[Click eStock] "NCSoft, Strengthening Momentum for New Releases and Overseas Expansion from Next Year"

Q4 Earnings Expected Slightly Below Consensus
IBK Investment & Securities "NCSoft, Target Price Maintained at 1.03 Million KRW"

[Asia Economy Reporter Gong Byung-sun] NCSoft's fourth-quarter earnings this year are expected to slightly miss market consensus. However, IBK Investment & Securities anticipates a rebound in next year's performance, supported by new releases and overseas market expansion.

On the 10th, IBK Investment & Securities estimated NCSoft's Q4 revenue to be 794.4 billion KRW, a 41.5% increase year-over-year, and operating profit to be 219.9 billion KRW, up 40.3% from the same period last year. These figures are 2.34% and 5.95% below the respective consensus estimates.

The performance of ‘Lineage W’, officially launched on the 4th of last month, is positive. Lineage W recorded daily sales of 12 billion KRW during its first week after release, and the number of servers is expected to increase from 108 to 192 as of this date. Furthermore, although revenues from existing titles ‘Lineage M’ and ‘Lineage 2M’ have declined compared to the previous quarter, the cannibalization effect from users shifting to Lineage W is considered limited.

However, increased overall expenses are expected to negatively impact Q4 earnings. Researcher Lee Seung-hoon of IBK Investment & Securities analyzed, “Marketing expenses more than doubled compared to the previous quarter due to increased promotion of Lineage W and existing games,” adding, “Personnel costs and other expenses will also rise due to headcount increases and year-end baseball team contract issues.”

From next year, overseas expansion and new releases are expected to serve as growth momentum. Lineage W is planned to launch in North America and Europe next year. Updates including the new territory Aden, new class Dark Elf, and server invasions are also scheduled, so content exhaustion issues are not anticipated.

Additionally, multiple new games are in preparation, including the global release of Project TL. The researcher explained, “Since there is a high possibility that Play to Earn (P2E) will be applied to the Lineage intellectual property (IP), the momentum for new games will further expand.”

Accordingly, IBK Investment & Securities maintained its ‘Buy’ rating and target price of 1.03 million KRW for NCSoft. The closing price on the previous day was 737,000 KRW.

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