[Click eStock] "Com2uS, Stock Price Drop Is Excessive... 'Baeknyeon Jeonjaeng' Is Performing Well"

'Summoners War: Baeknyeon Jeonjaeng' is Performing Well
"Daily Average Sales Increasing... Strong Performance Expected This Year"

[Asia Economy Reporter Minwoo Lee] An analysis has emerged that Com2uS's recent stock price decline is excessive. Although the first-quarter performance was somewhat sluggish, this was only due to a one-time increase in labor costs, and the new title 'Summoners War: Hundred Years' War' is navigating better than expected.

On the 13th, Daishin Securities maintained a 'Buy' rating on Com2uS with this background and raised the target price by about 4.5% to 230,000 KRW. The closing price the previous day was 137,500 KRW.

Previously, Com2uS's stock price began to plunge right after the release of 'Summoners War: Hundred Years' War' on the 29th. On the 30th alone, the closing price dropped by 13.24%. The downward trend continued, closing at 132,000 KRW on the 11th. Compared to the closing price of 166,200 KRW on the day before the release, the 28th, it fell more than 20% in just over ten days.

The initial performance of 'Summoners War: Hundred Years' War' fell short of expectations, and the first-quarter results were also weaker than anticipated. Com2uS recorded consolidated sales of 116.7 billion KRW and operating profit of 17.7 billion KRW in the first quarter of this year. Sales increased by 19% year-on-year, but operating profit decreased by 25%. Compared to the previous quarter, sales and operating profit decreased by 13% and 29%, respectively. Mina Lee, a researcher at Daishin Securities, explained, "The weaker-than-expected operating profit was due to increased labor costs," adding, "Labor costs rose 45% year-on-year to 23.7 billion KRW due to the reflection of one-time incentives."

The initial performance of 'Summoners War: Hundred Years' War' was also evaluated as below expectations. As of the previous day, the iOS revenue rankings in major countries were 25th in France, 36th in the Philippines, 40th in Thailand, and 54th in Korea. Google Play revenue rankings were 10th in France, 14th in Thailand, 28th in Singapore, 28th in Indonesia, and 30th in Korea.

However, the actual performance is analyzed to be better than expected. The researcher explained, "Countries where the original Summoners War was popular, such as the United States and Japan, are missing, and the number of countries ranking within the top 50 in revenue is also fewer compared to Summoners War. However, it is difficult to accurately estimate revenue by rank in each country, and in countries like France, the revenue ranking is higher compared to Summoners War." This supports Com2uS's claim that the daily average revenue of 1 billion KRW since the release is reasonable.

Daishin Securities estimated the daily average revenue of 'Summoners War: Hundred Years' War' in the second quarter at 500 million KRW, considering uncertainties. It is expected to increase further with upcoming content updates and item promotion events. Taking this into account, operating profit for this year is projected at 167.7 billion KRW, and net profit at 164.2 billion KRW, representing increases of 49% and 118%, respectively, compared to last year. The researcher advised, "The current price-to-earnings ratio (PER) based on this year's earnings is only 10.3 times," and recommended, "It is necessary to use the recent correction as a buying opportunity."

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