[Click eStock] "NCSoft, Stock Price Drop Is a Buying Opportunity"

Meritz Securities Report

[Asia Economy Reporter Minji Lee] Meritz Securities expressed on the 14th that it is reasonable to view the stock price decline of NCSoft as a buying opportunity.

NCSoft's stock price fell by more than 8% the previous day. The factors behind the stock price decline include the overlapping release schedule with "Diablo 4," the possibility of share disposal, and concerns over weak fourth-quarter earnings. Meritz Securities estimated that among these, the possibility of share disposal had the greatest impact on the stock price decline.

Researcher Hyojin Lee of Meritz Securities said, "Last weekend, the release date of Diablo's new title, Diablo 4, was confirmed for June 6 next year, which may have increased concerns about 'Project TL,' but investor expectations for TL were not high enough to rival Diablo 4. If this were the true reason, an immediate reaction would have occurred on Monday." The fourth-quarter earnings are also expected to record 96.9 billion KRW, showing no significant deviation from the market consensus of 92.3 billion KRW.

However, the possibility of share disposal is high. Netmarble holds an 8.9% stake in the company and has announced a deleveraging plan. It is more likely to continue deleveraging by utilizing NCSoft shares rather than Coway assets. Researcher Lee explained, "Over the past three months, the company's stock price has risen by more than 13%, outperforming the global gaming average (-8%), so it is considered a period when profit-taking selling may occur."

Although more selling pressure may come from the stock price decline, Meritz Securities analyzed that attention should be paid to the fact that NCSoft is preparing to enter new markets. Sony is developing its own IP, Horizon, as a live service game, and Microsoft has allocated 20 trillion KRW in strategic investments in gaming and entertainment to compete. Researcher Lee stated, "From the perspective that growth after 2023 has become most concrete, the stock price decline due to events is the best buying opportunity."

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