[Click eStock] "Studio Dragon, Leveling Up to a Comprehensive IP Studio"

On December 15, DS Investment & Securities projected that Studio Dragon's current IP (intellectual property) business revenue share, which averages 3%, will rise to 30% in the medium to long term, driving earnings growth. The investment opinion remains 'Buy,' with a target price of 60,000 won.

Studio Dragon's revenue for 2026 is expected to reach 643.6 billion won (up 20% year-on-year), with operating profit at 51.2 billion won (up 81%), signaling a rebound in performance. Jang Ji-hye, a researcher at DS Investment & Securities, stated, "Revenue growth will be driven by the resumption of tvN's Wednesday-Thursday lineup, the supply of dramas to both domestic and international OTT platforms and terrestrial broadcasters, and the expansion of overseas production." She estimated that the company's annual drama production volume will increase from 18 titles last year to 21 this year, and to more than 26 next year. Profitability is also expected to improve, supported by increased pre-sales, cost reimbursement for production expenses, and cost optimization through the use of artificial intelligence (AI).

Amid rising drama production costs and declining broadcast advertising, drama production companies have faced shrinking scale and reduced profitability. Studio Dragon has also seen its revenue decline for two consecutive years since peaking in 2023. Its operating margin, which once reached 10%, is estimated to have dropped to 5%.

Researcher Jang commented, "However, Studio Dragon is expected to overcome the limitations of the drama production business by expanding its IP operations." She explained, "The company plans to broaden its new IP businesses based on its strong channel negotiation power and production competitiveness, which enable it to consistently produce 20 to 30 high-profile dramas annually." The company is expected to diversify its IP business into four areas: commerce (brand building), digital (interactive content production via YouTube and short-form videos), character (leveraging official character universes), and human IP (discovering new actors), going beyond drama merchandise sales and pop-up store operations.