1. Key Earnings Highlights: What Happened?
CJ ENM reported consolidated revenue of KRW 1.1383 trillion (a 1.4% YoY decrease) and operating profit of KRW 705 million (return to profitability) in Q1 2025.
- Media Platform: Tving’s monthly active users (MAU) surpassed 8 million, but revenue decreased by 6.8%, resulting in an operating loss of KRW 5.7 billion.
- Film/Drama: Despite the acquisition of FIFTH SEASON, revenue declined by 13.8%, and the operating loss continued (KRW -23.2 billion).
- Music: Driven by the global popularity of K-POP, revenue increased by 32.9%, leading to an operating profit of KRW 2.67 billion.
- Commerce: Increased investment in mobile live commerce boosted revenue by 4.2%, resulting in an operating profit of KRW 25.8 billion.
2. Drivers of Profitability and Outlook: Why? And What’s Next?
The return to profitability was primarily driven by the growth of the music business and the steady performance of the commerce segment. While Tving’s growth trajectory is positive, achieving profitability remains a crucial task. The struggles in the film/drama segment are attributed to intensified content production competition and increased costs due to platform competition. Going forward, CJ ENM is expected to focus on improving profitability through Tving’s global expansion, K-content IP expansion, and efficient cost management.
3. Action Plan for Investors: What Should You Do?
The information revealed at the IR meeting on August 11th is expected to significantly influence future stock price movements. Investors should pay close attention to the company’s plans for improving the profitability of the media platform business, turnaround strategies for the film/drama segment, and risk management strategies for macroeconomic variables. It is essential to carefully analyze the results of the IR meeting and the concreteness and execution of future business plans before reviewing your investment strategy.