Subsidiary DDI's Nasdaq Listing Imminent... W Games Bought Daily by Institutions

[Asia Economy Reporter Eunmo Koo] As the Nasdaq listing of DoubleDown Interactive (DDI), a subsidiary of DoubleU Games, approaches next month, expectations for an increase in corporate value are growing.

According to the Korea Exchange on the 25th, DoubleU Games' stock price closed at 81,700 KRW, up 0.37% (300 KRW) from the previous trading day. Notably, it reached 85,800 KRW intraday, setting a new 52-week high. Since the beginning of this month, DoubleU Games' stock has risen 21.9%, outperforming the KOSPI return of 6.5% during the same period. Institutional investors led the rise by net buying 32.4 billion KRW over 10 consecutive trading days from the 5th to the 18th.

With the Nasdaq listing of its subsidiary DDI imminent, the anticipation of increased corporate value post-listing appears to be driving the stock price upward. DDI is scheduled to determine its offering price on the 30th and list on the Nasdaq market early next month. After the listing, DoubleU Games will hold a 60.2% stake in DDI. The offering price band is set between 17 and 19 USD, and the new shares raised through the listing are expected to secure approximately 120 billion KRW for DoubleU Games.

Considering the discounted offering price compared to competitors, DDI is evaluated to have sufficient upside potential after listing. Based on last year's offering price, the enterprise value to EBITDA (EV/EBITDA) ratio was 8.3 to 9.3 times, whereas competitor SciPlay is trading at over 11 times this year, implying a discount rate of about 15 to 25%.

Seungtaek Hwang, a researcher at Hana Financial Investment, stated, "If we consider this year, the discount rate will be even larger," adding, "Many companies in the U.S. market have set their listing prices above the offering price through short roadshows and IPO marketing after the offering price announcement, so the listing value is likely to exceed the offering price-based valuation."

Additionally, since April, the worsening COVID-19 situation in North America has reduced outdoor activities and led to the closure of offline casinos, creating favorable external conditions for the social casino market, which has also supported the stock price. Due to the COVID-19 effect, the average daily payment amount in April grew by more than 30% compared to the first quarter. Although economic activities in the U.S. have partially resumed, restrictions on outdoor activities remain, suggesting that the social casino market boom will continue for the long term.

Jonghwa Sung, a researcher at eBest Investment & Securities, analyzed, "The COVID-19 situation in the U.S. has not significantly improved, and since most users of DoubleU Games' casino games are elderly, payment amounts are unlikely to drop sharply," adding, "The sales growth effect from COVID-19 is not a temporary benefit but largely a structural market expansion."

With the subsidiary's listing expectations combined with the COVID-19 special demand, there are forecasts for strong performance even in the second quarter. According to financial information provider FnGuide, DoubleU Games' sales in the second quarter of this year are estimated at 163.5 billion KRW, up 25.8% year-on-year, and operating profit is expected to increase by 30.8% to 52.7 billion KRW.

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