[Click eStock] "KakaoGames, New Release Momentum Fully Starts from Q2"

On the 18th, IBK Investment & Securities viewed that Kakao Games' momentum for launching major new titles will strengthen starting from the second quarter. The target stock price was lowered from the previous 25,000 KRW to 22,000 KRW, while maintaining a buy rating.

Kakao Games recently completed the divestment of non-core businesses to enhance management efficiency and is accelerating its strategy to focus on its core gaming business. In September last year, it completed the sale of Senatechnology and clearly expressed its intention to sell by classifying the entire Kakao VX business as a discontinued operation.

Seunghoon Lee, a researcher at IBK Investment & Securities, explained, "By streamlining core businesses, resources can be allocated efficiently, securing investment capacity necessary for launching major new titles. If the new titles succeed, the effect of fixed cost reduction will maximize leverage."

Kakao Games plans to release major new titles in the second half of the year, so the momentum for new titles is expected to fully materialize from the second quarter. In the fourth quarter, it plans to launch Project Q and Chrono Odyssey (NPIXEL, Console & PC, MMORPG). In the second quarter, a CBT (Closed Beta Test) for Chrono Odyssey is scheduled, and in the second half of the year, a CBT for ArcheAge Chronicles is planned.

The researcher said, "In the first quarter, the absence of new titles and a decline in sales of existing games limited the improvement in performance. Since many new games are in preparation, it is difficult to reduce labor costs, and with multiple games' CBTs and increased marketing expenses before new releases starting from the second quarter, the performance turnaround is expected in the third quarter."

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