MERITZ Securities analyzed on the 25th that Studio Dragon's performance in the first quarter of this year is expected to fall below market expectations, but performance growth is anticipated due to the resumption of Wednesday-Thursday dramas and business expansion through Japanese dramas. It adjusted the target stock price upward by 9.3% from the previous 54,000 won to 59,000 won, presenting a 'buy' investment opinion. The closing price for Studio Dragon on the previous trading day was 43,800 won.
MERITZ Securities projected that Studio Dragon's consolidated revenue and operating profit for the first quarter of this year would be 119.5 billion won and 5.6 billion won, respectively, down 37.8% and 74.0% compared to the same period last year. The number of airing episodes in the first quarter is expected to total 59, including 'The Queen Who Crowns,' 'My Dearest Nemesis,' 'When the Stars Gossip,' and 'Study Group,' which is a decrease of 12 episodes from last year.
Researcher Jeong Ji-soo at MERITZ Securities noted, "Although the base is high due to the success of the drama 'The Queen of Tears' in the first quarter of last year, the drama 'When the Stars Gossip,' which had a large production cost, failed to succeed and had a negative impact on profitability."
This year, consolidated revenue and operating profit are estimated to grow by 14.3% and 24.2%, respectively, to 628.6 billion won and 45.2 billion won compared to the previous year. While the annual airing episodes decreased from 341 in 2023 to 218 last year, they are expected to recover to 333 this year.
Researcher Jeong stated, "With the resumption of Wednesday-Thursday dramas starting in July, the number of airing episodes in the second half (222 episodes) is expected to double compared to the first half (111 episodes), allowing for gradual growth in scale and improvement in profits." He emphasized that the resumption of Wednesday-Thursday dramas after two years has significant meaning in terms of cost efficiency through the casting of new actors and the creation of additional revenue.
Continuing, Researcher Jeong said, "The upcoming Japanese remake 'Marry My Husband' in the second quarter is positive in that it indicates the strategy that the company has prepared to expand its presence based on the domestic system will be executed."