[Click eStock] "NCSoft, Quarterly Earnings Growth Expected This Year"

[Asia Economy Reporter Minji Lee] Ebest Investment & Securities maintained a buy rating and a target price of 950,000 KRW for NCSoft on the 28th, expecting the company to continue solid performance this year.

In the second quarter, NCSoft is expected to record sales of 635.5 billion KRW and an operating profit of 251.3 billion KRW. Sales are forecasted to decrease by 13% compared to the previous quarter, but operating profit is expected to increase by 4%. Sales are projected to decline sharply quarter-on-quarter due to a downward setup pattern in the mobile game Lineage 2M.

However, operating profit is anticipated to rise quarter-on-quarter due to reductions in key expenses such as labor costs and marketing expenses. Labor costs are expected to decrease significantly compared to the previous quarter, which had large incentives related to last year's performance and Lineage 2M's achievements. Meanwhile, marketing expenses are expected to see limited reductions due to promotions for Lineage and the Chronicle 3 update.

Third-quarter results are expected to show sales of 679 billion KRW and operating profit of 275.6 billion KRW, representing increases of 7% and 10% respectively compared to the previous quarter. PC games are generally expected to rebound slightly quarter-on-quarter, while mobile games Lineage M and Lineage 2M are anticipated to see relatively large increases due to the 3rd anniversary promotion in June and the Chronicle 3 update.

In the fourth quarter, NCSoft is projected to achieve sales of 762.4 billion KRW and operating profit of 282.4 billion KRW, up 12% and 3% respectively from the previous quarter. New revenue is expected from anticipated schedules such as Lineage 2M overseas and Blade & Soul 2 domestically.

Seong Jonghwa, a researcher at Ebest Investment & Securities, said, “The company's operating profit will continue a steady quarterly increase after an explosive rise in the first quarter.”

He added, “The third quarter figures reflect the effects of major game updates, and the fourth quarter considers the company’s highly calculated management strategy including overseas expansion and anticipated new releases. During the second quarter earnings season, the overseas and domestic new release schedules in the fourth quarter will serve as more important investment attractions.”

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