[Click eStock] “NCSoft, Short-Term Focus Needed on Lineage W Performance”

New Lineage W Scheduled for Release on November 4
EBest Investment & Securities Lowers NCSoft Target Price from 700,000 KRW to 640,000 KRW

[Asia Economy Reporter Gong Byung-sun] NCSoft's third-quarter earnings this year are expected to fall significantly short of market consensus. However, the stock price is likely to respond more to the performance of the upcoming new release, Lineage W, than to the earnings.

On the 7th, Ebest Investment & Securities estimated NCSoft's third-quarter revenue to be 543.3 billion KRW, down 7.2% year-on-year, and operating profit to be 102.6 billion KRW, down 52.8% over the same period. These figures are 7.5% and 30.7% below the consensus estimates of 587.2 billion KRW and 148.2 billion KRW, respectively. However, many of the current consensus forecasts did not reflect the poor performance of Blade & Soul 2.

The weak performance of the new release is interpreted as having a negative impact on the third-quarter earnings. Ebest Investment & Securities had previously lowered the daily average sales of Blade & Soul 2 in Korea from the mid-3 billion KRW range to the low 1 billion KRW range. Additionally, the momentum from new releases has been lost, and the premium of being the top MMORPG (Massively Multiplayer Online Role-Playing Game) company has disappeared.

However, the performance of Lineage W, which will be released on November 4, is expected to have a greater impact on the stock price than the third-quarter earnings. Lineage W is scheduled to be launched in 13 countries, including Korea, Japan, Taiwan, Hong Kong, Singapore, Thailand, the Philippines, Malaysia, Indonesia, Russia, Saudi Arabia, the United Arab Emirates (UAE), and Qatar.

Seong Jong-hwa, a researcher at Ebest Investment & Securities, said, "In the short term, the performance of Lineage W will determine whether the stock price rebounds." He added, "Considering that Lineage W has significantly eased monetization elements in response to criticism about in-game charges, and that the first quarter will have 58 operating days compared to 36 days for Blade & Soul 2, the daily average sales in the fourth quarter are expected to be higher than the low 1 billion KRW range."

However, there is also a possibility of poor performance. Researcher Seong explained, "It is difficult to predict the level of success of Lineage W in the 13 countries. Having recently experienced a sharp drop in stock price due to the poor performance of Blade & Soul 2, it is also difficult to take aggressive preemptive measures."

Accordingly, Ebest Investment & Securities maintained its investment opinion on NCSoft as 'Hold'. The target price was lowered from 700,000 KRW to 640,000 KRW. The closing price on the previous day was 560,000 KRW.

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