[Click eStock] "Webzen Enters Momentum Weakening Phase... Target Price Downgraded"

[Asia Economy Reporter Ji-hwan Park] IBK Investment & Securities stated on the 9th that Webzen has entered a momentum weakening phase, maintaining a 'Buy' investment rating but lowering the target price to 34,000 KRW.

Lee Seung-hoon, a researcher at IBK Investment & Securities, said, "Webzen's third-quarter earnings fell short of market expectations," adding, "Third-quarter revenue was 66.4 billion KRW, and operating profit was 16.3 billion KRW, down 37.9% and 62.4% respectively compared to the previous year." Net income attributable to controlling interests during the same period was 14.4 billion KRW, a decrease of 57.4%. Revenue was 3.6% below consensus, and operating profit was 24.2% below consensus.

Researcher Lee stated, "Although the new mobile game Mu Ark Angel 2 was released, sales declined year-on-year as existing games aged." He analyzed that the previous year's third quarter recorded record-high revenue due to the success of Mu Ark Angel and R2M, causing a significant base effect this quarter.

Mu Ark Angel 2 initially ranked within the top 10 in Google revenue rankings after its September release but has since stabilized outside the top 10. The Mu IP and R2 IP games decreased by 37.6% and 43.5% respectively compared to the same period last year. The researcher said, "In the fourth quarter, sales of Mu Ark Angel 2 are expected to be fully reflected, and the peak season effect will be factored in, with existing games' sales also expected to rebound."

Since there are currently no new releases in sight, the possibility of valuation expansion due to short-term momentum is limited. Researcher Lee noted, "Recently, the issuance of new game licenses in China has not been granted, delaying the release of games utilizing the company's IP in China," adding, "Although new titles such as Webzen Blue Rock and Webzen Nova are being developed through subsidiaries, their release schedules remain unclear." He emphasized, "Based on abundant financial resources, there is sufficient growth potential through IP investment, blockchain technologies such as NFTs, and mergers and acquisitions (M&A) of development companies."

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