[Click eStock] "Netmarble Proves Financial Structure Improvement Effect... Investment Opinion & Target Price Up"

Investment Opinion Upgraded from 'Short-term Buy' to 'Buy'
Target Price Raised from 64,000 KRW to 73,000 KRW

On the 3rd, IBK Investment & Securities upgraded its investment opinion on Netmarble from 'Trading Buy' to 'Buy' and raised the target price from 64,000 KRW to 73,000 KRW, citing the company's earnings surprise in the second quarter of this year as proof of improved financial structure.

Lee Seung-hoon, a researcher at IBK Investment & Securities, explained, "The target price for Netmarble was calculated by applying the upper limit of the price-to-book ratio (PBR) of 1.14 times over the past year, and the investment opinion was upgraded to Buy." He added, "Through 'Solo Leveling' (hereafter referred to as 'Nahonrep'), Netmarble demonstrated competitive advantage in game development and proved the effect of financial structure improvement through the second-quarter earnings surprise." He further noted, "Investor sentiment is expected to improve due to the momentum from the release of three new titles in the fourth quarter and exposure to new games in 2025."

This reflects an evaluation that structural changes have emerged through game development capabilities and changes in financial structure. The researcher analyzed, "The global success of Nahonrep proved the company's solid development capabilities," adding, "With a large-scale update in September and the airing of a new season on online video services (OTT) in the fourth quarter, there is a high possibility of additional revenue growth. Sales have increased not only in Korea but also in the United States and Japan, confirming global publishing competitiveness." In the fourth quarter, new games such as 'King Arthur,' 'RF Online,' and 'Demis Reborn' are expected to contribute to earnings improvement, and announcements regarding the new game lineup for next year and the release schedule of 'The Seven Deadly Sins: Origin' are anticipated.

It is analyzed that the cost-efficiency effects accumulated over several years were reflected in the second quarter, leading to the earnings surprise. Netmarble's second-quarter performance showed revenue of 782.1 billion KRW, a 29.6% increase year-on-year, and operating profit turned positive at 111.2 billion KRW, exceeding consensus estimates (average of securities firms' forecasts). The researcher stated, "This is the first time since 2017 that quarterly operating profit exceeded 100 billion KRW," adding, "The trend of optimizing personnel and marketing is being maintained, so the effects of new game releases in the fourth quarter and 2025 are expected to be significant. After the sale of Hive shares in the second quarter, interest expenses are also expected to decrease compared to the previous year due to debt repayment."

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