[Click eStock] "Netmarble, 'Je 2-ui Nara' Hits Big... Target Price Up 20%"

Samsung Securities Report

[Asia Economy Reporter Minji Lee] Samsung Securities maintained its buy rating on Netmarble on the 11th and raised the target price by 20% to 180,000 KRW. This adjustment reflects the upward revision of operating profits for this year and next, based on the performance of new releases.

Following the release of the highly anticipated title The Second Country in Taiwan, Hong Kong, and Macau on the 8th, it was officially launched in South Korea and Japan on the 10th. The Second Country achieved success by ranking first in iOS sales in Taiwan and Hong Kong on the day of release. It also showed a smooth start by ranking first and sixth in South Korea and Japan, respectively. Researcher Donghwan Oh of Samsung Securities stated, “Considering the performance in the countries where it was released first, there is a high possibility of further ranking increases in Japan,” adding, “Taking the initial success into account, we raised the daily sales forecast for The Second Country from 1.7 billion KRW to 2.5 billion KRW.”

In the second half of the year, the releases of Marvel Future Revolution and Seven Knights Revolution are scheduled. Marvel Future Revolution, developed by Netmarble Monster?the developer of Marvel Future Fight?has a showcase planned for the 29th. Given that previous titles were officially released 2 to 3 months after their showcases, a third-quarter launch is expected. Seven Knights Revolution is also scheduled for release in the second half, so the momentum from new titles is expected to continue through the end of the year.

Revenue declines from existing games are expected to continue into the second quarter. Although The Second Country’s sales will only be reflected for 20 days in the second quarter, significant pre-marketing expenses are expected to result in an operating profit of 42.5 billion KRW for Q2, a 21% decrease compared to Q1. From the third quarter, operating profit is projected to recover to the 60 billion KRW range due to the full reflection of The Second Country’s sales and new revenue from Marvel Future Revolution.

Researcher Donghwan Oh analyzed, “Reflecting the better-than-expected performance of new titles, operating profits for this year and 2022 have been raised by 2.1% and 11.5%, respectively,” adding, “Although the decline in revenue from existing games has lowered the operating profit base, the initial success of The Second Country has exceeded expectations, and with two major releases in the second half and the upcoming Kakao Bank IPO, there is ample momentum for stock price growth.”

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