[Click eStock] "Contentree Joongang, Industry Slump... Price Target Lowered to 17,000 Won"

On the 4th, Korea Investment & Securities announced that it would lower the target price for Contentsree Joongang to 17,000 KRW, reflecting the sluggish business conditions. The investment rating was maintained as a buy.

Andoyoung Ahn, a researcher at Korea Investment & Securities, explained, "We applied a sum of the parts (SOTP) valuation model, using an enterprise value to EBITDA (EV/EBITDA) multiple of 7.5 times for broadcasting and 4.7 times for space business, respectively," adding, "We adjusted the earnings estimates and applied multiples to reflect the sluggish business conditions."

Performance is expected to turn around this year after hitting a low last year. The broadcasting division (SLL) is comparable in scale to Studio Dragon (market capitalization of 1.3 trillion KRW), and the theater division (Megabox) holds a 20% share of the domestic cinema market and owns an investment and distribution company that distributed two films with over 10 million viewers last year. Researcher Andoyoung Ahn noted, "Considering this, a market capitalization below 250 billion KRW, which is lower than Showbox, is an attractive price."

In the last quarter, the operating loss was 49.6 billion KRW, marking a very poor performance. Operating profit for this year is expected to be 16 billion KRW.

Researcher Andoyoung Ahn analyzed, "The broadcasting division is expected to achieve an operating profit of 13.1 billion KRW as profitability improves through an OTT pre-sale followed by TV scheduling strategy, accompanied by an increase in the number of works," adding, "With the recognition of goodwill impairment losses in subsidiaries and the end of some amortization periods, the PPA amortization expenses, which amounted to about 20 billion KRW annually, are expected to decrease, and the amortization is expected to be completed by the first half of 2025."