[Click eStock] "CJ CGV, 4DPLEX... Theater Industry Restructuring Begins"

On May 9, KB Securities stated regarding CJ CGV, "The restructuring of the theater industry has begun," and analyzed, "Although first-quarter results fell short of market expectations, the company is seeking new growth drivers through 4DPLEX."

On this day, Choi Yonghyun, a researcher at KB Securities, said, "CJ CGV's first-quarter results recorded revenue of 533.6 billion won, up 35.8% year-on-year, and operating profit of 3.2 billion won, down 29.5% year-on-year, which was significantly below the market consensus of 20.5 billion won for operating profit."

Choi analyzed, "The number of domestic moviegoers in the first quarter was 20.81 million, a decrease of about 33% compared to 30.9 million last year. In China, the number of moviegoers in the first quarter reached 520 million, a 43% increase year-on-year. However, due to restructuring strategies, CJ CGV's market share in China fell to 2% (compared to 2.2% in the same period last year), resulting in an operating profit of 18.9 billion won." As of the previous day's cumulative total, the number of domestic moviegoers in the second quarter was 8.72 million, about 27% of the 32 million in the second quarter of last year.

Regarding the merger discussions between Megabox and Lotte Cinema, Choi stated, "The merged entity's market share in the theater sector is expected to be similar to or slightly higher than that of CJ CGV (CJ CGV's market share last year was 48.5%)," and explained, "Movie theaters are generally facing difficulties, so improving profitability takes priority over securing market share."

He further analyzed, "It is unlikely that this merger will intensify market competition, and CJ CGV plans to continue pursuing cost-efficiency policies to improve the structure of domestic theaters."

As a new growth driver, 4DPLEX was highlighted. Choi said, "CJ CGV plans to secure growth drivers by differentiating the theater experience through 4DPLEX," and added, "The company is targeting growth in key strategic countries, as seen in the big deal signed with AMC in March for 65 theaters." He continued, "The 4DPLEX division announced a blueprint to expand the number of special screening theaters from 1,200 to 2,000 and increase revenue sixfold by 2030. Investment is expected to increase this year, with substantial performance growth anticipated in 2026."

Additionally, Choi noted, "The key issue will be whether CJ CGV can provide services that can only be experienced in theaters by utilizing 4DPLEX," and added, "4DPLEX also plans to participate in content, offering differentiated services beyond simply watching on a large screen."