[Click eStock] "Studio Dragon, High Growth in Earnings Expected Next Year"

NH Investment & Securities analyzed on the 6th that Studio Dragon is expected to achieve high growth in performance next year. The investment opinion 'Buy' and the target price of 62,000 KRW were maintained.

NH Investment & Securities expects improvements in profitability, sales volume, and production costs for Studio Dragon next year. Researcher Hwajeong Lee of NH Investment & Securities said, "We are aiming to strengthen profitability and stabilize quarterly performance through portfolio optimization mixing tentpole and general dramas," adding, "The resumption of the Wednesday-Thursday drama slots on captive channels and the expansion of global OTT original deliveries are expected to fix the annual number of sold works at a high level." He also added, "We plan to achieve production cost efficiency by realizing labor costs through improvements in the settlement system, AI-utilized production, and diversification of actor casting."

Exports to China are also a hopeful factor. He said, "The upside is valid when exports resume," and "After the sale of the old library is prioritized, simultaneous airing of new works may resume." He added, "However, time will be needed for full normalization."

NH Investment & Securities forecast that Studio Dragon will record consolidated sales of 89.4 billion KRW in the fourth quarter, a 45% decrease compared to the same period last year. However, operating profit is expected to turn positive and reach 4.5 billion KRW. He said, "The number of new episodes aired in the fourth quarter will be 43," adding, "However, since promising works are lined up in the first quarter of next year, we expect the number of aired episodes to steadily increase."