[Click eStock] "Netmarble, Success of Je2-ui Nara is Key"

[Asia Economy Reporter Minji Lee] On the 17th, SK Securities maintained a neutral investment opinion and a target price of 136,000 KRW for Netmarble.

In the first quarter, Netmarble recorded sales of 570.4 billion KRW, a 7% increase compared to the same period last year. Operating profit also rose by 7% to 54.2 billion KRW, but did not reach the market expectation of 100.8 billion KRW.

Jinman Lee, a researcher at SK Securities, analyzed, “Among major titles, the North American sales of ‘The Seven Deadly Sins’ rebounded due to an update effect, but the daily sales of Seven Knights 2, released in November last year, declined. Due to the decrease in sales of other existing titles and increased labor costs from salary raises, operating profit, which had been maintained at around 80 billion KRW, showed a downward trend.”

In the second quarter, cost increases are expected due to new releases. Netmarble plans to launch ‘The Second Country,’ a mobile MMORPG based on Studio Ghibli animation IP, on the 10th of next month. Only partial sales from The Second Country will be reflected, and operating profit is expected to decline due to large-scale marketing before release and rising labor costs.

Accordingly, market interest is expected to shift to the second half of the year when the performance of The Second Country, Seven Knights Revolution, and Marvel Future Revolution will be reflected. Following the new title briefing, reflecting the interest in The Second Country, the first quarter daily average sales of The Second Country and Seven Knights Revolution are expected to reach around 2 billion KRW. Researcher Jinman Lee explained, “Since both titles are key works for the company this year, if they settle in major markets such as Korea, Japan, and Taiwan and enable long-term service, the sales level, which currently remains at around 500 to 600 billion KRW, will be upgraded to the next level.”

SK Securities lowered its operating profit forecast for this year to 316.7 billion KRW, considering the stabilization of existing titles’ sales due to the decrease in COVID-19 benefit effects and increased labor costs. The researcher stated, “Although an upward revision of operating profit is expected with new releases, considering the limited upside potential compared to the current stock price and the limited information on new titles, we maintain the existing investment opinion.”

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