[Click eStock] "Kakao Games, New Release Big Hit Overreaction... Investment Opinion Upgraded to 'Strong Buy'"

[Asia Economy Reporter Hwang Yoon-joo] Daol Investment & Securities evaluated that the stock price decline of Kakao Games is excessive, citing the encouraging performance of the new title 'Uma Musume.' Accordingly, the investment opinion was upgraded from 'Buy' to 'Strong Buy,' while maintaining the target price at 83,000 KRW.

Kim Ha-jung, a researcher at Daol Investment & Securities, stated, "'Uma Musume: Pretty Derby' achieved the No. 1 spot in iOS sales within 11 hours of its release on the 20th," adding, "This is faster than Lineage W, which reached No. 1 in 14 hours."

Researcher Kim said, "The initial daily sales of Uma Musume recorded about 3 billion KRW, significantly exceeding market expectations (daily sales of 0.5 to 1 billion KRW)," and predicted, "We expect it to easily achieve the projected daily sales of 1.1 billion KRW for this year."

Kim viewed the sustainability of the new title's sales, Q2 earnings, and prospects for additional new titles all positively. He assessed, "Uma Musume is not a game with concentrated early sales, so we expect a gradual sales decline and stabilization similar to Japan."

Regarding Q2 operating profit, he analyzed, "Based on the performance of 'Odin' in Taiwan, it will significantly exceed the consensus of 86.7 billion KRW," adding, "The app market commission ratio is relatively low, and marketing efficiency is considered higher than domestic Odin, so an operating profit increase of 70 to 80 billion KRW compared to the previous quarter is expected based solely on Taiwan."

He continued, "The subsidiary XL Games is preparing to concretize the release of a new mobile title," adding, "XL Games is a subsidiary holding 36% of Kakao Games' development personnel, so expectations for key new titles are also expected to be high."

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