"Com2uS Expected to Miss Q1 Earnings Consensus"

[Asia Economy Reporter Jang Hyowon] Korea Investment & Securities lowered the target price for Com2uS to 170,000 KRW on the 16th, stating that the company's first-quarter earnings this year are expected to fall short of the market consensus.

Jung Hoyoon, a researcher at Korea Investment & Securities, analyzed, "Com2uS's first-quarter revenue and operating profit are expected to be 145 billion KRW and 5.9 billion KRW respectively, representing a 24.3% increase and a 66.8% decrease compared to the same period last year," adding, "This is about 34% below the consensus."

He explained that generally, the first quarter is an off-season for games, and with the removal of the Summoners War event effect from the fourth quarter, Summoners War's revenue is expected to decrease by 5% year-on-year to 81.9 billion KRW. Additionally, total operating expenses are anticipated to increase by 40.5% year-on-year to 139.1 billion KRW, which is expected to reduce profits.

Researcher Jung maintained a positive view on Summoners War: Chronicle, scheduled for release in the second half of the year, stating, "The introduction of the P2E system could positively impact daily sales, and since this is Com2uS's first major new title in a long time, aggressive marketing for its success is expected, which will synergize with P2E."

He interpreted, "As Summoners War ages, its revenue continues to decline, and with increasing fixed costs such as labor expenses, profit resilience is weakening, which has been a major cause of the recent stock price decline."

He added, "Reflecting the delay in the release schedule of Summoners War: Chronicle and the increased cost burden leading to reduced profit resilience, we have lowered the 2022 net profit estimate by 32.9% compared to the previous forecast. Although investors are reacting more sensitively to uncertainties unique to game stocks, such as new release schedules and success prospects due to macro environment changes like rising interest rates, we maintain a positive view on the potential success if the second-half release schedule is met."

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