[Click e-Stock] "NCSoft Judged as Healthy Pause-Type Correction"

Ebest Investment & Securities Issues 'Buy' Rating and 1.1 Million KRW Target Price... Closing Price on 5th at 789,000 KRW

[Asia Economy Reporter Kum Boryeong] NCSoft's stock price has undergone a correction after the Q2 earnings announcement, but it is analyzed as a 'breather-type' adjustment.

According to Ebest Investment & Securities on the 6th, NCSoft's stock price corrected by about 12% following the Q2 earnings announcement. Researcher Sung Jonghwa of Ebest Investment & Securities explained, "'Lineage 2M' disappointed investors as the slight rebound expectations for Q3 formed immediately after the Q2 earnings announcement did not materialize, and instead, a downward stabilization process continued in Q3. Additionally, concerns arose that the launch schedules for 'Blade & Soul 2' in Korea and Lineage 2M in Taiwan, targeted for Q4, might be delayed by 1 to 2 months due to work-from-home measures caused by the COVID-19 pandemic. Considering these realistic reasons, this is judged to be a healthy breather-type correction."

Q3 sales are estimated to increase slightly compared to Q2. PC games are expected to remain largely unchanged. However, with 'Lineage M' in Korea strongly rebounding and Lineage 2M Korea continuing its downward stabilization pattern, an overall 6% rebound compared to the previous quarter is anticipated. Operating profit is expected to be similar or slightly decreased compared to the previous quarter due to increased marketing and other expenses.

Researcher Sung said, "'Lineage M' Korea saw a sharp increase in users and sales following the 3rd anniversary event on June 24 and the Titan content update on July 8, and this momentum has been maintained for three months. Although 'Lineage M' Korea's sales decreased by 25% in Q2 compared to the previous quarter, it is expected to surge by more than 30% in Q3, recovering to Q1 levels." He added, "On the other hand, Lineage 2M Korea was expected to slightly rebound due to the siege warfare update on August 12 compared to the previous quarter, but the early launch downward stabilization pattern continues, so a slight decrease is expected."

Ebest Investment & Securities gave NCSoft a 'Buy' rating with a target price of 1.1 million KRW. The closing price on the 5th was 789,000 KRW. Researcher Sung said, "The destination remains the same. It's just taking a short break. We maintain an active view."

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