[Click eStock] "CJ ENM, Focus on Improving Direction"

On October 28, Korea Investment & Securities analyzed that expectations for a performance recovery at CJ ENM are rising, as the company is showing improvement across its overall business operations.

Kim Jeongchan, a researcher at Korea Investment & Securities, stated, "CJ ENM is the only comprehensive media and content company in Korea that covers film and drama production, platform business, music, and commerce," adding, "With the expansion of K-content competitiveness and clear signs of recovery in each business division, there are sufficient factors for a revaluation."

For the third quarter of this year, CJ ENM’s consolidated sales are projected to reach 1.3 trillion won, up 17.3% year-on-year, while operating profit is expected to increase by 67.9% to 26.6 billion won, in line with market consensus.

Kim forecasted, "Tving is expected to reduce its deficit in the second half compared to the first half, driven by subscriber growth resulting from its partnership with SK Telecom, the introduction of Wavve bundling, and account sharing restrictions." He also predicted, "In the film and drama segment, Studio Dragon is expected to record an operating profit of 20.8 billion won, thanks to an increase in the number of episodes aired in the second half and the investment and distribution success of 'No Other Choice.'"

Although the music segment’s operating profit is expected to be limited to 6.2 billion won due to a reduction in activities by its own artists, expectations are growing for expansion into the Chinese market through the debut of artists from 'Boys II Planet' and the upcoming release of 'Planet C Home Race' in December. The commerce segment is projected to post an operating profit of 11.9 billion won, as the off-season impact lessens thanks to increased home shopping sales. Kim added, "The MLC transaction volume in the first half grew by 47% year-on-year, sustaining growth, and from 2026, it is expected to make a full-fledged contribution to profits."

He noted, "The overall direction of each business division is positive, and improvements in financial soundness and cash generation through the sale of non-core assets have been confirmed." He assessed, "While profitability improvements had previously fallen short of expectations due to the slow recovery of Tving and Fifth Season, the rebound in Tving subscribers and the easing of sluggishness at Fifth Season in the second half limit the possibility of further performance deterioration."

Additionally, Kim emphasized, "If demand for K-content continues to rise and the Chinese ban on Korean content is eased, all business divisions could benefit," and stressed, "It is important to pay attention to the improving direction of both core operations and financial structure."