Institutions on 9th Day of 'Palja'... NC Drops 20% After Hitting Peak

[Asia Economy Reporter Koh Hyung-kwang] The stock price of NCSoft, the leading non-face-to-face (untact) company, is slipping just before reaching the 1 million won mark. The stock price is wavering as forecasts suggest that the second-quarter earnings will be lower than expected. However, securities firms predict a rebound in the second half of the year, driven by the overseas launch of 'Lineage 2M'.

According to the Korea Exchange on the 27th, NCSoft was traded at 794,000 won on the KOSPI market as of 9:50 a.m., down 1.0% from the previous trading day. Compared to the closing price of 995,000 won on the 6th, which was the highest closing price, it is a 20.2% decline. Since the outbreak of the novel coronavirus disease (COVID-19), NCSoft's stock price has risen sharply, reaching as high as 997,000 won during trading on the 6th, nearly reaching the 1 million won mark. Securities firms have consecutively raised their target prices for NCSoft, with Mirae Asset Daewoo setting it as high as 1.31 million won.

However, the stock price began to decline from the day after reaching its peak and is currently more than 20% below the high point. Institutional investors have sold NCSoft shares for nine consecutive trading days from the 14th to the previous day. The selling amount reached 130 billion won. During this period, foreigners also net sold 180 billion won. Only individual investors bought nearly 300 billion won worth of shares.

The slowdown in NCSoft's upward momentum is due to news that the second-quarter earnings will be worse than expected. KB Securities recently forecasted NCSoft's second-quarter sales at 609.3 billion won and operating profit at 231.2 billion won, which are 4.1% and 6.0% below consensus, respectively. IBK Investment & Securities also estimated NCSoft's second-quarter operating profit at 236.9 billion won, a 1.9% decrease from the previous quarter. Researcher Lee Dong-ryun of KB Securities said, "Due to large-scale updates and event-related issues, a decline in sales of main mobile and PC games is expected," adding, "The second-quarter sales of Lineage M and Lineage 2M are expected to decrease by 7.8% and 28.5% from the previous quarter to 195.5 billion won and 243.8 billion won, respectively."

The fact that NCSoft's 'Lineage 2M' sales lagged behind competitor games also negatively affected the stock price. According to the gaming industry, Nexon's new game 'Baram-ui Nara, Yeon' recently pushed Lineage 2M down to third place in the domestic Google Play game sales ranking and rose to second place. However, many hold a positive outlook for the future. Choi Jin-sung, a researcher at Hyundai Motor Securities, predicted, "In the second half of the year, with the release of the new game Blade & Soul 2 and the overseas launch of Lineage 2M scheduled, a positive earnings trend will continue." Researcher Lee Min-ah of Daishin Securities also said, "Expectations will continue to rise ahead of the overseas launch of Lineage 2M," setting the target price at 1.2 million won.

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