Studio Dragon is Korea's largest drama studio, planning and producing dramas to supply broadcasters and OTT platforms. It earns from programming revenue on channels such as tvN, sales revenue from licensing broadcast rights to platforms like Netflix and Disney+, and IP revenue from remakes and overseas distribution, and it has set out a shift toward becoming an 'IP holder' that owns copyrights directly. In Q1 2026 programming revenue rose 45.5% year over year to ₩48.4 billion and episodes aired jumped from 59 to 91, and the company decided to absorb its wholly owned subsidiary Nextscene via a no-new-share small-scale merger (merger date July 7, 2026), while May's preliminary Q1 results formalized improvements in revenue and profit. The key point to watch is that with a net-cash balance sheet, more episodes produced, lower production costs, and higher selling prices are improving margins so the stock trades at a low multiple on this year's earnings; on the other hand, results swing with the success of specific titles and with OTT bargaining power and contract timing, and the gap between quarters loaded with big titles and quarters without is large.
At-a-glance assessment financial health · growth · profitability · valuation
- Debt ratio, current ratio and interest burden all look healthy.
- Revenue fell 3.5% year over year (3-year trend: falling).
- Most recent quarter (Q1 2026) revenue was 16.1% higher than a year earlier.
- ROE is 1.3% (controlling-interest basis). It is below the sector average.
- Operating margin is 5.7%.
- The forward P/E sits above the sector median, reflecting elevated expectations.
Ownership & governance As of 2025-12-31
Largest shareholder CJ ENM 54.38% (corporate)
Controlling bloc incl. related parties 54.57%
With the controlling bloc holding 55%, control is very secure but the free float is thin.
🔎 In-depth analysis
- Studio Dragon is Korea's largest drama studio, planning and producing dramas to supply broadcasters and OTT platforms.
- It earns money in three main ways.
- The first is programming revenue - the fee for slotting a drama onto a channel such as tvN.
- The second is sales revenue - licensing broadcast rights to domestic and overseas OTT platforms such as Netflix and Disney+.
- The third is IP (intellectual property) revenue, from secondary uses such as remakes, overseas distribution, and merchandise.
- In Q1 2026, programming revenue rose 45.5% year over year to ₩48.4 billion, and episodes aired jumped from 59 to 91, expanding the top line.
- The company has set out a direction of moving beyond a mere production house toward becoming an 'IP holder' that owns copyrights directly.
- The latest close is ₩21,850 and market capitalization is ₩656.8 billion.
- The price sits below its 20-day line (₩22,493) and below its 60-day line (₩27,983).
- Trading below both the short- and medium-term moving averages, the trend is on the subdued side.
- The RSI (a gauge that weighs upward versus downward strength over the past 14 days on a 0-100 scale) is 39.9, a neutral level.
- The one-month change is -8.2%, the three-month change is -34.6%, and the price is -57.5% from its 52-week high.
- Relative strength versus the KOSDAQ is 35 (on a 1-99 scale, computed from the past year's return versus the index with more weight on recent performance; higher means stronger than the market).
- That places it in roughly the top 65% of all stocks by strength.
- Over the past three months it lagged the index by 12.3%.
- Chart reading is best done alongside trading volume and disclosure dates.
- Financial stability is solid.
- The debt ratio (debt relative to equity) is a low 29.3%, and it is in a net-cash state with more cash than borrowings (net debt of about -₩40.1 billion; negative means net cash).
- With ample cash, interest burden is minimal.
- The issue is profitability.
- The 2025 ROE (how much it earns per year on equity) was a low 1.3% and net margin was just 1.9%.
- This is because 2025 was the earnings trough.
- The P/E ratio (how many times a year's earnings the price represents) looking high at 62.8x is also because last year's earnings in the denominator were so small.
- For such an inflection stock, the real picture appears when viewed on this year's earnings rather than last year's P/E.
- The P/B ratio (the price relative to equity) is 0.82x, below book value.
- EV/EBIT (akin to a P/E that also reflects debt) is 20x, and the free-cash-flow yield (cash actually generated relative to market cap) is -1.7%, a figure that reflects the content-business trait of cash being pre-invested in new productions.
- The five-year path was choppy.
- Revenue fell from ₩753.1 billion in 2023 to ₩530.7 billion in 2025, and net profit slid from ₩50.6 billion in 2022 to ₩10.3 billion in 2025.
- 2025 was a clear trough.
- The turn came in 2026.
- Q1 revenue rose 16.1% year over year, operating profit jumped 50.1%, and net profit surged 177%.
- There are three reasons.
- More episodes aired expanded the top line; production-cost savings that began in the second half of 2024 came through; and the average selling price (ASP) of new titles rose 34% from a year earlier, lifting gross margin from 13.8% to 20.2%.
- Q2 episodes continue at around 80, and multiple lineups are scheduled for the second half, raising expectations that the earnings recovery is durable.
- Reflecting this trend, this year's net profit looks set to run well above last year's ₩10.3 billion, and the P/E that looks high on last year's basis falls sharply on this year's earnings.
- The most recent official item is the absorption of a 100% subsidiary.
- Studio Dragon decided to merge in its wholly owned subsidiary Nextscene, but because it is a no-new-share small-scale merger, the effect on ownership ratios and financials is limited.
- The purpose is organizational simplification and management efficiency.
- The merger date is July 7, 2026.
- Separately, the company held several investor briefings (IR) across April and May 2026 to explain results and its lineup to the market.
- In May it announced preliminary Q1 results via fair disclosure, formalizing improvements in revenue and profit.
- The bullish condition is that this is the entry point of an earnings recovery.
- The net-cash structure keeps the balance sheet stable, and more episodes produced, lower production costs, and higher selling prices are improving margins at the same time.
- Even though the P/E looks high on last year's basis, on this year's earnings it trades at a much lower multiple.
- The share price fell sharply over six months and has yet to reflect this improvement.
- The cautions are also clear.
- Drama results swing with the success of specific titles, and sales revenue depends on bargaining power with OTT platforms such as Netflix and on contract timing.
- The gap between quarters loaded with big titles and quarters without is large.
- In short, if episodes and lineups fill in as planned and sales results continue, the earnings recovery gains momentum; but if weak hits or delayed sales overlap, the pace of recovery can slow.
🔎 Valuation vs peers Undervalued
A peer set based on the real business of drama and broadcast-content production, using domestically listed content operators.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| CJ ENM | 25.31x | 0.27x | 1.06% |
The 62.8x P/E on last year's basis is greatly inflated because the 2025 net profit (₩10.3 billion) in the denominator was the earnings trough. Being an inflection stock, last year's P/E distorts the reality. Reflecting the recovery trend - Q1 operating profit up 50% and net profit up 177% year over year - into this year's earnings brings the effective multiple much lower. Taken together with the net-cash position and a P/B below 1x, if the earnings recovery takes hold, the current price looks low. That said, quarterly volatility tied to drama hits and sales timing is a point to keep in mind.
Price history Close · MA20 · MA60
The latest close is ₩21,850 and the market capitalization is ₩656.8 billion. The price sits below its 20-day moving average (₩22,493) and below its 60-day moving average (₩27,983). It is under both its short- and medium-term moving averages, so the trend looks subdued. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 39.9, a neutral level. The one-month change is -8.2%, the three-month change is -34.6%, and the position relative to the 52-week high is -57.5%. Relative strength versus the KOSDAQ is 35 (on a 1-99 scale, converted from returns against the index over the past year with more weight on recent performance; higher means stronger than the market). It is stronger than roughly 35% of all stocks. Over the past three months it lagged the index by 12.3%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
Relative performance stock vs index · start = 100
Excess return vs index · 3M -12.31% / 6M -39.38% / 12M -56.03%
Key metrics vs sector median
Valuation
The P/E of 63.65x is above the sector median (26.72x). The P/B of 0.82x is below the sector median (1.93x). That said, this P/E is based on last year's (trailing) results. With recent quarterly earnings up sharply, the trailing P/E can look higher than it really is, so a precise read is best done on this year's expected (forward) earnings.
Enterprise value (EV)
EV = market cap + net debt. It reflects cash and debt, so it captures the real cost of the whole business that market cap alone misses; lower multiples are cheaper relative to earnings or sales.
Intrinsic value (DCF estimate)
DCF (discounted cash flow) estimate — discount rate 10.1%, initial growth 10.0%→terminal 2.0%, 10-yr forecast, earnings-based. A reference range that shifts materially with assumptions.
Profitability & financials
Return on equity (ROE) is 1.3%, below the sector average (6.0%). The operating margin is 5.7%. The debt ratio is 29.3%, so the financial structure is stable.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $499.2M | $364.6M | $351.7M | -3.53% ↑ faster |
| Operating profit | $37.0M | $24.1M | $20.1M | -16.58% ↑ faster |
| Net profit | $19.9M | $22.2M | $6.8M | -69.18% ↓ slower |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $322.8M | $462.6M | $499.2M | $364.6M | $351.7M |
| Operating profit | $34.8M | $43.2M | $37.0M | $24.1M | $20.1M |
| Net profit | $25.9M | $33.5M | $19.9M | $22.2M | $6.8M |
| Revenue CAGR | 4-yr avg 2.16% | ||||
Revenue fell 3.5% year over year (2023 ₩753.1 billion → 2024 ₩550.1 billion → 2025 ₩530.7 billion), and the three-year trend is 'falling'. That said, the rate of decline narrowed from the prior year. Operating profit fell 16.6% year over year. That said, the decline narrowed. Over the 5 years on record, revenue compound annual growth (CAGR) is 2.2%. The two-year revenue CAGR is -16.1%. In the most recent quarter (Q1 2026), revenue was 16.1% higher than the same period a year earlier.
Latest quarterly results Q1 2026 · vs year-ago
Technical indicators
What stands out
- The balance sheet is stable in terms of debt and liquidity.
Points to watch
- Revenue fell 3.5% year over year (3-year trend: falling).
- The price is high versus peers, so expectations already appear priced in.
Recent news & events searched · sourced
- 2026-04-29FilingDecision to absorb the 100% wholly owned subsidiary Nextscene. A no-new-share small-scale merger with no share issuance or change in ownership ratio, aimed at organizational simplification and management efficiency, with a merger date of July 7, 2026.The effect on financials and ownership is limited. It is in the nature of streamlining management by tidying up a subsidiary. Source
- 2026-05-07EarningsQ1 2026 preliminary results via fair disclosure. Revenue of ₩155.3 billion (+16.1% YoY), operating profit of ₩6.4 billion (+50.1%), and net profit of ₩6.55 billion (+177%), confirming improving profit.Short term: a signal of passing the earnings trough. Medium term: expectations for margin recovery from lower production costs and higher selling prices. Source
- 2026-05-06IRInvestor briefing (IR) held. Explained Q1 results, the rise in episodes aired, and the drama lineup from Q2 onward.A communication channel to check the company's results and lineup plans directly. Source
- 2026-03-18Filing2025 annual report filed. Annual revenue of ₩530.7 billion, operating profit of ₩30.4 billion, and net profit of ₩10.3 billion, marking the earnings trough.Medium term: a reference point confirming that 2025 was the earnings bottom. Source
Figure cross-check computed ↔ external
Recent filings
- 2026-06-01Large-business-group status disclosure
- 2026-05-15PeriodicQuarterly report
- 2026-05-07EarningsFair-disclosure notice
- 2026-05-06Disclosure
- 2026-05-04Material-fact report (amended)
- 2026-04-30Disclosure
- 2026-04-29Material-fact report
- 2026-04-09Disclosure
- 2026-04-09EarningsEarnings disclosure
- 2026-03-26Disclosure
- 2026-03-26Shareholders' meeting notice
- 2026-03-18PeriodicAnnual business report
📖 Plain-language glossary — expand if you are new to this
- P/E
- How many times a year's net profit the price is worth (lower is cheaper relative to earnings). The P/E here is on trailing (last full-year) results; for companies whose earnings swing fast (memory chips and other cyclicals/high-growth), a forward P/E on this year's expected earnings is more accurate.
- P/B
- Price relative to net assets (equity). Around 1x means it trades near book value; below 1x means below book.
- P/S
- Price relative to a year's revenue — useful for growth companies with thin earnings.
- Net debt / EV
- Net debt = interest-bearing debt − cash. Negative means more cash than debt (net cash). EV (enterprise value) = market cap + net debt, closer to what it would cost to buy the whole business.
- EV/EBIT · EV/EBITDA · EV/Sales
- Enterprise value against operating profit (EBIT), EBITDA, or revenue. Unlike P/E these reflect debt and cash; lower is cheaper relative to earnings power or sales.
- FCF / FCF yield
- Free cash flow = operating cash − capex, the cash actually left over. FCF yield = FCF ÷ market cap; higher means more cash generated per unit of market value.
- Intrinsic value (DCF)
- Future free cash flow (or, for some capex-heavy but profitable names, forecast earnings) discounted to today to estimate per-share value. Because it shifts a lot with the discount-rate and growth assumptions, it is shown as a bear/base/bull range, and the basis and assumptions are disclosed in one line beneath it.
- ROE
- How much profit the company earns in a year on its equity (%). Higher means better returns on capital.
- EPS / BPS
- Earnings per share / net assets (book value) per share.
- Operating / net margin
- Profit left from the core business / final profit after tax and interest, per unit of revenue.
- Debt ratio
- Debt relative to equity (%). Higher means more reliance on borrowing (norms vary by sector).
- Current ratio
- Assets convertible to cash within a year against debt due within a year. Above 100% leaves some short-term headroom.
- Interest coverage
- How many times operating profit covers the interest owed. Below 1x means operating profit alone struggles to cover interest.
- Dividend yield / payout ratio
- The year's dividend as a % of today's price / the share of earnings paid out as dividends.
- Revenue CAGR
- Multi-year growth expressed as a single yearly average (compound annual growth rate).
- RSI (short-term signal)
- Whether recent price action is overheated or beaten down. Above 70 is overbought, below 30 oversold.
- MA20 / MA60 (moving averages)
- The 20- and 60-day average price. Price above them signals a firmer short-term trend.
- vs 52-week high
- How far below the past year's peak the price sits now (%).
All figures are for reference only; how they read varies by sector and over time.
Sources: Korea FSC market-price API (data.go.kr), OpenDART, KRX/KIND — public data only.
Bong Stocks presents public-data-based information for reference only. It is not investment advice and contains no target prices, ratings, or buy/sell recommendations. Verify independently before making any decision.