[Click eStock] "Kakao Games, Rapid Stamina Depletion in Odin and Umamusume"

Daishin Securities Report

[Asia Economy Reporter Minji Lee] Daishin Securities maintained its buy rating on Kakao Games on the 15th and set a target price of 70,000 KRW, down 12.5%. This is due to a partial adjustment in the release schedule of new titles in the second half of the year.

Second-quarter sales are expected to reach 349 billion KRW, and operating profit 73.5 billion KRW, representing growth of 179% and 808% respectively compared to the same period last year. Both sales and operating profit are expected to fall short of market expectations, but the significant year-on-year growth in sales and operating profit reflects the impact of Odin’s release in Korea and Taiwan.

Domestic sales of Odin continue to show a natural decline trend, which is expected to persist in the second half of the year. Although Taiwan initially succeeded in early popularity after release, its sales ranking appears to have rapidly declined. As of July, it maintains a low sales ranking, so Taiwan is also expected to continue its downward trend in the second half. Kim Hoejae, a researcher at Daishin Securities, explained, “The average daily sales this year are estimated to be 1.5 billion KRW in Korea and 600 million KRW in Taiwan, consistent with previous estimates,” adding, “It is expected to be released in Japan in the fourth quarter of this year.”

Uma Musume ranked 2nd on Google Play and 1st on the App Store after its release. Despite the low awareness of the subculture genre domestically, it seems to have succeeded in early popularity. However, the contribution to performance in the second quarter is expected to be limited due to insufficient reflected days. Considering the current lowered sales ranking and the reduced size of the domestic mobile game market, meaningful performance contribution in the second half is also judged to be minimal. Uma Musume’s average daily sales this year are estimated to be about 600 million KRW, with a predicted sales proportion of 8% for this year.

Although many new titles are scheduled to be released in the second half, information disclosed so far is limited. Researcher Lee Ji-eun said, “Some new titles may be delayed to 2023,” adding, “The blockchain game Achi World is scheduled to be released in July.”

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