'Squid Game' effect drives up production-company shares
As Korean series become global sensations, shares of production companies become hits in their own right.
It’s the “Squid Game” effect.
Shares of J Contentree, which controls JTBC Studios, renewed its 52-week high by hitting 74,300 won ($63) on Thursday intraday. The surge was largely driven by expectations about Netflix Korea original "Hellbound," which was released Friday and produced by the JTBC Studio subsidiary.
JTBC Studios was also behind Netflix original Korean series "D.P.," which topped Netflix viewership charts in a number of countries, including Korea, Thailand and Vietnam, after streaming started in August.
On Friday, shares of J Contentree lost some steam and tumbled by 2.78 percent to close at 69,900 won, though it’s up 86 percent year to date.
The company has been actively partnering with global video streaming companies. With Netflix, it inked a deal to co-air around 20 TV series on JTBC and on Netflix and to produce six to nine Netflix original series in the three years starting May 2020, according to a report by analyst Kim Hoi-jae from Daishin Securities released Thursday.
Kim said he expects J Contentree's business to grow further in 2022 based on the deal.
The company has also been fast to work with Disney+, available in Korea from early this month.
Drama series "Snowdrop," starring Jung Hae-in and Jisoo of Blackpink, will be aired both through JTBC’s cable channel and the Disney+ in December. According to a report by analyst Kim, all 14 Korean dramas currently accessible on Disney+ are J Contentree products, including "SKY Castle" and "The World of the Married."
Kim set a target price of 81,000 won for J Contentree in the next six months and issued a buy recommendation.
Shares of Studio Dragon, the production company behind popular webtoon-based TV series "Yumi's Cells" and "Hometown Cha-Cha-Cha," have also been strong, rising for six trading days.
Analysts say Studio Dragon's shares will be able to rise further in the coming year.
Next year “will be the year the company sees its shares go beyond the current price range," said Lee Hyo-jin, an analyst from Meritz Securities in a report last week.
Lee said opportunities are clear for Studio Dragon in 2022 as it will be introducing an American drama and it is renewing a content publication-related contract with Netflix.
Studio Dragon said in June it will co-produce "The Big Door Price," a drama, with U.S. production companies Skydance Media and Apple TV+. The series is set to air on Apple TV+ at the end of next year. According to Studio Dragon, it is the first time for a Korean production company to produce an American drama series for a global audience, beyond the sale of finished content or sale of rights.
As for the deal with Netflix, it is likely Studio Dragon could supply its content to Netflix at higher prices due to global interest in Korean drama series, according to Lee.
BY KIM JEE-HEE [email@example.com]