[Alpha Biz= Paul Lee] On December 15, DS Asset Management reaffirmed its “Buy” rating on Studio Dragon, maintaining a target price of KRW 60,000, citing an expected earnings turnaround next year.
The brokerage projected 2026 revenues of KRW 643.6 billion and an operating profit of KRW 51.2 billion, representing an anticipated year-on-year increase of 20% in revenue and 81% in operating profit.
Ji-hye Jang, a researcher at DS Asset Management, stated, “Revenue growth is expected to be driven by the resumption of tvN’s Wednesday–Thursday lineup, the supply of dramas to domestic and international OTT platforms and terrestrial broadcasters, as well as an expansion of overseas productions.”
She added, “The annual number of drama productions is estimated to rise from 18 last year to 21 this year and more than 26 next year. Profitability is expected to improve due to increased pre-sales, cost reimbursement of production expenses, and cost efficiency through the use of artificial intelligence (AI).”
Jang noted, “Over the past three years, the domestic drama production industry has faced limitations in growth and profitability, resulting in subdued stock performance. However, Studio Dragon is expected to overcome these constraints through the expansion of its intellectual property (IP) business.”
She further explained, “The company is diversifying its IP business beyond simply selling drama-related merchandise and operating pop-up stores. The four key areas include commerce (brand building), digital (interactive content production via YouTube and short-form media), character (leveraging official character universes), and human IP (discovering new actors), transforming into a business model capable of sustained earnings growth.”
According to Jang, “Studio Dragon’s IP business profitability reaches 50%, and the share of IP revenue is expected to increase from an average of 3% during 2022–2025 to 30% in the medium to long term, driving overall earnings growth.”
알파경제 Paul Lee 특파원(hoondork1977@alphabiz.co.kr)
