[Click eStock] "NEW, Earnings Fluctuate with Movie Box Office... Short-Term Approach Needed"

Performance Volatility Due to Movie Box Office Success
Series of Anticipated Releases in the Second Half
Profit Turnaround Expected Centered on Dramas

DB Financial Investment analyzed on the 17th that NEW's earnings volatility is high depending on the box office performance of its films, and short-term approaches are necessary for each work. No separate investment opinion or target price was presented. NEW's closing price on the previous trading day was 3,110 KRW.

Shin Eun-jung, a researcher at DB Financial Investment, stated, "NEW's film investment and distribution business experiences significant earnings volatility depending on the success of the invested films. It is expected to focus on strategies for efficient film investments in the future, and the stock price requires short-term approaches for each work."

From June to July, dramas produced by Studio&New and films invested in by NEW are scheduled to be broadcast at one-month intervals. The film "Seolgyeja" (The Designer), released on May 29, recorded a disappointing 500,000 viewers (BEP 2 million viewers), leading to an expected operating loss of about 5 billion KRW in Q2. However, the breakeven point (BEP) hurdles are expected to be lower in the second half of the year, reducing the burden of losses from investment deficits. The film "Handsome Guys," scheduled for release on June 26, has a BEP of 1 million viewers; "Haengbok-ui Nara" (Land of Happiness), scheduled for August, has a BEP of 1.7 million viewers; and "Hidden Face," scheduled for October, has a BEP of 1.4 million viewers, with these anticipated works in preparation.

NEW's consolidated annual sales for 2024 are projected to be approximately 130 billion KRW, with an operating profit of 2 billion KRW. Sales are expected to be similar to the previous year, but profits are anticipated to improve, turning from a 600 million KRW loss last year to a profit this year. Researcher Shin said, "In 2023, investment losses from the films 'Soulmate' and 'Guigongja' (The Nobleman) were analyzed as the main factors for Studio&New's operating loss of 6.4 billion KRW, but in 2024, attention should be paid more to dramas than films. Compared to 2023, one to two more works such as 'Hwain Gas Candle' in Q1, 'Good Boy' in Q2, and 'Good Partner' in Q3 are expected to be reflected in the earnings." Studio&New's annual sales for 2024 are expected to be 60 billion KRW, with an operating profit of 500 million KRW.