise in expectations for the lifting of the Korean Wave ban after THAAD, re-entry into the Chinese content market is expected to continue," adding, "In particular, the accumulated use of old IPs over the past five years since 2017 will be actively utilized."