SAMG Entertainment Achieves 11.6 Billion KRW Operating Profit in First Half... Profitable for Three Consecutive Quarters

Global IP content company SAMG Entertainment (CEO Kim Suhoon, hereafter SAMG Entertainment) announced on August 14 that it recorded consolidated sales of 71.1 billion KRW and operating profit of 11.6 billion KRW in the first half of this year. Sales increased by 43% compared to the same period last year, and the company achieved an operating profit for the third consecutive quarter.

For the second quarter, consolidated sales reached 35.4 billion KRW and operating profit was 5.3 billion KRW, marking a 46% increase in sales year-on-year. Expansion of the 10s and 30s age group target audience, sales of collaboration merchandise with large corporations, and strong performance during the peak season all contributed to an operating profit margin (OPM) of 15.1%.

SAMG Entertainment has maintained profitability for three consecutive quarters since its earnings turnaround in the fourth quarter of last year. Notably, the complete disposal of excess inventory and the internalization of distribution channels in the second half of last year led to significant improvements in cost and SG&A expense ratios. As a result, the cost of sales ratio dropped from about 85% last year to 59% this quarter, and the company has maintained a stable profit structure despite increased marketing expenses during the peak season.

SAMG Entertainment's product sales in the first half amounted to approximately 54 billion KRW, an increase of about 36% year-on-year. The expansion of product sales during the peak season in May and collaborations with global companies were key to broadening the target age group to those in their 10s and 30s. In particular, the OSMU (One Source Multi Use) collaboration with Hyundai Motor Company, which included content, merchandise, and pop-up events, filled the 'Hyundai Motorstudio Goyang' exhibition hall. In addition, the company recently succeeded in entering the Indonesian market, accelerating its efforts to expand its global target age group.

The licensing business also showed a clear trend of expanding its age demographic. The 'Teen-Up Check Card,' launched in collaboration with KB Kookmin Card, surpassed 100,000 issuances within a month of its release, with over 70% of issuances going to customers in their 20s and 30s, reflecting strong demand among young adults. Kia Tigers uniform merchandise sold out immediately after launch, driven by the enthusiasm of baseball fans in their 20s and 30s. Furthermore, character IPs such as 'Catch! Teenieping' and 'Hachuping' were introduced in industries requiring character IP, including K-POP, cosmetics, F&B, finance, automotive, and sports. As a result, second-quarter licensing sales reached approximately 13 billion KRW, a 93% increase compared to the same period last year.

In the second half of the year, collaborations with SM Entertainment will begin in earnest. The 'Teenieping x Hearts2Hearts' collaboration merchandise, which went on sale from July 14, sold out early on major platforms including the SM KWANGYA Store, and the already revealed 'Teenieping x aespa' collaboration merchandise is set to launch soon. In addition, Hachuping, now recognized as a leading K-character, is transforming into an idol with the 'Hachuping Idol Project' figure blind box, which has started pre-orders, further expanding the collaboration between K-characters and K-POP.

SAMG Entertainment's global growth remains robust. Overseas sales in the first half amounted to approximately 18.6 billion KRW, accounting for about 26% of total sales. In China, the company announced the broadcast of 'Wishcat' in July and 'Metal Cardbot S Part 2' in August, and pre-orders for 'Teenieping x Hatuha' merchandise will begin in China from August 18. In Japan, 'Catch! Teenieping' Season 3 began airing in July, and a cruise travel package featuring Lawson and Hachuping was launched, further raising awareness of K-animation IP in the local market.

In the second half of the year, major new releases such as 'Catch! Teenieping' Season 6 and 'Metal Cardbot' Season 3 are scheduled to be unveiled sequentially. In addition, the company stated that it is coordinating the release schedule for the sequel to the movie <Hachuping of Love>, which served as a bridge for expanding the target age group, as well as the second movie in the 'Catch! Teenieping' series, aiming for an early release next year.

Kim Suhoon, CEO of SAMG Entertainment, stated, "Since turning profitable in the fourth quarter of last year, we have achieved clear growth in both sales and profit, securing a stable profit base," and added, "We will continue to build mid- to long-term growth momentum by expanding our global fandom through the release of new titles and large-scale brand collaborations in the second half of the year."