April 27, 2024

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[THE INVESTOR] CJ Hello will enjoy synergy effects when it acquires D’Live, the third-largest cable network operator by subscribers, said KB Investment on Aug. 24, maintaining a “hold” recommendation and 7,900 won (US$7.02) target price.

The firm has recently begun conducting M&A due diligence on D’Live seeking to acquire the company. Price remains a major issue, but when the deal goes through, CJ Hello will be able to provide its services to most of the Seoul metropolitan area. It can strengthen its leverage in commissions as well as offer own contents, said analyst Kim Jun-seob.

Its revenue in the second quarter rose 5.6 percent on-year to 291.3 billion won, as average revenue per user rebounded in all sectors, including cable television, internet and affordable mobile phones. However, the fact that it will not be easy to improve the cost structure, due to rise in fees for using programs and marketing costs to attract users of expensive plans, risks still remain, he added.

By Hwang You-mee (glamazon@heraldcorp.com)