[Click eStock] "Wemade, Deficit Expected Again This Year... Investment Rating Downgraded to 'Neutral'"

[Asia Economy Reporter Son Sun-hee] Shinhan Investment Corp. downgraded its investment opinion on game company Wemade from 'Buy' to 'Neutral' on the 16th. This is because it is expected to be insufficient to make up for the deficit performance despite the release of new games this year.

Wemade recorded sales of 110.3 billion KRW in the fourth quarter of last year, down 12.9% from the same period last year. Operating profit turned to a loss of 24.4 billion KRW. Sales related to Wemade's released game 'Mir4' continue to decline, and 'MirM' also failed to achieve expected results domestically. However, thanks to the licensing contract with Longhua Group, sales slightly increased compared to the previous quarter.

This year, various new games in genres such as 'Night Crow' and 'Legend of Mir' are scheduled to be released. However, whether performance improvement can be achieved remains to be seen.

Kang Seok-oh, a researcher at Shinhan Investment Corp., analyzed, "The global marketing effect on the WEMIX platform is still positive, so it is expected that initial marketing costs will not be spent on a large scale," but added, "As the number of blockchain games increases worldwide, competition must be based on gameplay, and it is necessary to verify through additional information and post-release performance whether the MMORPG lineup and casual new titles to be released this year have differentiation from already released works."

He also added, "The speed at which new games are onboarded to the WEMIX platform is slower than the company's target, and even if the new titles scheduled for release this year contribute, an annual deficit is expected," and "Since the deficit has increased, investment responses according to the turnaround timing are necessary."

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