[Alpha Biz= Paul Lee] NH Investment & Securities forecasts significant growth in Studio Dragon's earnings, driven by improved profitability, increased sales, and cost-saving measures. The firm also sees potential benefits from the resumption of exports to China. The target price is maintained at 62,000 won, and Studio Dragon remains NH's top pick in the industry.
On Thursday, NH Investment & Securities reported, "Studio Dragon's consolidated revenue for the fourth quarter decreased by 19% year-on-year to 130.6 billion won, but operating profit turned positive to 5.4 billion won, surpassing lowered consensus estimates."
The firm explained, "The number of new dramas aired in the fourth quarter was 46, a 35% decrease compared to last year, but both new titles 'Jeongnyeoni' and 'Love on a One-Lane Bridge' were sold in advance, improving sales efficiency." NH Investment & Securities added, "Key works in the first quarter, such as 'Ask the Stars' (tentpole) and 'Wongyeong', as well as OTT-oriented titles like 'Tanjim' and 'Study Group,' have also been pre-sold, ensuring stable performance."
The firm further stated, "Studio Dragon is strengthening profitability by optimizing the portfolio mix between high-budget (tentpole) and low-budget dramas, as well as maximizing sales efficiency through the active pre-sale of global OTT rights."
Regarding sales volume, NH Investment & Securities projected, "The number of sales works for 2025 will increase by 36% year-on-year to 25 titles. The reintroduction of tvN's Wednesday-Thursday drama slot in the second half of this year, as well as the return of public broadcasting network programming, will be effective drivers."
The firm also noted, "The positive effect of the reintroduction of the Wednesday-Thursday drama slot is expected to continue into 2026, alongside the full-scale delivery of localized dramas for the U.S. and Japan, which will sustain the increasing trend in annual sales works."
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
