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K-content performance

Korean content shares soar as platforms eye overseas expansion

Apr 14, 2021 (Gmt+09:00)

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Japanese version of Itaewon Class, a webtoon-turned-drama global success story via Kakao Page.
Japanese version of Itaewon Class, a webtoon-turned-drama global success story via Kakao Page.

Shares of Korean content providers are flying high as platform operators such as Kakao Entertainment Corp. are looking to expand overseas to bask in the success of Korean webtoons and dramas on the global scene.

Once considered just one of many Asian entertainment products, Korean dramas, games, music and webtoons – collectively known as K-content – have risen to prominence on the global stage.

On the back of such popularity of K-content amid the COVID-19 lockdown, shares of Korea’s content providers are rising at a fast pace. Still, they haven’t come close to peaking, as analysts say they are set to outperform the broader market for the rest of the year.

D&C Media Co., a webtoon and web novel provider listed on the tech-heavy Kosdaq market, rose by the daily limit of 30% to 53,000 won on Tuesday, a record high for the company since its trading debut on the junior market in 2017.

The stock has risen 38% so far this year, although it was trading 4.2% lower early Wednesday on investors’ profit-taking.

AGGRESSIVE OVERSEAS EXPANSION

Stock market watchers say D&C Media’s decent gains were partly boosted by Kakao Entertainment’s move to aggressively expand its overseas business.

Kakao Entertainment, the content platform unit of Korea’s top mobile app operator Kakao Corp., is said to be considering acquiring Tapas Media, the third-ranked US digital comics platform, to boost its US presence.

What's Wrong with Secretary Kim?, a webtoon-turned-drama.
What's Wrong with Secretary Kim?, a webtoon-turned-drama.
Kakao has steadily increased its stake in Tapas Media in the past few years and currently owns a 40.4% stake in the company.

More recently, Kakao Entertainment, which is working to list its shares on the domestic bourse by 2022, is reportedly looking to go public in the US stock market to reach for broader global investors. The company has denied such media reports, but the platform industry said it’s a possible scenario.

Analysts said D&C Media stands to benefit from Kakao’s overseas expansion as Kakao is one of the platforms through which it is distributing its web content. Kakao Page, a content platform, is D&C’s second-largest shareholder.

“D&C is one of key beneficiaries if Kakao Entertainment’s acquisition of Tapas and a US listing is materialized,” said NH Investment & Securities analyst Jack Baek.

ENHANCED PRESENCE ON OVERSEAS WEBTOON SCENE

KidariStudio Inc. is another content share coveted by investors on the Kosdaq market.

On Tuesday, its shares surged by the 30% daily limit to close at a record high of 18,100 won, although the stock dropped 4.4% in early Wednesday trade. The stock has climbed 76% so far this year.

The producer of webtoons and web novels said last month its France-based webtoon arm, Delitoon SAS, logged around 10.9 billion won ($9.7 million) in 2020 revenue, up nearly 230% from the previous year.

Delitoon offers Korean webtoons translated into French and German.
Delitoon offers Korean webtoons translated into French and German.

KidariStudio has been stepping up efforts to boost its presence in overseas markets as well as enhance its webtoon portfolio.

Shares of Daewon Media Co., which boasts a robust portfolio of intellectual property rights for thousands of webtoons and web novels, more than doubled this month alone. The stock exchange operator had to suspend the trading of Daewon’s shares on Apr. 9 and Apr. 13 to let off some steam following a sharp rally.

METAVERSE, NEW BUZZWORD AMONG INVESTORS

Alongside entertainment-related shares, metaverse stocks are set to become the market darling.

Korea’s virtual reality (VR) and augmented reality (AR) companies are lined up to get listed on the Kosdaq, as betting on metaverse stocks emerges as a growing investing trend worldwide.

Metaverse, combining “meta” and “universe,” is a shared virtual space that converges virtual and physical realms to bring imagination to life.

“Metaverse is a new trend even in the entertainment sector, providing another good window of opportunities for stock investors,” said NK Investment’s Baek.

WYSIWYG Studio Co., a visual effects (VFX) and cinematic tech company, is one such stock that enjoys the market’s bullish run, analysts said.

Write to Jae-Won Park at wonderful@hankyung.com

In-Soo Nam edited this article.

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