[Click eStock] "Neowiz, Earnings Expected to Rebound After Q2"

Daishin Securities Report

[Asia Economy Reporter Minji Lee] Daishin Securities maintained a buy rating and a target price of 35,000 KRW for Neowiz on the 14th, expecting performance improvement starting from the low point in the off-season second quarter.

Second-quarter sales are expected to grow 25% year-on-year to 73.3 billion KRW, and operating profit is forecasted to increase 24% to 8 billion KRW during the same period. Operating profit is predicted to exceed market expectations.

Web board game sales are expected to decline 10% quarter-on-quarter to 28.6 billion KRW. Along with the off-season effect in the second quarter, the previously anticipated regulatory easing bill for web board games, expected to be implemented from June, was enacted on the 4th, leading to a downward revision of about 5% in the second-quarter sales estimate for existing web board games.

In the second half of the year, regulatory easing and the peak season effect in the fourth quarter are expected. Web board game sales for this year are estimated to increase by 6% compared to the previous year.

Marketing expenses are estimated to increase 4% quarter-on-quarter to 8.4 billion KRW. Labor costs are expected to remain similar to the previous quarter at 30.5 billion KRW. Lee Ji-eun, a researcher at Daishin Securities, said, “Unlike the first half of the year, which lacked new releases, marketing expenses are expected to increase in the second half due to web board games and the new title ‘P-ui Geojit’ (The Lie of P). However, since ‘P-ui Geojit’ is conducting joint marketing with the console company and web board games are not pursuing aggressive marketing, the profit damage will not be significant.”

The new title ‘P-ui Geojit’ is expected to be released simultaneously on consoles and Steam in the first quarter of next year. ‘P-ui Geojit’ plans to reveal in-game footage and release schedules at Gamescom in August and the Tokyo Game Show in September. Reference games include Elden Ring in terms of genre, and Sekiro and Bloodborne in terms of in-game elements.

Lee Ji-eun said, “Bloodborne, which is most frequently compared through previously released videos, sold about 2 million copies in the first six months after its release in 2015,” and added, “‘P-ui Geojit’ is estimated to sell about 770,000 copies in the first six months after its release.”

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