[Click eStock] "Pearl Abyss, Continued Losses Expected Due to New Release Delay... Investment Rating and Target Price Downgraded"

Investment Rating Downgraded from 'Buy' to 'Neutral'
Target Price Reduced by 34.5% to 38,000 Won

On the 30th, KB Securities downgraded Pearl Abyss from 'Buy' to 'Neutral' and lowered the target price from 58,000 KRW to 38,000 KRW, forecasting continued losses this year due to delays in new game releases.

Lee Seonhwa, a researcher at KB Securities, explained, "The main reason for the target price downgrade is the downward revision of the operating profit estimate to a loss this year, as the estimated release timing of 'Red Desert' has been delayed from the fourth quarter of this year to the first quarter of next year due to the delay in completing its development." She added, "The investment opinion is downgraded considering the gap between the current stock price and the target price." She further noted, "Due to the delay of Red Desert, the release dates of 'DokeV' and 'Plan 8' have also been postponed, leading to a 36.0% downward revision of next year's operating profit estimates."

Pearl Abyss is estimated to have turned to a loss in the fourth quarter of last year. The researcher stated, "Pearl Abyss's consolidated sales in the fourth quarter of last year are expected to have decreased by 18.5% year-on-year to 83.9 billion KRW, with an operating loss of 3.3 billion KRW, turning to a loss." She analyzed, "Sales from Black Desert on mobile and console platforms have been continuously declining, and PC sales data has been unavailable since November due to the game dropping out of PC bang (internet cafe) rankings, suggesting that the 'Ronanmin' (users who left Lost Ark) effect has ended."

With the release date of the next new title, Red Desert, postponed from the end of this year to the first half of next year, losses are expected to continue this year. The researcher said, "Full-scale marketing activities for Red Desert are expected to begin in the second half of this year, with participation in various events such as Gamescom in August, G-Star in November, and The Game Awards (TGA) in December. Considering the decline in Black Desert's sales this year along with increased costs, it is reasonable to estimate that operating losses will continue."

The momentum for new game releases is expected to be absent for the time being. The researcher predicted, "With the delay in the release of Red Desert, the launch of the next pipeline titles, including DokeV and Plan 8, is inevitably postponed. This year will be a period without new releases, marked by declining sales of Black Desert and increased marketing costs for Red Desert, resulting in a lack of new release momentum for the time being."

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