[Click eStock] "Kakao Games, 'Odin' Is Already a Cash Cow"

Odin Six Months After Release... Entering a Downward Stabilization
NH Investment "Kakao Games Target Price Lowered from 130,000 KRW to 115,000 KRW"

[Asia Economy Reporter Gong Byung-sun] Kakao Games' flagship title Odin is showing a decline in revenue. However, NH Investment & Securities analyzes that it will still serve as a cash cow.

On the 12th, NH Investment & Securities maintained its 'Buy' rating on Kakao Games but lowered the target price from 130,000 KRW to 115,000 KRW. The previous day's closing price was 72,700 KRW.

The decline in Odin's revenue is interpreted as having affected the target price. Odin's revenue, which reached 320 billion KRW in the third quarter of last year, is expected to decrease to 192 billion KRW in the fourth quarter of last year. In this situation, Kakao Games' fourth-quarter performance last year also fell short of expectations. NH Investment & Securities estimated Kakao Games' fourth-quarter revenue last year to be 313.8 billion KRW, a 120.9% increase compared to the same period the previous year, and operating profit to be 51.2 billion KRW, a 209.3% increase over the same period. The operating profit is about 27.68% below the market consensus.

However, Odin is expected to continue playing the role of a cash cow for Kakao Games in the future. Jaemin Ahn, a researcher at NH Investment & Securities, said, "Since six months have passed since its release, it is naturally entering a downward stabilization phase," and added, "Odin will serve as a cash cow, and the inclusion of the developer 'Lionheart' in consolidated earnings will greatly contribute to this year's performance growth."

New growth businesses such as the metaverse and non-fungible tokens (NFTs) are also anticipated. With Namgung Hoon, former CEO of Kakao Games, appointed as head of Kakao's Future Initiative Center responsible for future new businesses, the new projects Kakao Games is pursuing are expected to play a significant role within the Kakao community.

New titles are also in preparation. 'Uma Musume,' which was a hit in Japan last year, is scheduled for release in the first half of this year. Following that, new titles such as 'Goddess Order,' 'Eversoul,' 'Project ARES,' and 'Distera' will be unveiled this year.

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