[Click eStock] "NCSoft, Over-sold Due to Blade & Soul 2 Box Office Failure... Target Price Down 18%"

Hyundai Motor Securities Report

[Asia Economy Reporter Minji Lee] Hyundai Motor Securities maintained a buy rating on NCSoft on the 30th, while lowering the target price by 18% from the previous level to 840,000 KRW. This adjustment reflects the judgment that earnings may fall short of expectations due to the disappointing performance of Blade & Soul 2.

Since its release on the 26th, Blade & Soul 2 has shown poor sales performance, fluctuating between 11th and 7th place. The stock price dropped by 21.3% within two days of launch, reflecting the market's perception of the game's failure to meet expectations. Consequently, earnings forecasts for the third quarter and the full year are expected to be significantly lowered. Hyundai Motor Securities analyst Hyunyong Kim stated, “Considering users' criticism of Blade & Soul 2's monetization system and gameplay, the market will closely watch whether the impact will continue to affect the success of upcoming new releases.”

However, Lineage M and Lineage 2M have firmly maintained 2nd and 3rd place in sales rankings, respectively, suggesting that the stock price slump may not be prolonged. Despite various recent controversies, Lineage M has sustained top-tier sales for four years since its launch. Lineage 2M has added approximately 90 billion KRW in quarterly overseas sales from Japan and Taiwan alone, proving its global appeal. Considering the steady sales of these two games, a bottom is expected to form around a 2024 price-to-earnings ratio (PER) of 20 times (616,000 KRW).

The high expectations for the success of Lineage 2 are also a factor to consider. The company held a Lineage W showcase on the 19th and began pre-registrations, achieving 2 million pre-registrations within just 15 hours. Given that the overseas success potential of the Lineage IP was confirmed on mobile through Lineage 2M, Lineage 2 is expected to focus on global success with its gameplay and monetization system. Analyst Hyunyong Kim explained, “Although Blade & Soul 2's initial performance was disappointing, there remains anticipation for additional major new releases within the year. The company's game development capabilities, including the 2022 Project TL, are considered unquestionable.” He added, “The sharp stock price drop has increased valuation appeal, and with the expected release of Lineage W within the year and the anticipation for new titles like Project TL, we maintain a buy rating.”

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