[Click eStock] "NCSoft, New Releases Continue to Underperform... Investment Opinion Maintains Market Return"

Daishin Securities maintained its market perform rating and a target price of 200,000 KRW for NCSoft on the 6th, stating that "the two new mobile titles directly published in the second half of last year showed poor performance." The closing price on the 3rd was 189,000 KRW.

On the same day, Lee Ji-eun, a researcher at Daishin Securities, said, "We applied a price-to-earnings ratio (PER) of 19.5 times to NCSoft's earnings per share (EPS) of 10,420 KRW for this year. We applied a 10% discount compared to the average multiple of global leading companies, considering the momentum gap until the release of this year's anticipated titles," she explained.

She forecasted that last year's fourth-quarter revenue would be 434.5 billion KRW, with an operating loss of 103.1 billion KRW (turning to a deficit compared to the same period in 2023). The researcher said, "Revenue is expected to meet the market average forecast, but operating profit will fall short of it. In the fourth quarter of last year, two new titles, Throne and Liberty (TL) and Journey of Monark, were released, but TL's sales ranking continued to decline, and Journey of Monark also recorded poor performance," she predicted.

Additionally, "The revenue from existing lineups Lineage M and Lineage 2M is expected to drop by 18% and 12%, respectively, compared to the third quarter of last year," she said. "Lineage W is expected to rebound compared to the previous quarter due to its 3rd anniversary update, but its revenue share is small, so its contribution to earnings will be minimal," she added.

Costs are expected to include labor expenses of 319.4 billion KRW and marketing expenses of 49.1 billion KRW. While one-time retirement payments due to large-scale workforce reductions will increase labor costs, labor expenses this year are expected to decrease by 18% compared to last year.

The researcher forecasted, "The timeline for major new releases is expected to be Tactan (RTS) at the end of Q2, new genres of existing intellectual property (IP), Aion 2, and LLL in Q4. Until the release of Tactan, both earnings and new release momentum will be insufficient," she concluded.

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