SAMG Entertainment, 'Tinyping' Rivaling Idols

Stock Price Up 72% This Year... Market Cap Recovers to 190 Billion KRW
Turned Profitable in Q4 Last Year Thanks to Teenieping's Popularity

The corporate value of SAMG Entertainment (SAMG Enter) has been rapidly growing since the announcement of its fourth-quarter earnings last year. This is the result of an influx of investors who judged that the company had entered a full-fledged growth phase after successfully turning profitable for the first time in seven quarters.

According to the financial investment industry on the 13th, SAMG Enter's stock price has risen 71.6% this year. During the same period, the KOSDAQ index increased by 9.9%. Its market capitalization has grown to 188 billion KRW.

The company's stock price surged 43.5% over the past three days. The fourth-quarter earnings announcement last year served as a positive catalyst. During this period, domestic institutional investors and foreigners recorded net purchases of 2.8 billion KRW and 8.4 billion KRW, respectively.

On a consolidated basis for the fourth quarter of last year, SAMG Enter recorded sales of 41.9 billion KRW and operating profit of 9 billion KRW. Compared to the same period last year, sales increased by 21.5%, and operating profit turned positive. Last year's sales amounted to 116.4 billion KRW, a 22.4% increase from the previous year. Operating loss was 6.1 billion KRW, narrowing the deficit compared to the previous year.

Founded in 2000, SAMG Enter is a first-generation animation company. It is responsible not only for planning, production, and distribution but also for character licensing and merchandise planning (MD). It develops its own characters and produces animation content. In 2016, the 'Mini Force' series gained popularity in China. The 'Catch! Teenieping' series is popular not only in Korea but also in China and Japan.

The reason SAMG Enter was able to turn profitable in the fourth quarter last year is also thanks to the popularity of the Teenieping character. The animated film 'Love Hachuping,' released last year, attracted 1.23 million viewers. Following the film's success, sales of Teenieping-related MD products increased, and collaborations with major companies in the food & beverage (F&B) and fashion sectors have risen.

In December last year, just before Christmas, parents who could not find Teenieping toys posted on secondhand trading boards that they were willing to pay even extra money. The 'Shooting Star Catch Teenieping Aurora Ping Castle House' saw a surge in orders that outpaced supply. The purchase quantity had to be limited to two per transaction due to its popularity.

Joo Ji-eun, a researcher at Shinhan Investment Corp., explained, "After the success of 'Love Hachuping,' Teenieping has leapt from a kids' intellectual property (IP) to a character IP," adding, "Toy sell-outs continue, and license sales using the Teenieping IP are rapidly increasing." She added, "We are raising this year's operating profit estimate by 205% compared to the previous forecast," and "We estimate sales of 140.6 billion KRW and operating profit of 17.4 billion KRW this year."

A representative of SAMG Enter said, "The success of the film 'Love Hachuping' and the high value-added business strategy utilizing various animation IPs succeeded simultaneously," adding, "Along with increased sales, cost reduction was also possible." He emphasized, "Since the fourth quarter of last year, both the cost of sales ratio and selling and administrative expense ratio have decreased," and "This year, we expect to operate the business with the goal of achieving profitability on an annual basis."