[Click eStock] "DoubleU Games Secures Growth Engine Through M&A"

Hana Securities analyzed on the 8th that DoubleU Games secured growth momentum through mergers and acquisitions (M&A). The investment opinion 'Buy' and the target price of 64,000 KRW were maintained.

Hana Securities forecasted that DoubleU Games would record consolidated sales of 167.9 billion KRW and operating profit of 68.6 billion KRW in the fourth quarter of last year. This represents increases of 9.4% and 9.2%, respectively, compared to the same period last year. Junho Lee, a researcher at Hana Securities, said, "DoubleU Games is a representative company benefiting from a strong dollar," adding, "100% of its sales occur in North America and Europe, while most fixed costs are paid in Korean won."

The expected operating revenue for this year was presented as 721.7 billion KRW, with operating profit at 265.5 billion KRW, marking increases of 11.8% and 3.4% year-on-year, respectively. He explained, "With the growth of Supernation and the acquisition of Paksi Games, we expect to achieve double-digit sales growth for two consecutive years," adding, "Supernation's sales in 2024 are projected at 54.4 billion KRW, and since marketing expenses have been actively executed since November, high growth is possible."

Paksi Games, whose acquisition is scheduled to be completed next month, is also expected to contribute. He evaluated, "Paksi Games is a game company with three lineups, and its main title is 'Merge Studio: Fashion Makeover,' a match merge 2 genre," adding, "Since its release in March 2022, it has achieved cumulative sales of 27.8 million USD and cumulative downloads of 28 million, and as of November, it is experiencing high growth with monthly sales of 2 million USD."

He added, "Paksi Games' sales contribution is expected to be 40.6 billion KRW in 2025, and it is estimated to contribute to operating profit from 2026."

The researcher evaluated, "With this M&A, DoubleU Games has secured new growth engines in Supernation and Paksi Games alongside stable cash generation from its existing social casino," adding, "The cash used for this M&A is about 33 billion KRW, and there is still sufficient cash capacity for additional M&A and scale-up." He emphasized, "The existing investment points of expanding scale through additional M&A and shareholder returns remain valid, and the current valuation attractiveness is high, further enhanced by the strong dollar."

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