[Click e-Stock] "Pearl Abyss Target Price Raised Reflecting 'Crimson Desert' Results"

"Domestic IP’s Global Success, a Multiple Premium Factor"

On May 14, Hanwha Investment & Securities raised its target price for Pearl Abyss from 37,000 won to 72,000 won, reflecting updated performance estimates for the company’s new title, "Crimson Desert," and maintained its "Buy" investment rating.

Pearl Abyss's first-quarter results for this year significantly exceeded market expectations, with sales reaching 328.5 billion won and operating profit totaling 212.1 billion won. "Crimson Desert" was a commercial success, selling 2 million copies on its first day, 3 million in four days, and 5 million within 26 days of release. Revenue from "Crimson Desert" is estimated at approximately 260 billion won, with console and PC sales estimated to be evenly split at a 5:5 ratio.

For this year’s earnings guidance, Pearl Abyss projected sales between 879 billion and 975.4 billion won and operating profit between 487.6 billion and 572.6 billion won. So-Hye Kim, a researcher at Hanwha Investment & Securities, commented, "We believe the guidance is highly credible. Not only is the earnings level being raised substantially, but it is also significant that this marks a transition from being an original IP game company to adding a global mega IP." She added that, assuming current sales have reached 6 million copies, the expected sales volume is projected at around 8 million copies.

There are also heightened expectations for upcoming releases. Kim forecasted a 2- to 3-year cycle for the launches of "DokeV" and "PLAN 8," and anticipated that further information on "DokeV" would be released depending on the pace of development.

Kim emphasized that the success of "Crimson Desert" should be viewed as a factor for multiple premium. She explained, "From the second quarter, both sales and profits from 'Crimson Desert' will decline, and even with the assumption of DLC (downloadable content) releases next year, a decrease in profit is naturally expected. However, it has been years since a domestic company’s new IP proved its performance in the global market, and this should be recognized as a multiple premium factor."

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