[Edaily Reporter Kwon Oh Seok ] Hana Securities announced on the 7th that it is maintaining its “Buy” investment rating and target price of 37,000 won for Studio Dragon Corporation(253450).

Lee Ki-hoon, an analyst at Hana Securities, stated, “The stock price surged following the release of second-quarter earnings that met consensus estimates; this is believed to reflect not only the stock’s attractive valuation but also the strong turnaround in the business conditions of its parent company, CJ ENM CO., Ltd.” "While the parent company’s slump due to production cost issues had been leading to negative earnings growth and valuation downgrades for the company, the firm mentioned the possibility of a rebound in TV advertising in the second half of the year, driven by Tving’s high growth and developments at JTBC," he analyzed.
He noted, “The rise in ENM’s advertising revenue and profits is a crucial momentum driver, as it could soon translate into increased production budgets and expanded drama programming for Studio Dragon Corporation,” and added, “The current stock price is trading at a 2027 forward P/E ratio of 14x, marking the first time in a very long while that the stock is undervalued.”
Previously, second-quarter revenue and operating profit came in at 145.3 billion won (+27% year-over-year) and 15.4 billion won (return to profit), respectively, in line with the consensus estimate of 14.8 billion won. The number of episodes aired rose to 77 (50 on TV, 27 on OTT) compared to the same period last year (36), reflecting the inclusion of *Secret Audit* and TVING Originals such as *Yumi’s Cells 3* and *The Legend of the Mess Sergeant*. The analyst explained, “Although overseas pre-sales were lacking, the success of TVING Originals was positive, and cost savings from the expanded use of AI were also reflected.”
He added, “Starting in the second quarter, we decided to reflect performance trends more reasonably by changing the amortization period for distribution rights; as a result, amortization expenses actually increased by 800 million won in the second quarter. For general dramas, amortization previously spanned 18 months with 70% recognized within the first 13 months, but after the change, the period was extended to 48 months, with 70% recognized within the first 7 months.”
Furthermore, he added, “Even if major productions are released in the future, rather than having an impact spread over a single year as in the past, a significant portion of the amortization expense will be reflected over two quarters; conversely, since the remainder will be spread out over a longer period, we expect to reduce the burden of amortization expenses.” He also noted, “For works pre-sold to OTT platforms, we have decided to accelerate amortization from the previous flat-rate amortization over six months to four months.”