[Click eStock] "Contentsree Joongang, Focus on Recovering Earnings"…Target Price Up

NH Investment & Securities maintained a buy rating on Contentsree Joongang on the 28th, expecting a recovery in performance, and raised the target price from the previous 16,000 KRW to 20,500 KRW.

Researcher Hwajeong Lee of NH Investment & Securities stated, "With the end of the US actors' union strike, the biggest obstacle to Contentsree Joongang's annual operations has finally been resolved," adding, "In the broadcasting sector, the resumption of operations by the subsidiary Wiip will notably reduce losses, and in the theater sector, a full-scale recovery in box office performance is expected, supported by the release of postponed anticipated works such as 'Dune 2'."

Contentsree Joongang's consolidated sales for the fourth quarter of this year are expected to reach 236 billion KRW, down 4% year-on-year, while operating profit is expected to turn positive to 2.8 billion KRW, exceeding consensus estimates.

In the broadcasting sector, an operating loss of 3.2 billion KRW is estimated. Researcher Lee explained, "This is due to the captive airing frequency being limited to 32 times," and added, "For the subsidiary, operating losses of 5 billion KRW are expected to continue as the final aftermath of the Hollywood strike."

He continued, "In the theater sector, operating profit is estimated at 7.6 billion KRW," and said, "Despite the absence of anticipated Hollywood works, 'Seoul Spring,' which was invested in and distributed, has reached one-third of the break-even audience number with 1.5 million viewers in just three days, and thanks to word of mouth, a prolonged box office success can be expected."

Researcher Lee also noted, "In the case of indoor playgrounds, operating profit is estimated at 3.4 billion KRW," adding, "With outstanding performance from overseas branches, the effect of opening stores centered on high-profit brands is also expected."