[Click eStock] "Longtu Korea Expected to Achieve Record High Performance This Year"

by Ryu Hyunseok

Published 08 Feb.2021 08:31(KST)

[Asia Economy Reporter Yoo Hyun-seok] SangSangIn Securities analyzed on the 8th that Longtu Korea is expected to achieve its highest-ever performance this year. No investment opinion or target price was presented.

Lee Jong-won, a researcher at SangSangIn Securities, said, "Longtu Korea's performance has been driven by two killer IPs, Yeolhyeol Gangho for Kakao and Sword and Magic: Castle in the Sky," adding, "Since then, it has been growing by expanding its new game lineup based on royalty income from the Yeolhyeol Gangho IP."

He explained, "Compared to the early stages of the release of the hit IPs 'Yeolhyeol Gangho' and 'Sword and Magic' in 2017, 2018 and 2019 showed a downward trend in stock price due to the absence of hit IPs," and added, "However, signs of change are expected as various new games released last year have contributed to the top line, and the somewhat sluggish external growth is expected to recover."

In particular, this year is expected to have the potential for record performance with the release of various new games. He said, "In 2021, the release of six new games centered on major IPs is expected to achieve the highest annual performance," and evaluated, "This year could be a turning point where the company's structure changes and IP royalty sales can significantly increase."

He also emphasized the need to closely monitor the increase in royalty sales through securing multiple IPs. He said, "Longtu Korea provides IPs for which it holds copyrights to game developers and recognizes a portion of the game revenue using the IP as royalty sales," adding, "The core of the fundamentals over the past three years can be said to be 'Yeolhyeol Gangho for Kakao,' released in October 2017, which is the first martial arts mobile MMORPG." He continued, "Longtu Korea holds the game development rights for the 'Yeolhyeol Gangho' IP, and related royalty income forms the foundation supporting operating profit."