[Click eStock] Neowiz, New Game Expectations Rise... Target Price Up 10%

[Asia Economy Reporter Ji Yeon-jin] Daishin Securities announced on the 12th that it raised its 12-month earnings per share (EPS) forecast for Neowiz, reflecting increased expectations for new releases, and raised the target stock price by 10% to 39,000 KRW.

Neowiz's sales in the second quarter of this year increased by 19% year-on-year to 70.3 billion KRW, and operating profit rose 13% to 5.9 billion KRW. However, this was 14% below market expectations. Game sales recorded 63.3 billion KRW, a 10% decrease from the previous quarter, which is attributed to the off-season for web board games and the lack of updates for Goyang-i wa Soup (Cat and Soup).

However, in the second half of the year, performance is expected to improve due to the peak season effect following the easing of regulations on web board games. Goyang-i wa Soup has shown a sales rebound after the July update.

Marketing costs slightly increased in the second quarter due to pre-marketing for the new release launched last month, and although labor and marketing costs are expected to rise in the second half, marketing for web board games is not aimed at aggressive market share expansion, and efficient marketing plans are in place for new releases, so profit erosion from increased marketing expenses in the second half is expected to be limited.

Lee Ji-eun, a researcher at Daishin Securities, said, "P-ui Geojit (Console/Steam, Seoul Like) is expected to reveal in-game footage and release schedules at Gamescom in August and Tokyo Game Show in September,” adding, “Gamescom will hold Opening Night Live on August 23, followed by the main event from August 24 to 28, and the response to previously released in-game footage has been positive.”

She continued, “When the new release is unveiled at Gamescom, expectations for the new title are expected to be reaffirmed, and reflecting the heightened anticipation, the estimated sales for the first six months after release have been raised to approximately 1 million units (previously 770,000 units).”

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