[Click eStock] "Netmarble, Stock Price Already Reflects Investment Asset Value"

[Asia Economy Reporter Oh Ju-yeon] Daishin Securities analyzed that although short-term stock price volatility of Netmarble may increase following the stock price trend after Big Hit Entertainment's listing, the upside is limited at the current stock price even when considering all equity values. Accordingly, they maintained a 'Sell' investment rating and raised the target price to 110,000 KRW.

On the 13th, Daishin Securities valued Netmarble's operating asset value at 5.9 trillion KRW by applying a 20% discount and a 13.1x multiple of the 12-month forward (12MF) EV/EBITDA average of nine global gaming companies to the 12MF EBITDA. Additionally, the investment asset value was assumed as follows: Big Hit Entertainment's fair value of 6.2 trillion KRW with a 26% stake and a 20% discount rate applied; NCSoft and Coway equity values at 1.5 trillion KRW and 1.2 trillion KRW respectively; and other investment assets including Kakao Games and Kakao Bank at 409.9 billion KRW.

Researcher Lee Min-ah stated, "There is a possibility of increased short-term stock price volatility depending on Big Hit Entertainment's stock price trend after its listing. However, even considering all equity values, the upside at the current stock price is limited."

They expected third-quarter operating profit to meet consensus. Daishin Securities forecasted Netmarble's third-quarter revenue at 638.7 billion KRW, a 3% increase year-on-year, and operating profit at 78.2 billion KRW, a 7% decrease, aligning with the consensus of 79.9 billion KRW.

Researcher Lee evaluated, "There was no significant hit from new releases, and existing game sales are expected to naturally decline. The 'BTS Universe Story' released on September 24 will also have limited contribution to earnings." Due to the absence of new releases, marketing expenses are expected to decrease to 89.4 billion KRW.

In the fourth quarter, releases are planned for Seven Knights 2 (MMORPG), Marvel Realm of Champions (Action RPG), Seven Knights Time Wonderer (Turn-based RPG), and A3: Still Alive (MMORPG, global).

Lee said, "Recently, mobile MMORPGs have a limited genre preference mainly in the domestic market, and domestic mobile MMORPG competition is intensifying. Compared to Seven Knights 2, games utilizing the Marvel IP and 'Seven Knights Time Wonderer' released on Nintendo Switch are more anticipated."

She added, "Netmarble's strength lies in producing multiple games across various genres. In the long term, we expect the addition of diverse lineups that can be integrated into the console and cloud gaming markets."

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