1. What Happened? Key Earnings Highlights
CJ ENM reported revenue of KRW 1.31 trillion in H1 2025, a 5.17% YoY increase. However, operating profit fell by 39.99% YoY to KRW 28.6 billion, while net income swung to a profit of KRW 114.5 billion. Despite the positive revenue growth, the decline in profitability warrants attention, particularly as the net income improvement stems from one-off factors.
2. Why Did This Happen? Drivers of Performance
- Media Platform: Increased investment in Tving hasn’t offset intensifying competition, leading to wider losses.
- Film & Drama: Production costs continue to pressure profitability, resulting in sustained operating losses. However, recent drama successes offer a glimmer of hope.
- Music: Riding the global K-Pop wave, the music segment delivered robust revenue growth and solid operating profit.
- Commerce: Economic headwinds contributed to slower revenue growth and declining operating profit.
3. What’s Next? Outlook and Investment Strategy
CJ ENM needs to sustain its music momentum and achieve a turnaround in the film & drama segment to improve overall profitability. Strengthening its media platform competitiveness and improving its financial structure are key long-term priorities. Investors should consider these factors when making investment decisions.
4. What Should Investors Do? Action Plan
We maintain a ‘Neutral’ rating on CJ ENM. Investors should closely monitor upcoming earnings releases and management’s strategic direction. Pay close attention to the media platform’s path to profitability and changes in key financial health indicators.