[Featured Stock] SBS Surges Over 8%... Expected to Return to Profit Riding on Netflix

SBS stock price surged over 8% on the 4th. This is attributed to growing expectations of a return to profitability this year, supported by collaboration with Netflix.

As of 10:33 a.m. on the day, SBS shares were trading at 21,600 KRW, up 8.05% from the previous close.

In December last year, SBS signed a strategic partnership with Netflix focused on supplying new and existing content. Starting January this year, SBS will provide dramas, entertainment, and educational programs to Netflix for six years. The incremental operating profit from this is estimated at 40 to 50 billion KRW annually. Performance improvement is also expected due to increased investment scale from Netflix.

Lee Ki-hoon, a researcher at Hana Securities, stated, “With Netflix-related profits reflected from this year, after a severely weak first quarter in advertising, profit growth is expected over the next three years.” He added, “There will be no sports-related events that recorded large deficits annually, and profits will improve in various areas such as labor cost reductions from voluntary retirement and restructuring of MediaNet, the main cause of subsidiary underperformance.”