[Click eStock] "SBS, Record-Breaking Deal with Netflix... Target Price Up"

Expected to Achieve 100 Billion KRW Operating Profit Within 3 Years

Hana Securities on the 23rd forecasted that SBS will record an operating profit of 100 billion KRW by 2027 after signing a record-breaking contract with Netflix. Accordingly, it maintained a 'Buy' investment rating and raised the target stock price to 40,000 KRW.

Lee Ki-hoon, a researcher at Hana Securities, stated, "SBS announced a strategic partnership with Netflix regarding content supply," adding, "Simply put, new and old shows that used to air on Wavve will move to Netflix, and additional overseas content sales will be supplied beyond that."

According to the partnership details, SBS will supply part of its newly aired domestic content to Netflix for six years starting January 1, 2025, and will begin supplying some overseas content from the second half of 2025. Additionally, new variety and documentary content will be supplied domestically, and the pre-contract aired content library will be supplied domestically as well.

The researcher evaluated, "The six-year term is the longest in Korea, and it is an unprecedented, record-breaking contract in every aspect, including being the first globally to service the entire broadcaster's programming."

He further projected, "The content investment contract is estimated to exceed 1 trillion KRW over six years, with an annual incremental operating profit of around 40 to 50 billion KRW. Given that SBS will play a key role in Netflix's Korean content, it is highly likely that valuable IP will concentrate at SBS, and programming expansion will inevitably follow."