[Click eStock] "Is Odin's 'Effect' Over... Kakao Games Enters a Breather"

Stock Price Drops About 20% in the Past Month... Odin Momentum Exhausted
Watch for Odin Developer's Consolidation and New Releases Like 'Uma Musume'

[Asia Economy Reporter Minwoo Lee] Kakao Games' stock price has been declining continuously recently, leading to an assessment that the hit game 'Odin' is entering a pause phase in its popularity. There is an analysis that attention should be paid to the consolidation of Lionheart, the developer of Odin, and the performance of new releases such as Uma Musume.

On the 24th, Ebest Investment & Securities lowered Kakao Games' target stock price by 14% to 90,000 KRW, citing these reasons. The closing price the previous day was 68,900 KRW. The investment opinion 'Buy' was maintained.

Although the third-quarter earnings are expected to be decent, they are anticipated to fall short of previous forecasts. Ebest Investment & Securities projected that Kakao Games will record consolidated sales of 425.2 billion KRW and operating profit of 57.4 billion KRW in the third quarter of this year. Compared to the same period last year, sales increased by 182.5% and operating profit by 170.8%. Compared to the previous quarter, these figures rose by 228% and 609%, respectively. This is because the revenue from Odin, which has been a hit since its release on June 29, was fully reflected. Nevertheless, the operating profit is below both Ebest Investment & Securities' previous forecast and the market consensus. Researcher Seong Jong-hwa of Ebest Investment & Securities explained, "This is due to incentive payments from Odin's super hit and marketing costs exceeding expectations."

As the momentum of Odin's success has come to an end, the stock price appears to be undergoing a correction. From the 26th of last month to the previous day, the closing price fell by about 19.3%. With the disappearance of Odin's new release momentum, the third-quarter earnings momentum is also being exhausted. Researcher Seong said, "However, the stock price has fallen excessively to a level that does not even properly reflect the value increase from Odin's huge success," adding, "There is no follow-up momentum to succeed Odin, so the stock price has entered an excessive adjustment phase."

As future mid-to-short-term drivers for stock price increases, the consolidation of Lionheart Studio, which developed Odin, and the release of the new title 'Uma Musume' were cited. Researcher Seong stated, "The current stock price does not reflect any value enhancement factors such as the improvement of consolidated earnings through exercising the call option on Lionheart Studio, internalization of Odin's intellectual property (IP), and development capabilities," adding, "Although the schedule for exercising the call option on Lionheart Studio is undecided, it will act as a significant momentum in the future." He also emphasized the importance of paying attention to the schedule of 'Uma Musume Pretty Derby,' expected to be released in the first quarter of next year.

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