Samsung Securities lowered its target price for CJ ENM stocks to 47,000 won, a 33.8% reduction from the 71,000 won target set on May 11. The brokerage forecast CJ ENM's Q2 operating profit at 27 billion won, below the market consensus of 34.4 billion won, citing declining TV advertising revenue and delayed recovery in the content business. Despite growth in Tving, the company's domestic OTT service, traditional media platform challenges continue to weigh on overall performance.
Samsung Securities Cuts CJ ENM Target Price to 47,000 Won
Samsung Securities reduced its target price for CJ ENM to 47,000 won while maintaining a 'buy' rating. The downward revision of 33.8% came just two months after the brokerage set a target of 71,000 won on May 11. The adjustment reflects concerns over the pace of recovery in advertising and content businesses.
CJ ENM Q2 Operating Profit Forecast at 27 Billion Won
CJ ENM's Q2 performance is expected to show revenue of 1.3062 trillion won and operating profit of 27 billion won. This represents a 0.5% decline in revenue and a 5.5% decrease in operating profit compared to the same period last year. The operating profit forecast falls short of the market consensus of 34.4 billion won.
Tving Reaches 9.697 Million Monthly Active Users
Tving recorded 9.697 million monthly active users (MAU) as of last month, maintaining its position as the second-largest OTT service in South Korea after Netflix. The platform's profitability is expected to improve to near break-even levels, driven by successful original content, the Korean Baseball Organization (KBO) season effect, and expanded partnerships. Tving set a target of 100 billion won in advertising revenue for this year. However, a personal information leak incident that occurred early last month may impact subscriber metrics in the near term.
TV Advertising Revenue Expected to Decline 19.2% in Q2
TV advertising revenue is forecast to decrease 19.2% year-over-year in Q2. The decline in the traditional media platform business cannot yet be fully offset by Tving's growth, indicating that more time is needed for the digital business to compensate for legacy media challenges.
Fifth Season Delivers Three Titles in Q2
Fifth Season, the U.S. content studio acquired by CJ ENM in 2022, is expected to deliver only three film and drama titles in Q2. The absence of high-margin series deliveries means the studio will continue to record losses. In the music division, expansion of proprietary artist IP is viewed positively, but profitability is expected to decline due to investments related to Mnet Plus and debut costs for new artists.
Choi Min-ha, a researcher at Samsung Securities, stated, "The growth momentum centered on digital businesses such as Tving remains valid, but the pace of recovery in advertising and content businesses is key."
FAQ
What target price did Samsung Securities set for CJ ENM stocks?
Samsung Securities set a target price of 47,000 won for CJ ENM, reducing it by 33.8% from the previous target of 71,000 won announced on May 11.
How many monthly active users does Tving have?
Tving recorded 9.697 million monthly active users (MAU) as of last month, ranking second among domestic OTT services after Netflix.
