This is the 34th in a series of articles analyzing major companies by market capitalization traded on the tech-heavy Kosdaq market. -- Ed
CJ E&M Corp.’s stock price leaped by almost 60 percent in late January driven by the popularity of its cable drama “Guardian: The Lonely and Great God.”
Before the tvN series featuring Gong Yoo and Kim Go-eun turned into one of the most popular shows in December and January, the stock price of CJ E&M had stood at 53,400 won ($46.91) at the start of December, the lowest point since April 2015.
After hitting 89,800 on Jan. 26, the stock price closed at 87,400 won on Friday. With market capitalization of 3.38 trillion won, it is now the third-largest company trading on the Kosdaq, according to Korea Exchange.
CJ E&M’s market performance beat that of its competitors and other CJ Group subsidies such as CJ Cheiljedang Corp or CJ CGV. Other entertainment companies have been hit hard by slow demand at home and a shutout in China after Seoul’s decision to deploy the US-led Terminal High Altitude Area Defense system.
In addition to the megahit TV drama, the company has been buoyed by the performance of “Confidential Assignment,” a comedy-action film released on Jan. 18.
The movie sold 5 million tickets in its first 15 days, according to data from the Korean Film Council.
Analysts say the company’s future is bright even though Guardian has finished. The successful launch on Dec. 14 of “Lineage II: Revolution” by Netmarble is also boosting the stock prices of CJ E&M.
CJ E&M is the second-largest shareholder in Netmarble, with a stake of about 28 percent. The company is set to go public in the first half of the year.
The accumulated sales of the role playing game reached 206 billion won within one month, with the number of users exceeding 5 million.
“The performance of ‘Lineage II’ is better than the market expected,” said Lee Min-ah, an analyst at KTB Investment and Securities. “The sales and net profit would jump 71 percent to 2.6 trillion won and 182 percent to 826 billion won, respectively.”
All this offers hope for CJ Group, South Korea’s 14th-largest conglomerate, which owns CJ E&M. The food and entertainment-focused conglomerate has been hit by a series of misfortunes in recent years.
The group was accused of being involved in the ongoing presidential influence-peddling scandal, as the group has been executing an investment plan in cultural businesses reportedly designed by Choi Soon-sil and her associates.
CJ has denied illicit dealings, but the special counsel team has indicated that its probe could expand to CJ, along with SK and Lotte Group, in connection with the bribery allegations involving President Park Geun-hye.
CJ is suspected of seeking favors, such as the release of Lee Jay-hyun, the ailing chairman of the group, who was pardoned in a special amnesty in August 2016. He was sentenced to 2 1/2 years in prison on Dec. 15, 2015 for fraud and tax evasion.
By Park Ga-young (email@example.com)