Original title: South Korean TV series "Squid Game" Korean media company soared 70% in 3 days. Analysts are optimistic that South Korean film and television stocks will enter a bull market.
Source: FX168
Netflix Inc(Netflix) the hit South Korean drama "Squid Game" has become the first South Korean TV series to rank No. 1 on Netflix Inc's US list, which has also sent the share prices of South Korean companies associated with "Squid Games" soaring, with some of them rising more than 70 per cent in three days.
Squid Game is set against a brutal survival competition, and only one of the contestants can survive and win back a lot of cash. Netflix Inc co-chief executive and chief content officer Ted Sarandos said that Squid Game must be the company's most popular non-English album, and has a "very high probability" to become the most popular album in Netflix history.
Shares of Bucket Studio, a South Korean media company, rose more than 70 per cent in the past three trading days as of Monday's close, mainly because Bucket Studio is a 15 per cent shareholder in Artist Company, a brokerage firm known as Lee Jung-jae, one of the protagonists of the squid game.
The South Korean stock market reopened on Thursday last week after the Mid-Autumn Festival holiday. Bucket Studio reached its price ceiling on Thursday and Friday, rose another 2% on Monday, and as of Monday's close, its market capitalization was close to 200 billion won ($170 million), up from 114 billion won on Sept. 17.
Showbox, a media company that invests, produces and distributes films, reportedly invested in other film productions of Siren Pictures, the maker of Squid Games, which sent Showbox's shares up 50 per cent from Thursday to Friday, although the shares fell more than 10 per cent on Monday.
Douglas Kim, an analyst at Smartkarma, pointed out in a report that Bucket Studio is an indirect beneficiary of squid games, while the relationship between Showbox and squid games is not clear because Siren Pictures is fully owned by Kim Ji-Yeon, the company's chief executive.
However, due to global demand for the Korean entertainment industry, shares of Korean film and television production companies are likely to outperform the market over the next two to three years, the report said.
Analysts say investors' focus on South Korean media stocks is unlikely to be short-lived, and in addition to Netflix Inc and Disney+,Apple TV+ and HBO Max are also looking to enter the South Korean market, Korean film and television content production companies, especially small and medium-sized companies such as Astory, Next Entertainment World and Samhwa Networks, are likely to benefit.
In the past three trading days, Astory is up 15.7%. The Networks next Entertainment World is up 12.7%, and the Samhwa Networks is up 10.2%.
Oh Tae-wan, an analyst at Korea Investment Securities, said he maintained his "overweight" rating on South Korean media and advertising stocks because of a rise in "interest from the world's top media companies in investing in South Korea" and improved profit margins for South Korean media companies.