[Special Stock] SBS Soars on Netflix Contract Boost

SBS, which signed a new and old work supply contract with Netflix for 6 years, soared to the upper price limit immediately after the market opened amid expectations from the securities industry.

As of 9:04 a.m. on the 23rd, SBS is trading at 26,000 KRW, up to the price limit (30.00%) compared to the previous session on the KOSPI market. The stock price started at 25,050 KRW and then expanded its gains.

In a report on the same day, Hana Securities raised the target price for SBS from the previous 20,000 KRW to 40,000 KRW, doubling it, citing expectations of earnings upgrades due to the record-breaking contract with Netflix.

Lee Ki-hoon, a researcher at Hana Securities, said, "The period is 6 years, the longest in Korea," and evaluated it as "an unprecedented, record-breaking contract in every aspect, including being the first in the world to service the entire broadcaster's programming."

He added, "The content investment contract is estimated to be over 1 trillion KRW over 6 years, and the incremental operating profit is estimated at around 40 to 50 billion KRW annually," and expressed optimism, saying, "Since Netflix will play a key role in Korean content, there is a high possibility that good intellectual property (IP) will be concentrated on SBS, and programming expansion will inevitably follow."

With this contract, SBS's operating profit for next year is estimated to be around 100 billion KRW. The researcher added, "If applied optimistically, the market capitalization could reach 1.5 trillion KRW, so it is judged to be a contract that can raise it up to 1 trillion KRW," and said, "Since earnings will be confirmed from the first quarter of next year, we plan to further upgrade earnings forecasts thereafter."