[Click eStock] "KakaoGames, Earnings and Dual Listing Issues... Target Price Down"

[Asia Economy Reporter Hwang Yoon-joo] Hyundai Motor Securities on the 10th predicted that Kakao Games' fourth-quarter earnings would fall short of market expectations amid the absence of new releases. The investment rating 'Buy' was maintained, but the target price was lowered to 58,000 KRW.

Hyundai Motor Securities analyst Kim Hyun-yong stated, "We estimate fourth-quarter sales to be 271.9 billion KRW, down 5.2% year-on-year, and operating profit to be 34.1 billion KRW, down 28.8%."

Analyst Kim explained, "The decrease in sales is due to the downward stabilization of sales from existing games amid the absence of new releases and seasonal sales decline in other businesses. In the mobile game sector, Odin maintained sales levels in both Korea and Taiwan compared to the previous quarter, but Uma Musume's sales are expected to rapidly stabilize downward, decreasing by 14.5% year-on-year."

Analyst Kim evaluated that Kakao Games' performance, which had been growing until the first half of last year, began to slow down from the third quarter. He explained that it is realistically difficult for Odin to secure significant sales volume outside of Korea and Taiwan.

He said, "The success of 'Ares: Rise of Guardians,' which is mentioned as the next major title after Odin, is key to resuming high growth," and added, "We expect a domestic release in the second quarter followed by a sequential global release in the second half." Dependence on Odin's sales is expected to significantly decrease starting in the second half of this year.

Analyst Kim stated, "Securing a second IP is the only condition for resuming growth," and pointed out, "Considering the Lionheart Studio issue, which could go public in the first half of this year, it will be difficult to avoid discount issues due to dual listings."

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