[Click eStock] "NCSoft, Lineage W Sales Decline Larger Than Expected"... Target Price Down

[Asia Economy Reporter Lee Jung-yoon] DB Financial Investment lowered its operating profit forecast for NCSoft by 14% this year due to an adjustment in the revenue decline of Lineage W, and downgraded the target stock price from 650,000 KRW to 560,000 KRW on the 13th. However, it maintained a buy rating, citing improved year-on-year performance in the second half due to the Lineage series and a strengthened next game lineup.

NCSoft's sales for the second quarter of this year are expected to reach 628.5 billion KRW, up 17% year-on-year, and operating profit is expected to increase by 17% to 131.5 billion KRW, falling short of the consensus estimates of 652.1 billion KRW and 156.1 billion KRW, respectively. Hwang Hyun-joon, a researcher at DB Financial Investment, explained, "Lineage M, which recently regained the number one spot in Google Play sales rankings, performed well in the second quarter, but the revenue decline of Lineage W, released in November last year, is expected to be larger than anticipated. Due to this impact, while the overall cost level excluding variable sales costs is maintained amid a shrinking top line, profitability is expected to deteriorate compared to the previous quarter."

Although the revenue decline of Lineage W is expected to be larger than anticipated, the trend of year-on-year performance improvement is expected to continue. Additionally, regional expansions of Lineage W and Blade & Soul 2, the release of the new game TL, and the concretization of new IPs such as Project E, Project R, and Project M are planned. Researcher Hwang said, "There is strong anticipation that additional new major IPs will be unveiled in the second half, which could act as positive momentum for next year's performance outlook and stock price."

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