[Click eStock] "DoubleUGames Enters Profitability Improvement Phase... Target Price Raised"

Samsung Securities has raised its target price for DoubleUGames from 78,000 won to 83,000 won, citing that the company has entered a phase of overall profitability improvement.

According to Samsung Securities on May 21, the reasons for the upward adjustment include: ▲profitability improvement based on a rebound in operating profit growth rate; ▲the full-scale performance of artificial intelligence (AI) casual games; ▲a decrease in payment processing fees and workforce optimization; and ▲strengthened expectations for shareholder returns due to DDI's delisting.

Donghwan Oh, a researcher at Samsung Securities, stated, "From 2026, the operating profit growth rate is recovering thanks to improved profitability," adding, "the company is entering a phase of overall profitability improvement, driven by the success of Paxie Games' AI-developed titles, an increase in the share of direct-to-consumer (DTC) payments in the social casino segment, and workforce optimization through restructuring." Previously, first-quarter revenue and operating profit each increased by 26.6% and 25.1%, respectively.

Researcher Oh explained, "The area with the most notable profitability improvement is the casual games subsidiary, Paxie Games. The first-quarter operating margin has risen to a high single-digit level, and the company plans to launch around 50 new titles annually to push the margin into double digits."

He added, "Although social casino revenue has plateaued, the DTC share rose to 39% in the first quarter, improving the profit structure. Labor costs are also being contained, with about 50 staff members reduced in a restructuring carried out in January."

Accordingly, Samsung Securities has raised its 2026 operating profit estimate for DoubleUGames by 6.9% compared to its previous forecast, reflecting the profitability improvement trend at subsidiaries. The target price has also been raised by 6.4% to 83,000 won. Researcher Oh maintained a 'Buy' investment opinion, stating, "Given the rapid growth of AI casual games, overall profitability improvement, and the potential for enhanced shareholder returns following DDI’s delisting, the current price level of 6.9 times P/E is considered excessively undervalued."

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