[Click eStock] "Pearl Abyss Lowers Earnings Estimates for Existing Games and New Releases... Target Price Down 15%"

Daishin Securities Report

[Asia Economy Reporter Minji Lee] Daishin Securities maintained a buy rating on Pearl Abyss on the 16th and set the target price at 110,000 KRW, 15% lower than the previous target. This adjustment was due to the downward revision of earnings estimates for existing games and upcoming new titles.

In the fourth quarter of last year, Pearl Abyss recorded sales of 118 billion KRW and an operating profit of 25.7 billion KRW, representing growth of 11.7% and 28.5% respectively compared to the same period last year. These figures exceeded market expectations of 107 billion KRW and 17 billion KRW respectively. However, excluding the earnings from its subsidiary Pearl Abyss Capital, game sales amounted to 85.4 billion KRW, a 17% decrease compared to a year earlier. Researcher Ji-eun Lee from Daishin Securities stated, “As sales of existing titles have stabilized at a lower level, expectations for the launch of Black Desert Mobile in China have become even more urgent.”

The launch of Black Desert Mobile in China is expected to experience slight changes but is planned to be released quickly after the closed beta test (CBT) within the first quarter. The CBT schedule and release date have reportedly already been finalized. Researcher Ji-eun Lee said, “The local distributor is also increasing marketing efforts, and the game was selected as one of the 11 most anticipated releases this year on China’s game portal 1713.com,” adding, “Initial daily sales after launch are estimated to be in the mid-3 billion KRW range.”

In the third quarter, Pearl Abyss’s subsidiary Big Game Studio is preparing to release a new title (Black Clover IP, RPG mobile). In the fourth quarter, Red Desert (open-world action adventure, PC and console) is expected to be launched globally. Researcher Ji-eun Lee explained, “The company’s blockchain and metaverse businesses, including CCP Games, will be actively pursued in 2023 rather than this year,” and added, “This year, the focus is expected to be on IP expansion and financial growth through the release of three new titles.”

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