[Click eStock] Pearl Abyss 1Q Operating Profit Up 91% YoY

Benefiting from COVID-19 in North America and Europe, 'Black Desert' Faces Slightly Weak 2Q Performance Outlook
New Game Marketing Schedule Uncertain Due to International Game Show Cancellation
Concerns Over Declining Black Desert Sales... "Success of New Releases is Key"

[Asia Economy Reporter Minwoo Lee] Pearl Abyss's operating profit for the first quarter of this year is expected to increase by 91% compared to the same period last year. Its flagship title, "Black Desert," continues to generate significant revenue across various platforms including PC, mobile, and console. However, since a declining trend is also observed, the success of new releases is expected to have a major impact on the second quarter's performance.

On the 21st, Ebest Securities forecasted that Pearl Abyss would achieve consolidated sales of 129.2 billion KRW and operating profit of 34.7 billion KRW in the first quarter of this year. Compared to the same period last year, sales decreased by 2.6%, while operating profit increased by 91.2%. Compared to the previous quarter, sales rose by 10.8%, but operating profit fell by 3.5%.

For the PC version of Black Desert, sales are estimated to have steadily increased both domestically and internationally compared to the previous quarter. In particular, overseas markets benefited from the COVID-19 pandemic, especially in North America and Europe, where people refrained from outdoor activities. Black Desert Mobile saw a continued decline in major markets such as South Korea and Japan compared to the previous quarter. However, the three months of sales following the global launch on December 11 last year contributed to an increase compared to the previous quarter. Other titles such as Black Desert Console and EVE PC appear to have slightly decreased compared to the previous quarter.

The success of the new release "Shadow Arena," scheduled for launch in the second quarter, is crucial. It will first be released globally on PC, with a console version launching about three months later. The mobile release date for this year is undecided. Depending on the exact release timing and success, the second quarter's performance is expected to vary. However, given the continued downward trend in domestic and Japanese sales of Black Desert Mobile and the anticipated global sales decline, an increase in sales compared to the previous quarter seems unlikely.

Ebest Investment & Securities estimated second-quarter consolidated sales of 130.8 billion KRW and operating profit of 27.8 billion KRW. Compared to the same period last year, sales are expected to decrease by 14.1% and operating profit by 51.1%. Operating profit is also forecasted to drop by 19.8% compared to the first quarter. Researcher Jonghwa Sung of Ebest Investment & Securities explained, "This is due to the reflection of company-wide incentives for last year's performance. We expected to pay about 10 billion KRW in the first quarter, but the payment timing has been delayed to the second quarter, and the amount is expected to be somewhat less than 10 billion KRW."

Accordingly, Ebest Investment & Securities maintained a "Hold" investment rating on Pearl Abyss with a target price of 220,000 KRW. The closing price the previous day was 198,000 KRW. Researcher Sung stated, "Since there is little performance momentum through the second quarter following the first quarter, and the international game shows intended as pre-marketing opportunities for three new projects were canceled due to COVID-19, it is realistic to maintain the target price and adopt a wait-and-see approach."

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