[Click eStock] "NCSoft, Stable Performance with Abundant Liquidity"

[Asia Economy Reporter Minji Lee] Korea Investment & Securities maintained a buy rating and a target price of 800,000 KRW for NCSoft on the 27th, expecting stable earnings performance.

Jung Hoyoon, a researcher at Korea Investment & Securities, said, "The decrease in outdoor activities due to social distancing has relatively led to an increase in the usage of online content such as games," adding, "The popularity of Lineage 2M and Lineage M has remained strong in the first quarter."

In the first quarter, the company is expected to record sales and operating profit of 685.7 billion KRW and 298.5 billion KRW, respectively, representing increases of 91% and 271% compared to the same period last year.

Liquidity risk is also low. Game companies tend to have relatively abundant liquidity, resulting in lower risk compared to other industries. Researcher Jung said, "Since there is no deterioration in performance, stable cash flow continues," and added, "The cash equivalents held are also estimated to reach 1.9 trillion KRW as of the end of the fourth quarter."

Furthermore, Jung said, "To prepare for overseas expansion, personnel have been increased in Southeast Asia, and in February, the company participated in a North American game exhibition, showing various movements," and added, "In the long term, besides new IP-based titles, they will also showcase diverse results from new PC and console titles as well as overseas business divisions."

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