A 40s office worker's daughter, Kim's 6-year-old girl, has been a passionate fan of Tiny Ping for three years. She collects dozens of new Tiny Ping toy sets every season, as well as clothing and accessories featuring Tiny Ping. On weekends, she watches Tiny Ping movies or musicals and chooses snacks that are all character products featuring Tiny Ping.
Recently, it seemed like the child's interest was waning, but she started collecting 'Ai Nyan' character stickers, saying that 'Wish Cat' is popular among her kindergarten friends. This marked the appearance of the new character 'Pasang Nyan' following 'Pasang Ping.'
Kim noted that these characters, which breed indefinitely, came from the same production company. He thought they had an outstanding ability to rake in money and invested in SAMG Entertainment earlier this year, only to find his account showing a return on investment in the triple digits recently. Kim smiled, saying, 'Now, I don't mind spending money on Tiny Ping.'
The stock price of SAMG Entertainment increased by 149%, rising from 12,730 won at the beginning of this year to 31,700 won as of the 21st. The recent strength in the stock price is attributed to improved performance. SAMG Entertainment posted an operating profit of 9 billion won in the fourth quarter of last year, marking a turnaround from a loss compared to the previous year. Annual revenue rose 22.4% from 95.1 billion won to 116.4 billion won, while the fourth-quarter operating loss decreased from 9.4 billion won the previous year to 6.1 billion won last year.
SMAG Entertainment, established in 2000, is a first-generation animation corporation that owns copyrights to Tiny Ping, Mini Special Forces, and Wish Cat.
The company significantly restructured its revenue model last year. While maintaining sales of products like MD, it shifted its focus from product and content production to license sales. As a result, sales from products (from 900 million won to 400 million won) and content production (from 3.3 billion won to 1.6 billion won) decreased compared to the previous year, but license revenue soared from 11.2 billion won to 21.2 billion won. Product sales grew significantly from 77.3 billion won to 89.4 billion won. The number of licensing contracts signed also rose by 65% compared to the previous year, totaling 127 contracts last year.
In the existing domestic animation market, if an IP succeeded, it was merely rented out for toys or kids' cafes, receiving royalties like 'Pororo' or 'Baby Shark.' However, SAMG Entertainment is broadening its domain by expanding from planning and producing animations to establishing its own toy planning team, producing performances, and operating its own mall, solidifying its revenue base. This is why it is taking a different path from other child animation companies that showed explosive growth for a moment only to be forgotten.
This year, the company plans to expand its target age range and broaden the global reach of its IP. The company stated, 'We will leap into a super IP that encompasses both the existing target of ages 4 to 7 and teenagers, as well as the MZ generation (those born between 1980 and 2000).' Collaborating with various industries aligns with SAMG Entertainment's strategy of 'expanding the target age range' this year.
To this end, SAMG Entertainment has released a limited edition in collaboration with the natural skincare line 'Gudak' by the cosmetics brand CLIO, and is pushing for a collaboration with the new girl group HAATZ from SM Entertainment for 'Catch! Tiny Ping' in the first half of this year.
Industry insiders expect that SAMG Entertainment will enhance profitability by continuously expanding the 'Tiny Ping universe.' There are also analyses comparing SAMG Entertainment's growth strategy to that of the Pokémon Company in Japan, which manages the globally renowned 'Pokémon' related IP.
However, at the end of this month, employees' stock options will be released into the market, and some securities firms are moving to prevent 'debt investment' after the rapid rise in stock prices, which poses a burden on the soaring stock.
Due to the exercise of stock options by employees, 180,000 shares of SAMG Entertainment will be newly listed on the 24th of this month. This accounts for 2.1% of the total shares (8,590,930 shares), with an exercise price of 5,600 won per share. Given that this is one-fifth of the current stock price, if significant realized gains are released all at once after listing, the stock price may fall.
As speculative trading increased following the surge in SAMG Entertainment's stock price, some securities firms are also moving to block 'debt investment.' KB Securities classified SAMG Entertainment as a stock that cannot be purchased on margin starting from the 19th and raised the margin deposit rate for margin trading from 40% to 100%. As of the 21st, the balance of SAMG Entertainment's margin trading was 5.145 billion won, having increased nearly 2 billion won just this year.
Nevertheless, analysts predict that SAMG Entertainment's stock price will rise in the long term. This year's consensus forecast for performance is expected to increase sales by 21% compared to last year, reaching 140.6 billion won, with operating profit turning positive at 17.6 billion won.
Kim Seong-ho, a researcher at Hanwha Securities, stated, 'This year's price-to-earnings ratio (PER) for SAMG Entertainment is 19.7 times, and next year it will be 13.1 times,' adding, 'This places it in a state of undervaluation compared to major corporations in the global character IP field such as Bandai Namco, Sanrio, and Walt Disney, which are at 29.7 times.'