[Click eStock] "DoubleU Games, Competitiveness Lies in Price... Q1 Earnings Also Expected"
[Asia Economy Reporter Park Jihwan] Hana Financial Investment on the 11th gave a 'Buy' rating and a target price of 120,000 KRW for DoubleU Games, citing its outstanding price competitiveness compared to the market and competitors.
Hwang Seungtaek, a researcher at Hana Financial Investment, stated, "Despite the recently heightened market volatility, the company belongs to the gaming sector, which is inelastic to economic variables, and due to the nature of the social casino genre, it holds the highest stability within the gaming industry," he evaluated.
In particular, it is praised for its superior price competitiveness compared to the market and competitors. Researcher Hwang said, "It is traded at a significantly lower level, which further highlights its valuation attractiveness," adding, "The value re-evaluation expected soon from the listing of its subsidiary will also have a positive impact on the short-term stock price movement."
The listing of DoubleDown Interactive (DDI), a subsidiary operating DoubleDown Casino and Fortnox, in the U.S. market is expected to become visible soon. In January, it submitted listing-related review documents to the U.S. Securities and Exchange Commission (SEC), and the listing could be possible as early as June.
Researcher Hwang emphasized, "DDI's operating profit for Q4 was 22.2 billion KRW, and the annual operating profit for 2019 was 80 billion KRW, so the market capitalization before and after the listing is likely to exceed 1 trillion KRW," adding, "Given DDI's remarkable performance improvement, a premium is also expected."
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The earnings outlook for this year is also positive. Compared to the Q4 2019 results, which were below market expectations, the Q1 2020 results are expected to show improvement. Researcher Hwang predicted, "DoubleDown Casino and Fortnox, which continue steady growth, are expected to see increased sales in Q1 following the previous quarter."
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