[Click eStock] "NHN, Steady 2Q and Promising 3Q Ahead"

Effect of Web Board Game Regulation Relaxation UP... Synergy with New Releases in the Second Half
Growth Trend in Lifestyle Finance Businesses like Payco

[Asia Economy Reporter Minwoo Lee] NHN is expected to achieve more than 8% growth in both sales and operating profit in the second quarter of this year compared to the same period last year. As the effect of the web board game payment limit regulation grows stronger in the second half, it is analyzed that NHN can achieve good performance through new game releases and the government's MyData business (personal credit information management).

On the 21st, Shinhan Financial Investment forecasted that NHN would record sales of 398.5 billion KRW and operating profit of 28.3 billion KRW in the second quarter of this year. This represents an 8.8% increase in sales and an 11.4% increase in operating profit compared to the second quarter of last year. Although slightly below the market consensus forecast of 402.8 billion KRW in sales and 29.9 billion KRW in operating profit, it is evaluated as a decent performance.

Researcher Moonjong Lee of Shinhan Financial Investment explained, "Due to the strong performance of web board games, PC game sales are expected to increase by 2.1% quarter-on-quarter despite the off-season, but mobile sales are expected to slightly decrease due to the lack of updates for existing mobile games (Japan)." He added, "Business units such as Ticketlink and Yeohaengbaksa, which were affected by the COVID-19 pandemic, have not yet recovered, which is a burden on performance."

The outlook for the second half is bright. Despite being the first quarter after the relaxation of the web board game payment limit regulation, improvements in indicators such as the number of paying users and average revenue per user (ARPU) have already been confirmed due to increased game usage time. The effect of this regulatory relaxation is expected to grow stronger in the second half. The release of new games is also a positive factor. Starting with 'Yongbi Bulpae M,' based on a martial arts comic intellectual property (IP) in the third quarter, new titles based on Tsum Tsum Stadium and animation IP will be released in Japan within the year.

The simple payment service Payco is also expected to perform well. While the coupon service is growing steadily, it is expanding into lifestyle finance areas such as 'Payco Order,' selection as the preferred negotiator for the Gyeonggi-do public delivery app, and loan brokerage (expanding partnerships). Researcher Lee said, "The government's selection of MyData business operators in the second half is also a promising aspect," and added, "It is undoubtedly a promising candidate for the second half."

Against this background, Shinhan Financial Investment maintained a 'Buy' rating on NHN and raised the target price by 9.5% to 115,000 KRW. The closing price on the previous day was 82,200 KRW.

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