[EQUITIES] ‘CJ ENM continues growth momentum’
[THE INVESTOR] CJ ENM, a combined entity of CJ O’Shopping and CJ E&M, is maintaining strong growth momentum especially in contents, said KB Investment and Securities on Aug. 10, suggesting a “buy” recommendation and 300,000 won (US$266.76) target price.
Second-quarter revenue from the shopping network slipped 2 percent on-year but that of entertainment arm gained 11 percent. The diversifying ad profits boosted revenue from media sector by 12 percent while revenue from the music unit surged 41 percent. In the latter half, contents, rather than synergies from the merger, will propel its growth. Expectations for revenue from mega productions including “Mr. Sunshine” and “Memories of the Alhambra” as well as producing original contents for Netflix are rising, said analyst Lee Dong-ryun.
In the music sector, it will further dominate the market by merging with M.Net and Genie Music, and expand synergies between contents businesses by producing its own audition programs. Its decision to review selling its stake in Studio Dragon is likely to draw expectations rather than concerns, and will have positive effects on both earnings and stock price, noted the analyst.
By Hwang You-mee (email@example.com)