[Click eStock] "Kakao Games, Focus on Uma Musume Sales Rebound"

NH Investment & Securities Report

[Asia Economy Reporter Minji Lee] NH Investment & Securities stated on the 27th that although Kakao Games experienced a stock price decline due to the listing issue of its development subsidiary, a stock price rebound is expected considering the revenue recovery of ‘Umamusume’.

Umamusume, released by Kakao Games on the 20th of last month, has shown outstanding performance. After the update on the 25th, it climbed back to 1st place in the Google App Store revenue rankings.

It is believed that the release of the ‘Kitasan Black’ support card, regarded as an essential item among Umamusume users, caused a sharp increase in item sales revenue. Considering that the Google App Store revenue ranking jumped from 8th on the 25th to 1st on the 26th, the estimated daily revenue is presumed to have exceeded 6 billion KRW.

Jaemin Ahn, a researcher at NH Investment & Securities, said, “We had expected Umamusume’s revenue for Q3 to be 76.1 billion KRW (daily average of 840 million KRW) and for Q4 to be 68.4 billion KRW (daily average of 750 million KRW), but if the current App Store ranking is maintained for a certain period, the estimates will be exceeded.”

Besides Umamusume, the company plans to release four new titles in the second half of the year. New titles (XL Games MMORPG, Distera, Eversoul, Ares: Rise of Ghanond) and Odin’s new Japanese release are scheduled, so the momentum from new releases is also expected to be reflected in the stock price.

Researcher Ahn said, “Although the stock price declined due to the stock market downturn and the listing of the development subsidiary, considering the revenue rebound of Umamusume, the expected solid performance in Q2 and the second half, and the new release schedule, the stock price decline was excessive. The 12-month forward price-to-earnings ratio (PER) has fallen to 16.6 times, indicating that the stock price has entered a phase where it is gradually seeking a rebound.”

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