[Click eStock] "NCSoft, Full of Growth Drivers for This Year... Target Price Up"

[Asia Economy Reporter Koo Eun-mo] DB Financial Investment analyzed that NCSoft has plenty of growth drivers such as performance improvement this year, regional expansion, and new game releases. The investment opinion was maintained as 'Buy,' and the target price was raised from 800,000 KRW to 840,000 KRW.

On the 13th, DB Financial Investment reported that NCSoft's operating profit for the fourth quarter of last year recorded 141.2 billion KRW, a 27% increase compared to the same period last year, but fell short of the consensus (182.4 billion KRW). Hwang Hyun-joon, a researcher at DB Financial Investment, explained in the report that "due to the change in the revenue recognition standard for mobile game item sales, about 35 billion KRW of Lineage2M's fourth-quarter sales were deferred to the first quarter, and special bonuses for the launch of Lineage2M and incentives expected to be paid in the first quarter of this year were recognized early, resulting in increased labor costs." Additionally, non-operating items reflected foreign exchange differences due to the won's appreciation and impairment losses on investments in affiliates, which lowered the net profit margin.

NCSoft is expected to continue growth drivers such as performance improvement, regional expansion, and new game releases this year. Researcher Hwang diagnosed, "Lineage2M, released in November last year, recorded an average daily sales of 5.1 billion KRW in the fourth quarter and was a hit," adding, "With the domestic success of Lineage2M and the existing games showing stable performance without being cannibalized, the visibility of performance improvement has become clear." Furthermore, Lineage2M is expected to achieve results from global regional expansion within the year, including Taiwan and Japan.

The investment opinion was maintained as 'Buy,' and the target price was raised from 800,000 KRW to 840,000 KRW. Researcher Hwang said, "It is necessary to pay attention to this year's performance improvement based on Lineage2M and the expansion of owned intellectual property (IP)," and added, "We maintain our top sector pick opinion."

This content was produced with the assistance of AI translation services.