[Click eStock] "NeoWiz's 4Q Slump, Aiming for Rebound This Year with Around 10 New Titles"

Most New Releases Launched on 'Steam' Platform... Expectations for Performance Rebound

[Asia Economy Reporter Minwoo Lee] Neowiz is expected to post earnings below expectations for the fourth quarter of last year. However, it is analyzed that the company can rebound this year with the planned release of around 10 new titles and steady revenue from web board games.

On the 21st, NH Investment & Securities forecasted that Neowiz would record consolidated sales of 78.1 billion KRW and operating profit of 11.6 billion KRW for the fourth quarter of last year. This represents an increase of 8.0% and 14.3%, respectively, compared to the same period last year. Nevertheless, operating profit is expected to fall significantly short of the market consensus of 15 billion KRW. The main reasons are the disappearance of regulatory easing effects from the second quarter leading to slower growth, PC room closures due to COVID-19, and a decline in sales of games released on the Steam platform in the third quarter. The annual incentives executed in the fourth quarter (estimated at 5 billion KRW) are also expected to be reflected in labor costs.

This year, with the release of around 10 new titles and steady growth in revenue from web board games, which are a source of cash flow, performance improvement is expected. NH Investment & Securities projected Neowiz’s operating profit to reach 67.5 billion KRW this year, an increase of 14.4% compared to last year.

Jae-min Ahn, a researcher at NH Investment & Securities, said, "Skull, which recorded favorable sales by entering the top 5 in sales rankings during the early access period on the Steam platform last year, is officially launching on the 21st, so meaningful sales results are expected." He added, "In addition, several PC games (Metal Unit, Blade Assault, Samangyeog, Dandy Ace, Bless Unleashed, AVA, Elion (Japan)) are preparing for release. Most of these will be launched on Steam, the world’s largest global PC game platform, targeting the global market, and 2 to 3 mobile games will also be released."

Against this backdrop, NH Investment & Securities maintained a 'Buy' investment rating and a target price of 31,000 KRW for Neowiz. The closing price on the previous day was 24,300 KRW.

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