Kakao Games, Which Had Been Sluggish, Starts Rebound on Foreign Investors' Love Calls

[Asia Economy Reporter Song Hwajeong] Kakao Games, which had been sluggish due to a flood of institutional sell-offs, has recently started to rebound thanks to foreign investors' love calls and strong performance.

As of 9:22 a.m. on the 6th, Kakao Games was trading at 49,650 KRW, up 1.43% (700 KRW) from the previous day. It is continuing a six-day consecutive rise. Over the past five days until the previous day, Kakao Games' price had increased by 9.75%.

Kakao Games' stock price had repeatedly weakened as a large volume of institutional lock-up releases were unlocked this month. Institutions sold about 3.57 million shares worth 169.914 billion KRW of Kakao Games over the past month.

Recently, foreign investors have been net buyers of Kakao Games, defending against institutional selling pressure. Foreign investors have net purchased Kakao Games for eight consecutive days until the previous day. During this period, foreign investors bought Kakao Games worth 15.696 billion KRW.

Strong earnings and other factors appear to have contributed to the influx of foreign buying. Kakao Games recorded its highest-ever quarterly performance in the third quarter this year with sales of 150.5 billion KRW and operating profit of 21.2 billion KRW. Sales increased by 54.2% and operating profit by 177.7% compared to the same period last year. Kim Donghee, a researcher at Meritz Securities, analyzed, "Mobile game sales in the third quarter were 89.5 billion KRW, up 104.1% from the same period last year," adding, "This is due to the domestic and overseas performance of 'Guardian Tales,' and the estimated daily average sales of Guardian Tales in the third quarter were about 700 to 800 million KRW." PC game sales reached 43.9 billion KRW, up 13.4% year-on-year, as 'Black Desert' showed solid results in North America and Europe.

The upcoming release of 'Elion' next month is expected to determine Kakao Games' future growth direction. Researcher Kim said, "Elion, the most anticipated title this year, is expected to generate 60 billion KRW in sales this year," adding, "Kakao Games' mid- to long-term corporate value and growth direction in 2021 will depend on the success of Elion."

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