[Click eStock] "Kakao Games, Profit Improvement Expected with 'Odin' Global Expansion"

Samsung Securities Report

[Asia Economy Reporter Minji Lee] On the 1st, Samsung Securities maintained a buy rating on Kakao Games and set a target price of 120,000 KRW for the first time. This is based on the expectation of a significant improvement in operating profit next year due to the prolonged sales from Odin's global expansion and the consolidation of Lionheart.

Since its domestic release in June, Odin has proven its popularity by ranking first on the two major markets. Although its sales ranking dropped due to the release of the competing game Lineage W, it is estimated that sales are still maintained around 2 billion KRW. Samsung Securities researcher Donghwan Oh stated, “Domestic sales of Odin are expected to gradually decline and stabilize, but since global expansion is scheduled to start with Taiwan in the first half of next year, prolonged sales are possible.”

The acquisition effect of Lionheart Studio is also anticipated. With the decision to acquire additional shares, the stake will increase from the existing 21.6% to 52%. From the point when Lionheart’s performance is consolidated, a significant increase in Kakao Games’ consolidated operating profit is expected, and the effects of Odin’s release in other overseas regions (North America, Japan, China) are also expected to be fully recognized.

Next year, the release of multiple new titles including Uma Musume is planned, raising expectations for additional growth. In particular, Uma Musume has been a mega hit since its release in Japan last February, consistently ranking 1st to 3rd in sales rankings and achieving initial daily sales exceeding 10 billion KRW, so it is judged to have high potential for success domestically.

Researcher Donghwan Oh added, “It is judged that new growth drivers have been secured through the release of multiple new titles, NFT marketplaces, and blockchain game development,” and “Considering the valuation premium based on high growth potential, applying a price-to-earnings ratio (PER) multiple of 34.4 times, which is at the upper band level of domestic and international game companies, is justifiable.”

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