KB Securities announced on October 13 that it has lowered the target price for Studio Dragon to 32,000 won, citing ongoing weakness in the industry. The firm maintained its 'buy' rating.
In a report, analyst Choi Yong-hyun stated, "Global over-the-top (OTT) platforms are experiencing declining market share compared to YouTube due to recent poor content performance, raising concerns."
However, he added, "Global OTTs are expected to reinforce original content, which will positively impact Studio Dragon. The company is projected to show growth potential through its expansion into global markets and intellectual property (IP) business in the medium to long term."
Regarding third-quarter results, he noted, "Operating profit is expected to reach 14.8 billion won, aligning with consensus estimates. The tentpole production 'Slowly but Intensely' is projected to deliver 22 episodes, resulting in a year-on-year revenue and operating profit growth of 12.2% and 40.9%, respectively."
Choi further explained, "The difference between global OTTs and legacy media will be driven by original content rather than live programming, making it unlikely for investments in original content to decrease. This will also have a positive effect on Studio Dragon."
Additionally, he mentioned, "By 2027, there could be orders for up to three series directed toward the U.S. market, and we expect growth potential to be unlocked through global market expansion."
* This article has been translated by AI.
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