[Click eStock] "Pearl Abyss Faces Inevitable Deficit This Year Due to Lack of New Releases... Target Price Down"

Target Price Revised Down from 50,000 Won to 40,000 Won

NH Investment & Securities on the 21st downgraded the target price for Pearl Abyss from 50,000 KRW to 40,000 KRW, citing the lack of new release momentum and the inevitability of a deficit this year. The investment rating was maintained at 'Buy.'

Jaemin Ahn, a researcher at NH Investment & Securities, explained, "The potential success of 'Red Desert' has not significantly changed, but considering the long time until its release in 2025 and the recent negative investment sentiment toward gaming stocks, we lowered the target price." He added, "The target price was calculated by applying a price-to-earnings ratio (PER) of 20 times (previously 22 times) to the 2025 earnings per share (EPS)."

It is expected that a deficit is unavoidable this year. Researcher Ahn said, "With no new release momentum, operating profit is expected to be in the red this year," adding, "This year's performance is projected to show sales of 307 billion KRW, down 7.9% year-on-year, and an operating loss of 43.1 billion KRW, continuing the deficit." He further noted, "However, next year, thanks to the performance of Red Desert, operating profit is expected to turn positive at 121.3 billion KRW."

The deficit is expected to continue from the first quarter. NH Investment & Securities forecasted Pearl Abyss's first-quarter sales to decline 6% year-on-year to 80.6 billion KRW, with an operating loss of 4.3 billion KRW, maintaining the deficit. Researcher Ahn said, "The operating loss is similar to the previous estimate of 3.4 billion KRW and the market consensus of 6.1 billion KRW, but a deficit is inevitable." He added, "Although sales of 'Black Desert,' which was released 10 years ago, are expected to decline, some defense is possible through the 10th-anniversary event scheduled this year and the Part 2 update of 'A Morning Country,' which performed well last year."

Expectations are anticipated to gradually revive from the second half of the year. Researcher Ahn stated, "Expectations for Red Desert remain high, but since its release is scheduled for 2025, more time is needed for the momentum to fully materialize." He predicted, "Marketing activities for Red Desert are expected to intensify after August, leading to a rebound in expectations from the second half of the year."

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