[Click e-Stock] "No New Titles"... The Stock with Target Price Lowered from 48,000 Won to 42,000 Won

Kyobo Securities has lowered its target price for Shift Up from 48,000 won to 42,000 won, while maintaining its buy investment rating.

On May 13, Dongwoo Kim, a researcher at Kyobo Securities, stated, "We have adjusted our net profit estimate from 134.1 billion won to 122.9 billion won, reflecting increased costs due to higher incentives and the acquisition of Unbound. This adjustment is based on applying this year's average price-to-earnings ratio (PER) of 20.3 times for global gaming companies."

Shift Up's sales for the first quarter of this year were 47.3 billion won, and operating profit was 21.5 billion won, both falling short of expectations (estimated sales of 46.8 billion won and operating profit of 25.5 billion won). Kim noted, "For 'Nikke', which accounted for 32.7 billion won of total sales, global sales outside China declined." He added, "Sales of 'Goddess of Victory: Nikke', which was launched in China in the second quarter last year, have stabilized downward." He also mentioned, "'Stellar Blade' maintained solid sales momentum in February thanks to promotional activities."

'Stellar Blade', which drove profit growth in 2024 and last year, is expected to see operating profit decline this year as the effect of regional expansion fades. However, through the 3.5-year anniversary event for 'Nikke' in the second quarter of this year, the game achieved the No. 1 sales ranking in both iOS and Android markets in Japan and Korea, No. 4 on iOS in Taiwan, and No. 17 in the United States. This is expected to support earnings until the launch of new titles such as 'Spirits' resumes.

Kim explained, "With limited factors for raising earnings estimates for this year and next, share prices could rise if information about new releases such as 'Spirits' is announced, or if the next project pipeline is revealed after the Unbound acquisition." However, he cautioned, "Considering that new titles are scheduled for release only after next year, risk factors still remain."

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