[Click eStock] "Pearl Abyss, Short-Term Stagnation... Mid-to-Long-Term Growth Potential Remains Valid"

[Asia Economy Reporter Oh Ju-yeon] SK Securities analyzed on the 4th that Pearl Abyss will inevitably face short-term growth stagnation due to a new release gap lasting until the end of next year, but its mid- to long-term growth potential remains valid. While short-term attractiveness is somewhat diminished, the investment rating and target price were maintained at 'Neutral' and 205,000 KRW, respectively.

SK Securities forecasted Pearl Abyss's Q3 revenue to be 126.8 billion KRW and operating profit to be 45.2 billion KRW, slightly below consensus. The main reasons cited were the natural decline in Black Desert PC sales, which had sharply rebounded in Q2 due to the COVID-19 pandemic benefits, decreased sales of Black Desert Mobile outside the domestic market, and the underwhelming performance of the mobile new release Eve Echoes by Icelandic subsidiary CCP Games launched in August.

Although new releases within the year and the launch of new consoles are positive factors, the continuation of the new release gap until the end of next year is considered a downside.

Lee Jin-man, a researcher at SK Securities, stated, "Pearl Abyss is expected to hold a showcase event for the new PC and console MMORPG Red Desert with its partners within this year. Unlike last year's domestic game show G-STAR, where only short videos of three new titles were revealed, this time, in-game footage of Red Desert and information such as the release timeline are anticipated to be disclosed."

He added, "Additionally, the release of new consoles PS5 and Xbox Series X/S in November is a positive factor, but there will still be no significant new releases until the end of next year. Moreover, Eve Echoes, released in August, has shown below-expectation results, so it is unlikely to contribute to performance defense."

The researcher also noted, "It should be considered that recent distortions in supply and demand caused by the inclusion in BBIG and Game New Deal indices and the prolonged ban on short selling are affecting the market."

While mid- to long-term growth potential remains valid, the short-term outlook is somewhat conservative, leading to the maintenance of a 'Neutral' investment rating.

Lee said, "Considering Pearl Abyss's excellent development capabilities with its proprietary engine, proven overseas success across multiple platforms through Black Desert, and a large new release lineup, the mid- to long-term potential is high, but the short-term attractiveness is judged to be somewhat low."

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