South Korean entertainment stocks are bouncing back after a sharp retreat from the coronavirus outbreak on revived hopes of a full removal of Chinese sanctions on Korean pop culture.

Youku Tudou, a video hosting service under Alibaba Group known as the Chinese equivalent of YouTube, has started showing Korean dramas on its platform after four years of blocked access.

All hallyu contents including dramas, films and music had been banished from the site in 2016 following a Beijing-imposed ban triggered by a diplomatic row over Seoul’s decision to deploy a U.S. missile shield despite China’s strong protest.

The gradual easing of Korean contents has led to a surge in entertainment stocks.

Studio Dragon, a drama production studio under the Korean media conglomerate CJ ENM, saw its shares jump 22.7 percent over the past month from March 20. Its rivals KeyEast surged 104.6 percent and NEW 101.7 percent over the same period.

As of 10:21 a.m. Friday, Studio Dragon was trading down 1.65 percent at 83,400 won ($68). KeyEast was also 1.54 percent lower at 2,880 won while NEW was up 2.19 percent at 3,740 won.

One of the most anticipated new dramas this year is Studio Dragon’s “The King: Eternal Monarch” by Kim Eun-sook, the star writer behind megahit dramas like “Descendants of the Sun” and “Guardian: The Lonely and Great God.”

“The King,” which is set to premiere on April 17, will also be released globally via Netflix on the same day. By nabbing a deal with Netflix, it is likely to have already reached its break-even point, according to Netflix Nam Hyo-ji, a researcher at KTB Investment & Securities.

KeyEast’s drama “Hyena,” starring Kim Hye-soo and Ju Ji-hoon, was also a major success, finishing its run with a viewership rate of 14.6 percent. The company is also set to release a new book-adaptation drama called “The School Nurse Files” on Netflix this year.

NEW, which produces and distributes dramas and movies, is slated to air a drama called “Oh My Baby” starring Jang Na-ra and “Elegant Friends” featuring Yoo Jun-sang and Song Yoon-ah in May and June. With the new dramas, it is hoping to offset some of the losses incurred in its cinema releases as box offices slumped in the country due to COVID-19.

Media stocks are showing better earnings outlook this year. According to the financial data tracker FnGuide, KeyEast and NEW are expected to swing to profit in 2020, with Studio Dragon to see a 106.6 percent jump in its profit compared to last year.

Some analysts are skeptical of the latest gains, saying that they have only now recovered some lost ground.

Studio Dragon shares closed Friday up 0.24 percent at 85,000 won ($70). KeyEast fell 2.22 percent to 2,860 won while NEW finished the day 3.55 percent higher at 3,790 won.

“A drama alone can’t generate enormous profits,” said Park Seong-ho, researcher at Yuanta Securities Korea. “The latest movements can be seen as stocks regaining their footing after the sharp selloff in February and March.”

By Shin Yoo-kyung and Kim Hyo-jin

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