[Click eStock] NEW, Rich Lineup Next Year... Expected Performance Improvement

DS Investment & Securities Report

[Asia Economy Reporter Minji Lee] DS Investment & Securities stated on the 20th that NEW is expected to show improved performance next year due to a richer lineup of movies and dramas.

NEW's cumulative consolidated results for the third quarter recorded sales of 114.6 billion KRW, gross profit of 30.9 billion KRW, and operating profit of 1.5 billion KRW. The operating profit margin was 1.3%, reflecting somewhat disappointing results as the release of movies and dramas was delayed compared to the beginning of the year forecast.

The fourth quarter is expected to be solid with the box office success of the movie Owl and partial recognition of production revenue from the drama Moving. Owl surpassed 2.83 million cumulative viewers from the 23rd of last month to the 18th of this month, exceeding its breakeven point of 2.1 million viewers. Thus, NEW’s annual movie investment and distribution this year includes four films (Special Delivery, The Witch: Part 2, Honest Candidate 2, and Owl), and three dramas recognized for production revenue (Some of You and My Police Academy, Moving, and Doctor Cha Jeong-sook), but only one drama is expected to be aired.

NEW’s lineup for this year consists of 6 to 8 movies, two of which are produced by its drama subsidiary Studio&New. Studio&New’s dramas include the highly anticipated Disney+ title Moving, and it is expected to additionally recognize production revenue from three dramas (Say I Love You, Good Boy, and Hash’s Shinru). Studio&New’s sales are projected to expand from around 60 billion KRW this year to 100 to 120 billion KRW next year.

Jang Ji-hye, a researcher at DS Investment & Securities, said, “Since we have supplied at least one work annually to Disney, production revenue can increase,” adding, “The VFX subsidiary Engine experienced one-time costs this year, which worsened profitability, but profit and loss improvement is possible next year.”