[Click eStock] NCSoft, Blockbuster Hits Incoming... Target Price Raised to 1.75 Million Won

[Asia Economy Reporter Ji Yeon-jin] Mirae Asset Daewoo announced on the 24th that it has raised the target stock price of NCSoft from the previous 1.26 million KRW to 1.75 million KRW, forecasting that NCSoft will achieve the best performance among global gaming companies due to the release of new games expected to be hits this year.

Since its founding, NCSoft has had a hit rate of 87.5% for new game releases. Seven out of eight games were successful, with only Tabula Rasa failing. The biggest risk in investing in NCSoft is the delay in new game release schedules, but currently, multiple new games are planned annually through 2023. In the first quarter of this year, releases of 'TricksterM', 'Lineage 2M' (Japan and Taiwan), and 'H3' are scheduled, and the release of 'Blade & Soul 2', which had been postponed several times, also began pre-registration on the 9th.

Sales for this year and next are expected to increase by 37.6% and 46.4% respectively compared to the previous year, and with the addition of various new game lineups, the company is expected to enter a performance growth phase at least until 2023. The profit and loss structure characteristic of gaming companies is fixed costs and a low proportion of variable costs. Operating profit margin, which was 34.1% last year, is expected to improve to 34.7% this year and 38.9% next year.

Kim Chang-kwon, an analyst at Mirae Asset Daewoo, said, "Due to the anticipation of consecutive game releases, NCSoft's stock price is expected to enter a high PER zone for a long period," adding, "Interest in the cyber world 'Metaverse', where virtual reality becomes an important element of life, is increasing, and new value metrics such as game life cycle, dwell time, and game usage immersion can be applied."

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