April 25, 2024
Retail & Consumer
[EQUITIES] ‘CJ E&M hurt by Chinese regulation on hallyu’
[THE INVESTOR] CJ E&M has been weakened by the Chinese government’s reported ban on hallyu contents, said HMC Investment Securities on Nov. 25, lowering the target price to 77,000 won (US$65.15) from 90,000 won.
“The negative effect is limited as the share of exports to China is not large and the bans have not been officially confirmed, but it is indeed an unfavorable factor,” said analyst Hwang Seong-jin.
Its movie business has been slow this year, as its all-star cast “Asura: The City of Madness” failed to break even, while the competition is further intensifying. “The tide will change next year at the earliest,” said the analyst adding that “its loss from its movie fund that matures soon will be reflected in the fourth quarter.”
The outlook for the entertainment arm of CJ Group is still positive as “it continues to strengthen its advantages in contents and channel power,” said Hwang.
The fact that Netmarble Games and Studio Dragon -- whose 27.6 percent and 91.2 percent stakes, respectively, are owned by CJ E&M -- are going public also helps boost the company’s value, said the analyst maintaining a “buy” recommendation.
By Hwang You-mee (glamazon@heraldcorp.com)
“The negative effect is limited as the share of exports to China is not large and the bans have not been officially confirmed, but it is indeed an unfavorable factor,” said analyst Hwang Seong-jin.
Its movie business has been slow this year, as its all-star cast “Asura: The City of Madness” failed to break even, while the competition is further intensifying. “The tide will change next year at the earliest,” said the analyst adding that “its loss from its movie fund that matures soon will be reflected in the fourth quarter.”
The outlook for the entertainment arm of CJ Group is still positive as “it continues to strengthen its advantages in contents and channel power,” said Hwang.
The fact that Netmarble Games and Studio Dragon -- whose 27.6 percent and 91.2 percent stakes, respectively, are owned by CJ E&M -- are going public also helps boost the company’s value, said the analyst maintaining a “buy” recommendation.
By Hwang You-mee (glamazon@heraldcorp.com)
