Samsung Securities announced on November 6 that it has raised its target price for CJ ENM from 47,000 won to 56,000 won, citing a recovery in TV advertising revenue, global expansion of Tving, and improvements in the profitability of its music business.
Choi Min-ha, a researcher at Samsung Securities, stated, "The third-quarter results showed resilience due to profitability improvements in the media platform and film-drama sectors. As Tving continues to expand its performance, the media platform segment turned profitable, contributing to an increase in operating profit alongside improvements in the film-drama sector."
In the third quarter, CJ ENM reported revenues of 1.19 trillion won, a 4.4% decrease from the same period last year, while operating profit rose by 25.5% to 22.1 billion won, exceeding market consensus. Tving's revenue increased by 22% to 120.5 billion won, and its operating loss narrowed to 7.2 billion won from 16.1 billion won a year earlier. The media platform segment recorded an operating profit of 5.9 billion won, marking a return to profitability, while the film-drama segment's operating profit surged by 126.8% to 15.5 billion won.
Choi highlighted Tving's advertising business and international expansion as key growth factors. He noted, "Tving is strengthening its advertising-based revenue model while expanding its subscriber base, with cumulative advertising revenue in the third quarter increasing by 45.8% compared to the previous year."
He added, "Tving plans to gradually enter overseas markets through a global app launch in the summer of 2027. This shift from a content supply-focused overseas business to direct entry through its own platform is noteworthy for its long-term growth potential."
However, he pointed out that the music segment has turned to a loss due to investments in expanding original IP and new artists, and the commerce segment also saw a decline in operating profit due to reduced scale and strategic investment costs. Additionally, costs related to customer compensation from Tving's cyber breach incident were partially reflected in the third quarter, with remaining costs expected to be recognized in the fourth quarter.
* This article has been translated by AI.
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