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August 9, 2018

Result Comment

CJ ENM (035760 KS)

Decent performance



2Q consolidated operating profit in line at W79.2bn

BUY

Price (Aug. 8)

(re-initiate)

3Q consolidated operating profit estimated at W86bn; earnings to stay solid

W236,200

Re-initiate coverage on CJ ENM with a BUY rating and a target price of W270,000

Target Price % variance

W270,000
14.3%

2Q consolidated operating profit in line at W79.2bn

CJ ENM posted its first results after the merger on July 1. Consolidated operating profit came in at W79.2bn in 2Q, meeting our forecast of W79.3bn.

HeeJin Park SeJong Hong

☎

(82-2) 3772-1562 [email protected]

☎

(82-2) 3772-1584 [email protected]

The E&M division delivered solid earnings with sales up 9.2% YoY and operating profit up 25% YoY. Broadcasting exceeded expectations with operating profit increasing 22% YoY to W29.2bn. Ad sales growth of 10.2 YoY also turned out better than expected. Music and cinema showed mixed results. The music division posted sales of W66.5bn (+41.1% YoY) and operating profit of W4.2bn (+114% YoY) on strengthening IP (intellectual property) business. By contrast, the cinema/performance division remained in the red with an operating loss of W3.9bn due to stagnant growth of moviegoers and weak line-up. The commerce division (CJ O shopping) registered standalone operating profit of W40.3bn and consolidated W33.9bn. The standalone figure was in line with estimate (W40.5bn), whereas the consolidated figure was sluggish due to inventory losses at an overseas subsidiary.

  • KOSPI
  • 2,301.45p

  • 783.81p
  • KOSDAQ

Market Cap. Par Value
W5,179.0bn/ US4,543.0mn
W5,000
Outstanding Shares Free Floating Shares 52-Week High/Low
21.9mn
10.3mn(46.9%)
W286,400/W191,100
60-Day Avg. Trading Volume 60-Day. Avg. Trading T/O Foreign Ownership
76,069shrs W18,287mn
20.91%

3Q consolidated operating profit estimated at W86bn; earnings to stay solid

In 3Q, the E&M division’s operating profit is expected to expand up to W33.8bn (+165.7% YoY) thanks to the subsidiary Studio Dragon. The subsidiary’s consolidated operating profit is projected to surge 251.8% YoY to W23.4bn. Sharp growth should be reported in both the top line and profits. Record quarterly earnings may be anticipated in 3Q on recognition of revenues from the drama title Mr. Sunshine. The cinema division is likely to be able to narrow its losses due to favorable seasonality. The commerce division should see standalone operating profit increase 19% YoY to W36.2bn. We forecast CJ ENM’s consolidated operating profit to reach W86bn in 3Q.

Major Shareholders

  • CJ Corp and 5 others
  • 42.71%

  • 9.9%
  • Absolute Performance
  • 3M

  • 6M
  • 4.5%

12M
3M
12.4% 15.9% 14.9% -6.5%
Relative performance

  • to KOSDAQ
  • 6M

Re-initiate coverage on CJ ENM with a BUY rating and a target price of W270,000

12M

We suggest a target price of W270,000 for CJ ENM, reflecting the effect of the merger and the value of individual business units. We recommend a BUY rating in view of: 1) robust broadcasting growth backed by advertising and copyrights (2018F operating profit +91.7% YoY); 2) stable profits generated by CJ O Shopping; and 3) expanding market cap. of Studio Dragon.



Analysts who prepared this report are registered as research analysts in Korea but not in any other jurisdiction, including the U.S. Please see Analyst certification and important disclosures & disclaimers at theendof this report.

  • Year to Dec.
  • Sales

(W bn)

1,095.9 1,136.5 1,174.0 1,243.5 1,338.9

OP
(W bn)

144.9 157.5 163.8 178.4 192.4

Pre-tax (W bn)

44.8
158.7 174.0 184.4 195.6

NP
(W bn)

16.1
128.2 132.9 133.4 142.3

EPS
(Won)

2,587
20,621 21,389 21,459 22,894

Growth
(%)

(73.4) 697.0
3.7

BPS
(Won)

  • PER EV/EBITDA
  • PBR

(X)

1.5 1.8 1.6 1.4 1.3

ROE Net Debt to Equity
(X)

63.0 11.2 11.0 11.0 10.3

  • (X)
  • (%)
  • Ratio (%)

2016 2017 2018F 2019F 2020F
109,908 129,150 147,628 165,886 185,385
5.6 7.8
28.7 26.2 24.2

  • 2.4
  • (19.0)

17.3 15.5 13.7 13.0
(13.8) (21.3) (26.0) (28.4)
0.3 6.7

Source: Company data, Shinhan Investment

1

CJ ENM

Result Comment

2Q18 results (IFRS consolidated)

(bn KRW, %)

Sales OP NP OPM NPM

2Q18P

1,049.0
79.2 73.8
7.8

2Q17

977.6
88.3
440.0
9.6

YoY

7.3
(10.4) (83.2)

1Q18

1,031.7
89.9 96.4
9.0

QoQ

1.7
(12.0) (23.4)

SHIC Consensus

  • 1,074.2
  • 1,044.5

83.9 69.4
8.4
79.3 61.2
7.9

  • 7.3
  • 47.9
  • 9.6
  • 6.1
  • 7.0

Source: Company data, Shinhan Investment Corp.

Earnings forecast revision (IFRS consolidated)

Before
2018F

4,410.6
338.8 274.6
8.4

After
2018F

4,388.8
349.8 315.7
8.6

Change (%)
2018F

(0.5)
3.3
14.9

(bn KRW, %)

Sales OP

2019F

4,721.1
397.1 320.0
9.3

  • 2019F
  • 2019F

(0.1)
5.1
4,716.9
417.5 343.5
9.8

  • NP
  • 7.3

OPM

  • NPM
  • 6.8
  • 7.5
  • 7.8
  • 8.0

Source: Company data, Shinhan Investment Corp. Note: 1) Earnings forecast comparison between post-merger entity and revision made after the 2Q earnings release
2) For the newly merged entity, we believe it is more important to check revised earnings forecasts and quarterly earnings projections provided below than changes in before and after figures.

Quarterly earnings (K-IFRS consolidated)

  • (bnKRW,%YoY,%)
  • 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18P 3Q18F 4Q18F 1Q19F 2Q19F 3Q19F 4Q19F 2018F 2019F 2020F

  • Sales
  • 940.6 988.7 980.8 1,100.0 1,041.2 1,049.0 1,095.7 1,202.9 1,100.3 1,175.9 1,156.9 1,283.9 4,388.8 4,716.9 4,978.5

394.2 425.4 440.1 490.4 476.5 464.4 530.1 579.5 523.5 578.6 578.8 638.5 2,050.4 2,319.4 2,505.0 285.7 332.1 317.2 359.1 340.4 361.9 381.6 413.6 374.2 451.1 409.5 454.2 1,497.5 1,689.0 1,809.4
CJ E&M Broadcasting

  • Cinema
  • 56.5

52.0
44.5 48.7
47.6 75.3
50.0 81.3
65.6 70.6
36.0 66.5
72.6 75.9
77.7 88.1
82.8 66.5
49.2 78.2

  • 79.6
  • 80.3 251.8 291.9
  • 300.3

  • 395.4
  • Music/performance
  • 89.6 104.1 301.1 338.5

  • CJ O Shopping (consolidated)
  • 546.4 563.4 540.7 609.6 564.7 584.6 565.7 623.4 576.8 597.3 578.1 645.3 2,338.4 2,397.5 2,473.5

274.9 290.4 259.0 312.1 272.4 283.9 267.7 319.2 282.2 292.6 276.6 339.6 1,143.2 1,191.0 1,256.8 275.2 275.7 278.2 290.8 286.5 291.3 291.1 295.3 288.2 294.4 294.4 296.8 1,164.2 1,173.8 1,183.0
Commerce (net sales) CJ Hello

  • Others/consolidated adjustments
  • (3.7)

78.8 23.4 37.8 17.6 85.2
9.7
(2.8) 88.4 23.6 45.7 19.1 94.9
8.4
3.5
61.0 12.7 29.8 18.5 67.5
6.7
6.7
62.1
3.5
5.8
90.0 34.5 42.3 13.1 96.5 10.7 20.9
3.3
9.4
79.2 29.5 33.9 15.7 73.8
6.1
6.8
86.0 33.8 35.4 16.7 70.0 11.7 20.4
4.6

  • 8.9
  • 6.4
  • 10.2
  • 7.1
  • 9.0
  • 30.9
  • 32.7
  • 33.7

  • OP
  • 94.7 103.6 115.2
  • 91.8 106.9 349.8 417.5 446.6

  • E&M
  • 33.0

44.2 17.5 75.4
9.4
41.2 45.8 16.7 87.7
5.7
56.2 41.7 17.3 94.5 12.1 24.6
2.2
37.3 37.3 17.2 76.1
5.6
39.8 130.9 174.5 187.1

  • 48.1 155.9 172.9 184.8
  • Commerce
  • 41.1

17.6 68.6
3.9

  • CJ Hello
  • 19.0
  • 63.0
  • 70.1
  • 74.6

  • NP
  • 85.2 315.7 343.5 367.2

  • Sales growth
  • 6.7

10.2
3.5
9.4
17.2
3.5
7.5
13.1
2.5
5.5 8.0 3.2 5.5 0.8 7.0 7.2 6.9 6.4 6.9 9.0 7.4

  • CJ E&M
  • 25.7

0.5
19.1
1.5
16.2
0.1

  • 0.3
  • 9.2
  • 18.2

2.3

  • 9.9
  • 9.2

  • CJ O Shopping (consolidated)
  • 7.0
  • 3.8
  • 2.1
  • 2.2

Commerce (net sales) CJ Hello

  • 4.1
  • 7.2
  • 0.4
  • 3.1
  • (0.9)

4.1
(2.2)
5.6

  • 3.4
  • 2.3
  • 3.6
  • 3.1
  • 3.3
  • 6.4
  • 0.6
  • 4.2

(0.8) 15.4
162.2
6.6
(1.6) 26.3

  • (0.7)
  • 11.2
  • 4.7
  • 1.5
  • 0.6
  • 1.1
  • 1.1
  • 0.5
  • 4.0
  • 0.8

OP growth E&M

  • 14.5 208.8
  • 14.2 (10.5)

47.6 12.0 (25.7)

  • 40.9
  • 52.4
  • 15.2

19.4
8.1
45.5 90.5 23.0
9.8

  • 6.8
  • 12.9
  • 20.5
  • 19.3

33.3 10.9 11.3
8.8

  • 67.2 316.3
  • 83.4

(14.9)

  • 25.0 165.7 855.8
  • 10.3

5.3
20.4 107.2
8.8 1.0 8.8 (13.5)
Commerce CJ Hello
43.7
(20.7) 24.1
8.9

  • 12.4
  • 19.0

(9.7)
3.7
7.7
(1.0)
9.9
(26.2)
14.1
8.4

  • (22.0)
  • TP (25.4) (17.7)

13.1 (22.2)
27.1 (9.1)
9.4
2.8
NP growth OPM

  • 12.9 158.0
  • 28.1

9.8

  • 8.7
  • 13.0
  • (0.2)

  • 8.0
  • 6.2

6.9
5.6 6.2
8.6 9.3
7.5 7.0

  • 7.8
  • 7.9
  • 7.9
  • 8.3

6.6
8.9

  • NPM
  • 9.1
  • 9.6
  • 6.4
  • 6.3
  • 8.0
  • 8.0
  • 6.6
  • 7.2
  • 7.3

Source: Company data, Shinhan Investment Corp. Note: 1) CJ O Shopping and CJ E&M merged on July 1, 2018
2) Quarterly earnings before 2Q18 based on the simple sum of SHIC estimates by business; other operations/consolidated adjustments not reflected, figures may differ from IR data 3) As for full-year 2018, 1Q is based on SHIC estimates and 2Q-4Q based on the newly merged entity

2

CJ ENM

Result Comment

Valuation

  • (bn KRW)
  • Business value
  • Remarks

  • Broadcasting
  • A. 25% discount to Studio Dragon’s market cap.; other mainstay

operations valued atW800bn
Considering faster ad sales growth vs. terrestrialbroadcasting
2,282.9

Cinema/performance Music
258.2 415.6
B. Market cap. of Showbox C. 25x operating profit D. 11x 12MF profit
Considering low profitability vs. high market share Reflecting rapid improvement in profitability

  • Reflecting consolidated profit/loss
  • Commerce
  • 1,495.5

Combined business value of media & retailoperations
E = A + B+ C + D
4,452.2

Netmarble (game) CJ Hello (cable channel) Combined stake value Total business value Net debt
2,026.7
915.0
F. 25% discount to valueof stakein Netmarble (22.1% equitymethod) G. TargetPBR of 0.7x applied to 2018F BPS
2,941.7 7,393.9 1,469.1 5,924.8 270,215 270,000 236,200
14.3
H = F + G I = E+ H

  • J. Based on newly merged entityin 2Q18 (appraisalrights reflected)
  • Reflecting CJ Hello’s debt

Total enterprise value Valuepershare (KRW) Targetprice (KRW) Currentprice (KRW) Gap (%)
K = I + J Total outstanding shares 21,926,384 Previous targetprice W274,000 August 8 close
Excluding treasuryshares

Source: Shinhan Investment Corp.

2018F EPS growth and PER vs. domestic/overseas contents providers
2018F PBR and ROE vs. domestic/overseas contents providers

  • PER (x)
  • PBR (x)

  • 6
  • 40

30 20 10
0

News Corp
Jcontentree

CJ ENM

Walt Disney

4

2

0

Walt Disney

CJ ENM

Viacom

  • Viacom
  • News Corp

CBS

ROE(%)
30
EPSgrowth (%)

SBS

  • -20
  • -10
  • 0
  • 10
  • 20
  • 30
  • 0
  • 10
  • 20

  • Source: Bloomberg consensus, Shinhan Investment Corp.
  • Source: Bloomberg consensus, Shinhan Investment Corp.

Valuation of domestic and overseas contents providers

  • Company
  • Market cap.
  • 2018F

PER
2019F

  • PER
  • Sales
  • EPS
  • PBR
  • EV/

EBITDA

  • ROE
  • Sales
  • EPS
  • PBR
  • EV/

EBITDA

9.3

ROE

  • (%, x)
  • (bn KRW) growth growth
  • growth growth

  • CJ ENM
  • 5,179.0

782.5
73.1 17.9 21.4
7.1
(13.8) 250.0 127.4
25.4 97.6 25.5
3.9
13.0 32.5 15.2 16.3
110.9
10.1
7.2
4.3 4.8 0.8 3.8
29.5
7.1 1.6 0.9
10.3 11.0
6.6
22.7 14.0
5.6
20.6
9.2
(22.9)
3.0
16.9 31.6 14.2 15.4 71.4
9.0
3.5 4.2 0.8 3.3
21.1
5.2 1.3 0.9
22.9 14.2
5.8
Jcontentree SBS
9.5

  • 346.8
  • (11.5)

2.7

  • 6.9
  • 6.1

Walt Disney (U.S.) Netflix (U.S.) CBS (U.S.)
194,172.7 171,607.2
22,434.0 13,358.8
9,920.7
11.0 75.9
8.9
25.5 26.7 84.9 23.8
2.4

  • 5.7
  • 10.9

52.1
8.3
22.4 30.1 64.7 21.3
2.2
35.8
7.0
24.5
7.0
55.2 12.1

  • 8.4
  • Viacom (U.S.)

News Corp (U.S.)
(2.7) 10.4

  • 7.3
  • 3.6
  • 6.6
  • 6.9

  • 20.6
  • 34.9
  • 7.0
  • 17.0
  • 2.5
  • 34.0
  • 5.3

Source: Bloomberg consensus, Shinhan Investment Corp.

3

CJ ENM

Result Comment

2018F EPS growth and PER vs. domestic/overseas retailers

2018F PBR and ROE vs. domestic/overseas retailers

PER (x)

30

PBR (x) 2.0

Seven & i

Holdings

Walmart

20

GS Retail

GS Retail

Hanwha

Galleria Timeworld

Nordstrom

GS Home

E-mart

Shinsegae

Hyundai Home

1.0

Shopping

Shinsegae
Shopping

Network

10
0

CJ ENM

E-mart

Hyundai Home Shopping

Network

QVC

Macy's

GS Home Shopping

Hyundai

Department Store

Hyundai

Department Store

Lotte Shopping

ROE(%)
20

EPSg rowth (%)
40.0 60.0

0.0

  • 0
  • 5
  • 10
  • 15

  • (40.0)
  • (20.0)
  • 0.0
  • 20.0

  • Source: Bloomberg consensus, Shinhan Investment Corp.
  • Source: Bloomberg consensus, Shinhan Investment Corp.

Valuation of domestic and overseas retailers

  • Company
  • Market cap.
  • 2018F

PER
2019F

  • PER
  • Sales
  • EPS
  • PBR
  • EV/

EBITDA

  • ROE
  • Sales
  • EPS
  • PBR
  • EV/

EBITDA
ROE

  • (%, x)
  • (bn KRW) growth growth
  • growth growth

Department store
LotteShopping HyundaiDepartmentStore Shinsegae
5,722.8 2,298.1 3,160.3
193.5
(0.7) (8.2) 40.0
3.9
TP
13.8 45.1 TP
41.9
8.3
0.5 0.6 0.9 0.6 2.3 2.5 9.2 0.8 0.5 1.1 0.9 4.3 1.1
-
5.2 6.3 9.8 7.9 6.5 5.6 6.5
12.1
5.1 3.8 3.4
10.3
7.2 8.2
-
1.1 7.1

  • 2.3 235.4
  • 12.5

7.9
0.5 0.5 0.8 0.6 2.1 1.9 7.3 0.8 0.5 1.1 0.8 3.5 1.0
-
4.2 5.6
10.0
5.7 6.4 6.2 6.5
11.1
5.4 3.5 2.7 9.3 6.4 7.8
-
3.7

  • 7.0
  • 7.4
  • 5.2

12.2 10.9 17.9 10.8 17.2 85.1 16.6
8.9

  • 7.5
  • 11.1
  • (5.5)
  • 13.0

13.1 13.5 10.3 14.7 34.4 58.5 10.0
8.7
6.7
HanwhaGalleriaTimeworld Kohl’s

  • 6.6
  • 4.3 (16.7)
  • 4.8

13,671.6 13,534.7
9,553.1 4,928.3
844.3

  • 2.2
  • 11.4

21.2 (6.7)
13.1 22.7 56.5
1.0
3.1 1.3 1.7
29.3
1.2
15.9 17.3 51.2
2.3

  • Macy’s
  • (3.7)

  • 4.9
  • Nordstrom
  • 22.6

IsetanMitsukoshi J.C.Penney

  • 1.2 (106.5)
  • (5.0) 1554.8

(2.4) (81.4)
3.6 (11.2)

  • (0.3) 175.0
  • 0.0
  • 0.8

  • Home
  • GSHomeShopping

HyundaiHomeShopping Network CJENM
1,296.8 1,380.0 5,179.0
421.2
(2.7) (3.5)
45.1 52.1
12.9
9.4
11.0

  • 9.8
  • shopping
  • 9.9
  • 6.6
  • 13.0

73.1 (13.8)
2.8 5.8
36.2 (38.3)
13.0
9.5
22.7 12.7 16.6 12.4 23.2 34.7
6.8

  • 20.6 (22.9)
  • 16.9

9.2
22.9 11.7 20.2 12.7 23.4 30.4
7.5

  • QVC
  • 3.0

2.8
2.9
12.1 30.4
2.8

  • Happigo
  • 11,566.4
  • 11.7

45.4 18.6 17.5 17.3 21.3 43.0 30.6 19.5 14.7 20.2 32.1 17.4
10.4 34.8 18.1 15.6 14.9 18.7 34.8 28.1 23.2 12.3 18.9 29.1 15.5

  • momo.com
  • 6,181.8 184.4 367.2
  • 4.4

4.3 5.5 1.2 1.6 2.5 8.6 2.3 0.7 3.5 7.7 4.0
19.5 10.6
7.7
3.9 4.2 4.3 1.1 1.6 2.4 8.3 2.4 0.7 3.4 6.7 3.7

  • Convenience BGFRetail
  • 1,020.6

2,869.1
23.9
-
16.6
-
15.7
8.2 8.6 6.6
15.7 14.3
6.5 9.0 9.1
16.4
8.2
13.7
7.5 8.1 6.3
11.8 13.4
6.7 8.0 9.3
15.3
8.3

  • store
  • GSRetail
  • 12.2

16.6 18.2 16.0
8.8

  • 7-Eleven
  • 2,517.9
  • 7.1

3.5
-
15.8 87.2
-
6.0
FamilyMart PresidentChain Lawson
40,566.7 13,730.0 11,897.7
6,749.5

  • 8.1
  • 10.3

(0.7)
5.2
8.6

  • 5.8
  • 6.9

9.8 (65.7) 4.1 (26.3) 5.5 (32.7)
23.7 11.9
5.0
29.0 10.4
5.7
Discount store

  • E-Mart
  • 8.2
  • 7.3

  • Walmart
  • 6,230.2
  • 7.9
  • 19.5

  • 7.3
  • CostcoWholesale

Target
296,491.6 109,880.9
49,074.4
3.0 9.3 3.4
2.3
19.9 (6.0)
16.6 25.5 23.4

  • 2.8
  • 17.6

24.5 24.1

  • 7.0
  • 10.2

  • 12.8
  • YounghuiSuperstores
  • 2.2

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    Experience Korea Experience Courtesy of CJ ENM ⓒ To Higher Heights K-drama’s Global Boom Falling For Hallyu Whether by choice or quarantine due to The dramas “Autumn in My Heart” (2000) and COVID-19, homebodies worldwide are discovering “Winter Sonata” (2003) were the initial triggers of gems of Korean dramas, especially on Netflix. From Hallyu, or the Korean Wave. The success formula for “Crash Landing on You” to the “Reply” series, works K-dramas at the time was simply romance; doctors feature themes of warm romance to preternatural fell in love in a medical drama while lawyers did fantasy and gripping crime thrillers, and are apparently in a legal drama. Bae Yong-joon, the lead actor in good enough to make international viewers overlook “Winter Sonata,” grew so popular in East Asia that the nuisance of subtitles. Many K-dramas have also he became the first Korean celebrity to be featured inspired remakes around the world, signaling even in the textbooks of Taiwan and Japan. His nickname grander prospects for the industry. “Yonsama” earned from his Japanese fans cemented his overwhelming popularity. A decade after “Autumn” 30 Experience Korea Experience was broadcast in Korea, the Chinese remake “Fall in Love (一不小心 上你)” came out in 2011. Another K-drama,爱 “I’m Sorry, I Love You” (2004), spurred a Chinese remake as a film and a Japanese one as a series. “Temptation to Go Home (回 家的誘惑),” the 2011 Chinese remake of the 2008 K-drama “Temptation of Wife” (2008), starred Korean actress Choo Ja-hyun as the lead in her China debut.
  • FTSE Korea 30/18 Capped

    FTSE Korea 30/18 Capped

    2 FTSE Russell Publications 19 August 2021 FTSE Korea 30/18 Capped Indicative Index Weight Data as at Closing on 30 June 2021 Index weight Index weight Index weight Constituent Country Constituent Country Constituent Country (%) (%) (%) Alteogen 0.19 KOREA Hyundai Engineering & Construction 0.35 KOREA NH Investment & Securities 0.14 KOREA AmoreG 0.15 KOREA Hyundai Glovis 0.32 KOREA NHN 0.07 KOREA Amorepacific Corp 0.65 KOREA Hyundai Heavy Industries 0.29 KOREA Nong Shim 0.08 KOREA Amorepacific Pfd. 0.08 KOREA Hyundai Marine & Fire Insurance 0.13 KOREA OCI 0.17 KOREA BGF Retail 0.09 KOREA Hyundai Merchant Marine 1.02 KOREA Orion 0.21 KOREA BNK Financial Group 0.18 KOREA Hyundai Mipo Dockyard 0.15 KOREA Ottogi 0.06 KOREA Celltrion Healthcare 0.68 KOREA Hyundai Mobis 1.53 KOREA Paradise 0.07 KOREA Celltrion Inc 2.29 KOREA Hyundai Motor 2.74 KOREA Posco 1.85 KOREA Celltrion Pharm 0.24 KOREA Hyundai Motor 2nd Pfd. 0.33 KOREA Posco Chemical 0.32 KOREA Cheil Worldwide 0.14 KOREA Hyundai Motor Pfd. 0.21 KOREA Posco International 0.09 KOREA CJ Cheiljedang 0.3 KOREA Hyundai Steel 0.33 KOREA S1 Corporation 0.13 KOREA CJ CheilJedang Pfd. 0.02 KOREA Hyundai Wia 0.13 KOREA Samsung Biologics 0.92 KOREA CJ Corp 0.11 KOREA Industrial Bank of Korea 0.22 KOREA Samsung C&T 0.94 KOREA CJ ENM 0.15 KOREA Kakao 3.65 KOREA Samsung Card 0.08 KOREA CJ Logistics 0.12 KOREA Kangwon Land 0.23 KOREA Samsung Electro-Mechanics 0.81 KOREA Coway 0.36 KOREA KB Financial Group 1.78 KOREA Samsung Electronics 25.36 KOREA Daewoo Engineering & Construction 0.12 KOREA KCC Corp 0.12 KOREA Samsung Electronics Pfd.
  • Birth and Evolution of Korean Reality Show Formats

    Birth and Evolution of Korean Reality Show Formats

    Georgia State University ScholarWorks @ Georgia State University Film, Media & Theatre Dissertations School of Film, Media & Theatre Spring 5-6-2019 Dynamics of a Periphery TV Industry: Birth and Evolution of Korean Reality Show Formats Soo keung Jung [email protected] Follow this and additional works at: https://scholarworks.gsu.edu/fmt_dissertations Recommended Citation Jung, Soo keung, "Dynamics of a Periphery TV Industry: Birth and Evolution of Korean Reality Show Formats." Dissertation, Georgia State University, 2019. https://scholarworks.gsu.edu/fmt_dissertations/7 This Dissertation is brought to you for free and open access by the School of Film, Media & Theatre at ScholarWorks @ Georgia State University. It has been accepted for inclusion in Film, Media & Theatre Dissertations by an authorized administrator of ScholarWorks @ Georgia State University. For more information, please contact [email protected]. DYNAMICS OF A PERIPHERY TV INDUSTRY: BIRTH AND EVOLUTION OF KOREAN REALITY SHOW FORMATS by SOOKEUNG JUNG Under the Direction of Ethan Tussey and Sharon Shahaf, PhD ABSTRACT Television format, a tradable program package, has allowed Korean television the new opportunity to be recognized globally. The booming transnational production of Korean reality formats have transformed the production culture, aesthetics and structure of the local television. This study, using a historical and practical approach to the evolution of the Korean reality formats, examines the dynamic relations between producer, industry and text in the
  • Studio Dragon(253450.KQ)

    Studio Dragon(253450.KQ)

    Studio Dragon (253450.KQ) Growing into global titan Company Comment │Apr 29, 2019 Despite the absence of new tent-pole dramas in 1Q19, an improvement in the overall quality of Studio Dragon’s drama productions translated into strong overseas sales and higher ad rates for its captive channels. While the launch of multi-season dramas is to create a short-term cost burden, the move should Buy (maintain) benefit the firm over the mid/long term, backed by the expansion of the global OTT market. Given these positives, we continue to offer the play as TP W135,000 (maintain) our top pick for the content sector. CP (19/04/26) W89,900 Sector Entertainment Kospi/Kosdaq 2,179.31 / 741.00 Market cap (common) US$2,175.84mn Outstanding shares (common) 28.1mn Production capacity strengthening 52W high (’18/07/12) W119,800 The broadcasting of low-cost but high-margin productions (eg, romance dramas) low (’18/05/08) W79,600 usually concentrates in 1Q, as the quarter is a low season for TV ads. But, Average trading value (60D) US$12.42mn Dividend yield (2019E) 0.00% despite the absence new tent-pole dramas in 1Q19 (a factor that dampened the Foreign ownership 3.5% firm’s share price), we note that ad rates for Studio Dragon’s captive channels (such as tvN) increased, which implies that the company’s improved production Major Shareholders CJ ENM & 3 others 74.4% capacity has bolstered the competitiveness of its captive channels. Share perf 3M 6M 12M The firm’s improved production capacity is also translating into higher sales.
  • Financial Statements Summary

    Financial Statements Summary

    3Q 2019 Earnings Release Studio Dragon November 7, 2019 Disclaimer This financial information in this document are consolidated earnings results based on K-IFRS. This document is provided for the convenience of investors only, before the external audit on our 3Q 2019 financial results is completed. The audit outcomes may cause some parts of this document to change. In addition, this document contains “forward-looking statements” – that is, statements related to future, not past, events. In this context, “forward-looking statements” often address our expected future business and financial performance, and often contain words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “seeks” or “will”. Our actual results to be materially different from those expressed in this document due to uncertainties. 3Q 2019 Earnings Release TABLE OF CONTENTS 1 3Q 2019 Highlights 2 3Q 2019 Operating Performance º Programing º Distribution º Cost 3 Growth Strategies Appendix We Create New Culture 1 3Q 2019 Highlights <Arthdal Chronicles> <Hotel Del Luna> <Miss Lee> <Watcher> <Mr. Temporary> <The Running Mates> <Love Alarm> (1) Programming Distribution Production Revenue Revenue Revenue Trend W131.2bn w60.8bn w60.0bn 13titles (YoY +6.0%) (YoY +24.4%) (YoY -5.4%) (YoY +5 titles) Note (1) Each quarter includes all titles in progress - 4 - We Create New Culture 12 3Q 2019 Operating Performance Summary 3Q19 Revenue (+6.0% YoY) – Hit a record high, driven by diversified business, premium IP, and expanded lineups OP (-49.2% YoY) – Maintained stable fundamentals amid last year’s high-base <Mr. Sunshine> and BEP of <Arthdal Chronices> 4Q19 Aim to reinforce influence via titles incl.
  • Holdings-Report.Pdf

    Holdings-Report.Pdf

    The Fund is a closed-end exchange traded management Investment company. This material is presented only to provide information and is not intended for trading purposes. Closed-end funds, unlike open-end funds are not continuously offered. After the initial public offering, shares are sold on the open market through a stock exchange. Changes to investment policies, current management fees, and other matters of interest to investors may be found in each closed-end fund's most recent report to shareholders. Holdings are subject to change daily. PORTFOLIO HOLDINGS FOR THE KOREA FUND as of July 31, 2021 *Note: Cash (including for these purposes cash equivalents) is not included. Security Description Shares/Par Value Base Market Value (USD) Percent of Base Market Value SAMSUNG ELECTRONICS CO 793,950 54,183,938.27 20.99 SK HYNIX INC COMMON 197,500 19,316,452.95 7.48 NAVER CORP COMMON STOCK 37,800 14,245,859.60 5.52 LG CHEM LTD COMMON STOCK 15,450 11,309,628.34 4.38 HANA FINANCIAL GROUP INC 225,900 8,533,236.25 3.31 SK INNOVATION CO LTD 38,200 8,402,173.44 3.26 KIA CORP COMMON STOCK 107,000 7,776,744.19 3.01 HYUNDAI MOBIS CO LTD 26,450 6,128,167.79 2.37 HYUNDAI MOTOR CO 66,700 6,030,688.98 2.34 NCSOFT CORP COMMON STOCK 8,100 5,802,564.66 2.25 SAMSUNG BIOLOGICS CO LTD 7,230 5,594,175.18 2.17 KB FINANCIAL GROUP INC 123,000 5,485,677.03 2.13 KAKAO CORP COMMON STOCK 42,700 5,456,987.61 2.11 HUGEL INC COMMON STOCK 24,900 5,169,415.34 2.00 SAMSUNG 29,900 4,990,915.02 1.93 SK TELECOM CO LTD COMMON 17,500 4,579,439.25 1.77 KOREA INVESTMENT 53,100 4,427,115.84
  • The Next Growth Strategy for Hallyu 79

    The Next Growth Strategy for Hallyu 79

    Lee & Kim / The Next Growth Strategy for Hallyu 79 THE NEXT GROWTH STRATEGY FOR HALLYU A Comparative Analysis of Global Entertainment Firms Yeon W. Lee Seoul School of Integrated Science and Technology [email protected] Kyuchan Kim Korea Culture and Tourism Institute [email protected] Abstract Previous policy approaches on Hallyu have been focused on the role of government engagement, particularly in fostering diversity and equal business opportunities for small-and-medium enterprises (SMEs). However, a more strategic approach to the cultural industries should be implemented by carefully examining the role of the private sector, particularly the role of large enterprises (LEs). his is important because LEs have an overarching and fundamentally diferentiated role in increasing the size of industry through their expansive value-creating activities and diversiied business areas. his study focuses on the complementary roles of SMEs and LEs in facilitating the growth of Hallyu by bringing in the perspective of value chain diversiication and the modiied value chain framework for the ilm industry. By conducting a comparative analysis of the global entertainment irms in the US, China, and Japan, this study reveals how LEs in the global market enter and explore new industries within culture and continue to enhance their competitiveness. By forming a business ecosystem through linking their value-creating activities as the platform of network, this study looks into the synergistic role among enterprises of diferent size and scale and suggests that Korea’s policy for Hallyu should reorient toward a new growth strategy that encourages the integrative network of irms where the value activities of LEs serve as the platform for convergence.
  • Voting Disclosure

    Voting Disclosure

    Notices: LGPS Central Limited is committed to disclosing its voting record on a vote-by-vote basis, including where practicable the provision of a rationale for votes cast against management. The data presented here relate to voting decisions for securities held in portfolios held within the company’s Authorised Contractual Scheme (ACS). Meeting Company Name Meeting Type Voting Action Agenda Item Numbers Voting Explanation 20/01/2021 Guotai Junan International Holdings Limited Special All For 04/02/2021 Lenovo Group Limited Special All For 04/03/2021 MMG Ltd. Special Against 1 Apparent failure to link pay and appropriate performance 05/03/2021 CSPC Pharmaceutical Group Ltd. Special Against 11.1 Concerns related to board gender diversity 12 Concerns related to shareholder rights 29/03/2021 China Resources Beer (Holdings) Co. Ltd. Special Against 2 Concerns related to board gender diversity 28/01/2021 Kobe Bussan Co., Ltd. Annual All For 28/01/2021 Park24 Co., Ltd. Annual Against 1.6,1.7 Concerns about overall board structure 19/02/2021 Kansai Mirai Financial Group, Inc. Special All For 20/02/2021 OSG Corp. (6136) Annual Against 2.1 Concerns related to approach to board diversity 25/02/2021 Kewpie Corp. Annual All For 26/02/2021 Hitachi Capital Corp. Special Against 1 Concerns to protect shareholder value 26/02/2021 Mitsubishi HC Capital, Inc. Special All For 09/03/2021 Nippon Building Fund, Inc. Special All For 18/03/2021 Toshiba Corp. Special Against 1 SH: For shareholder resolution, against management recommendation / Shareholder proposal promotes transparency 19/03/2021 Kubota Corp.
  • C NTENT 2018 L

    C NTENT 2018 L

    17-30 SEPTEMBER C NTENT 2018 www.contentasia.tv l www.contentasiasummit.com Sony kicks off new HBO counts down to 7 Oct horror debut AGT season Series goes live with int’l film fest stamp of approval David Foster, Anggun & Jay Park return Folklore: Tatami (Japan) David Foster, Anggun and Jay Park Three international film festivals – includ- Ratanaruang (Samui Song). Sony Pictures Television Networks Asia ing the Toronto International Film Festival Folklore: A Mother’s Love is about a kicked off the third season of Asia’s Got (TIFF) – have given their stamp of ap- single mother and her young son who Talent at the weekend with a Facebook proval to HBO Asia’s original Asian horror discover dirty and underfed children liv- Live judges session at the Pinewood Is- series, Folklore, which premieres on the ing in a mansion’s attic. Returning them kandar Malaysia Studios. All three judges regional service on Sunday, 7 October to their families stirs the wrath of their from last year – David Foster, Anggun and at 10pm. adopted mother, Wewe Gombel. Jay Park – are back, along with hosts Alan The six episodes of the anthology, each Folklore: Pob is about a journalist who Wong and Justin Bratton. helmed by a different director, debuted meets with Thai ghost Pob, who con- The show airs on AXN across Asia in in pairs at three festivals. In addition fesses to a murder. Finally finding an early 2019. to TIFF, which wrapped this weekend, outlet for complaint, Pob explains how The announcement of this year’s judges episodes will screen at Spain’s SITGES the murder happened.
  • Media/Entertainment Rise of Webtoons Presents Opportunities in Content Providers

    Media/Entertainment Rise of Webtoons Presents Opportunities in Content Providers

    Media/Entertainment Rise of webtoons presents opportunities in content providers The rise of webtoons Overweight (Maintain) Webtoons are emerging as a profitable new content format, just as video and music streaming services have in the past. In 2015, webtoons were successfull y monetized in Korea and Japan by NAVER (035420 KS/Buy/TP: W241,000/CP: W166,500) and Kakao Industry Report (035720 KS/Buy/TP: W243,000/CP: W158,000). In late 2018, webtoon user number s April 9, 2020 began to grow in the US and Southeast Asia, following global monetization. This year, NAVER Webtoon’s entry into Europe, combined with growing content consumption due to COVID-19 and the success of several webtoon-based dramas, has led to increasing opportunities for Korean webtoon companies. Based on Google Trends Mirae Asset Daewoo Co., Ltd. data, interest in webtoons is hitting all-time highs across major regions. [Media ] Korea is the global leader in webtoons; Market outlook appears bullish Jeong -yeob Park Korea is the birthplace of webtoons. Over the past two decades, Korea’s webtoon +822 -3774 -1652 industry has created sophisticated platforms and content, making it well-positioned for [email protected] growth in both price and volume. 1) Notably, the domestic webtoon industry adopted a partial monetization model, which is better suited to webtoons than monthly subscriptions and ads and has more upside potent ial in transaction volume. 2) The industry also has a well-established content ecosystem that centers on platforms. We believe average revenue per paying user (ARPPU), which is currently around W3,000, can rise to over W10,000 (similar to that of music and video streaming services) upon full monetization.
  • Investor Relations 2019

    Investor Relations 2019

    Investor Relations 2019 Citi Conference, March 2019 Disclaimer This financial information in this document are consolidated earnings results based on K-IFRS. This document is provided for the convenience of investors only, before the external audit on our 4Q 2018 and 2018 financial results is completed. The audit outcomes may cause some parts of this document to change. In addition, this document contains “forward-looking statements” – that is, statements related to future, not past, events. In this context, “forward-looking statements” often address our expected future business and financial performance, and often contain words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “seeks” or “will”. Our actual results to be materially different from those expressed in this document due to uncertainties. Investor Relations 2019 TABLE OF CONTENTS I Studio Dragon at a Glance II 2018 Earnings Release III 2019 Growth Strategy Appendix I Studio Dragon at a Glance 1. Highlights 2. Comprehensive Studio 3. Studio Dragon at a Glance 4. Studio Centered Industry Change 5. No.1 Studio in Korea We Create New Culture 1 Highlights DOMESTIC M/S REVENUE GROWTH INTL. REVENUE CREATORS 27% 32% 29% 158People +4Titles +64.1% +16.0% +11.9% +1.6%p 110.2 26 51.8 40.1 5.0 35.9 44.7 22 67.2 3.4 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 Production Trend International Revenue Domestic VOD Payment to Creators Viewer Rating (1) (Titles) (Wbn) (Wbn) (Wbn) (%) Note (1) Refers to household average viewer ratings; Excludes Olive’s series <Dear My Room> 5 | Investor Relations 2019 – I.
  • Studio Dragon (253450)

    Studio Dragon (253450)

    Studio Dragon (253450) Margins Continue to Expand Danny Lee Yonghyun Choi Internet & Games / Media Research Associate +82-2-6114-2960 +82-2-6114-2915 August 6, 2021 [email protected] [email protected] Maintain BUY, target price of We maintain BUY and our TP of KRW127,000 on Studio Dragon. There were no significant KRW127,000 revisions to 2021E-22E OP. Our DCF-based TP (7.41% WACC; 2.1% TGR) corresponds to 69.0x 12m fwd P/E. Robust margins noteworthy Studio Dragon reported 2Q21 revenue of KRW106.0bn (-34.3% YoY) and OP of KRW13.8bn (-18.2% YoY), missing the market consensus by 9.7% and 8.5%, respectively. Programming revenue plunged 56.9% YoY because of a dearth of non-captive sales (only five titles aired) and a high comparison base related to the airing of The King: Eternal Monarch last year. Meanwhile, Distribution revenue held up relatively well, sliding just 10.8% YoY thanks to iQiyi original My Roommate Is a Gumiho and Netflix-bound sales of the television shows Vincenzo, Navillera and Mine; an uptrend in ASP uptrend also supported Distribution revenue. Despite cost increases resulting from a rise in advanced sales, COGS-to-revenue ratio declined 5.7pp YoY and OPM improved +2.6pp YoY on strengthening Distribution revenue. Earnings to rebound in 2H21 We expect earnings to rebound in 2H21, driven by increased production for Tving originals and improved Distribution revenue amid the normalization of Programming revenue. Not only is Distribution revenue trending up, sales of old libraries are sustaining stable growth, improving around 30% YoY.