Macquarie Thinks DreamWorks Can 'Crack' China while appealing to the millennial demographic

On Wednesday, Macquarie issued a company update on Dreamworks Animation Skg Inc.

ahead of the holiday movie season, saying that the company is in a good position to "crack" the millennial and Chinese demographics. Currently, Macquarie rates Dreamworks as Outperform with a 12 month price target of $30. Amy Yong and Andrew DeGasperi, analysts at Macquarie, wrote, "Our Asian Media Team expects China will be the world's largest movie market by '18 and few can capitalize on this like Oriental DreamWorks can...Its content travels globally AND speaks to the demanding kids-millennial demo….Shrek, Madagascar, Kung Fu Panda, and How to Train Your Dragon are core, and more franchises are on the way." Dreamworks has seen success in Chinese markets, particularly with their Kung Fu Panda franchise, with the third installment being released in January and expected to generate US$120 million of revenue in China. Furthermore, Dreamworks has created a service targeting children called Awesomeness TV which has over 150 million subscribers and 800 million views per month. This gives Dreamworks a platform to expand their content and target the key millennial demographic that has proved to be highly profitable. Macquarie also notes important partnerships that Dreamworks has made with platforms such as Netflix, Inc.

, which should provide opportunities for further growth and access to other key demographics for their video products. Currently, Dreamworks is trading at $24.75, up 0.2 percent. Currently, Netflix is trading at $127.76, up 0.61 percent.