Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

Studio Dragon has received the regulatory approval to proceed with its IPO in November. This is the biggest IPO in the Korean entertainment sector in 2017. Studio Dragon is the largest TV drama producing studio in Korea. Studio Dragon generated 49.7 billion won in EBITDA in 2016 and its estimated EBITDA in 2017 is 87.2 billion won using its annualized 1H17 results.  Using EV/EBITDA multiples (15.3x in 2017 and 18.2x in 2016) derived from its comps, this suggests an implied market cap of 1.1 trillion won (prior to discount) and implied IPO price of 41,112 won. The bankers applied another IPO discount range of 14.9% and 24.8%, resulting in implied IPO price range of 30,900 won to 35,000 won.  The Korean entertainment sector has been negatively impacted by the THAAD related political conflict with China. As a result, many Korean entertainment stocks have underperformed in the past year. However, Netflix has been aggressively trying to expand in Korea. One of Netflix's strategies has been to find great contents (including Korean movies and dramas) and showcase them to its global audience. Dragon should be one of the key beneficiaries in Korea of capitalizing on the huge power of Netflix to reach the global audience. For example, Studio Dragon recently sold its popular TV drama called "Stranger" (Secret Forest) to <a href="https://www.smartkarma.com/entities/20451" target="_blank" data-smartkarma-citation="entities:20451:1">Netflix Inc (NFLX US)</a> (16 episodes &amp; US$0.2m for one episode). <h2>Deal Specifics of the Studio Dragon IPO:</h2><ul><li>Lead manager of the IPO: Mirae Asset Daewoo Securities</li><li>Expected IPO offer price per share:  30,900 won (low)/ 35,000 won (high)</li><li>Number of Shares for IPO: 6.0m shares </li><li>IPO base deal size: US$164m (low);  US$186m (high)</li><li>Expected market cap range (post-IPO): 871 billion won; US$771 million (low)/ 987 billion won; US$873 million (high)</li></ul>

Studio Dragon has received the regulatory approval to proceed with its IPO in November. This is the biggest IPO in the Korean entertainment sector in 2017. Studio Dragon is the largest TV drama producing studio in Korea. Studio Dragon generated 49.7 billion won in EBITDA in 2016 and its estimated EBITDA in 2017 is 87.2 billion won using its annualized 1H17 results.  Using EV/EBITDA multiples (15.3x in 2017 and 18.2x in 2016) derived from its comps, this suggests an implied market cap of 1.1 trillion won (prior to discount) and implied IPO price of 41,112 won. The bankers applied another IPO discount range of 14.9% and 24.8%, resulting in implied IPO price range of 30,900 won to 35,000 won.  The Korean entertainment sector has been negatively impacted by the THAAD related political conflict with China. As a result, many Korean entertainment stocks have underperformed in the past year. However, Netflix has been aggressively trying to expand in Korea. One of Netflix's strategies has been to find great contents (including Korean movies and dramas) and showcase them to its global audience. Dragon should be one of the key beneficiaries in Korea of capitalizing on the huge power of Netflix to reach the global audience. For example, Studio Dragon recently sold its popular TV drama called "Stranger" (Secret Forest) to Netflix Inc (NFLX US) (16 episodes &amp; US$0.2m for one episode). Deal Specifics of the Studio Dragon IPO:Lead manager of the IPO: Mirae Asset Daewoo SecuritiesExpected IPO offer price per share:  30,900 won (low)/ 35,000 won (high)Number of Shares for IPO: 6.0m shares IPO base deal size: US$164m (low);  US$186m (high)Expected market cap range (post-IPO): 871 billion won; US$771 million (low)/ 987 billion won; US$873 million (high)

Studio Dragon IPO Preview (Part 2) - Biggest Korean Entertainment IPO in 2017

Equity Bottom-Up

Okja is a Netflix backed movie made by Bong JoonHo, a well-known Korean movie director. There is a fight regarding Okja between the global film distribution giant <a href="https://www.smartkarma.com/entities/20451" target="_blank" data-smartkarma-citation="entities:20451:1">Netflix Inc (NFLX US)</a> and the dominant multiplex cinema chain in Korea, <a href="https://www.smartkarma.com/entities/2885" target="_blank" data-smartkarma-citation="entities:2885:1">CJ CGV Co Ltd (079160 KS)</a>. Okja is a movie about a large, cuddley pig that looks like a half pig-half hippo which could solve world's hunger problems. Now, without revealing all the movie's storyline, Okja is expected to be released in 190 countries on June…

Okja is a Netflix backed movie made by Bong JoonHo, a well-known Korean movie director. There is a fight regarding Okja between the global film distribution giant Netflix Inc (NFLX US) and the dominant multiplex cinema chain in Korea, CJ CGV Co Ltd (079160 KS). Okja is a movie about a large, cuddley pig that looks like a half pig-half hippo which could solve world's hunger problems. Now, without revealing all the movie's storyline, Okja is expected to be released in 190 countries on June…

Okja: The Fight Between Netflix Vs. CJ CGV

South Korea

ContentreeJoongAng corp. operates as a comprehensive media content company. The Company provides drama and movie intellectual property investment and distribution, large multiplex megabox media platform operation, premium theater and movie distributor, broadcast production, and other related services. ContentreeJoongAng markets its products worldwide.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

ContentreeJoongAng (036420 KS)

Studio Dragon IPO Preview (Part 2) - Biggest Korean Entertainment IPO in 2017

Studio Dragon has received the regulatory approval to proceed with its IPO in November. This is the biggest IPO in the Korean entertainment sector...

Douglas Kim

Okja: The Fight Between Netflix Vs. CJ CGV

Okja is a Netflix backed movie made by Bong JoonHo, a well-known Korean movie director. There is a fight regarding Okja between the global film...

Douglas Kim

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)