[Click eStock] "NCSoft to Improve in the Second Half"

Published 12 Apr.2022 07:31(KST)

NH Investment & Securities Report

[Click eStock] "NCSoft to Improve in the Second Half"

[Asia Economy Reporter Minji Lee] NH Investment & Securities stated on the 12th that the stock price of NCSoft is expected to rise from the second half of the year as anticipation for new releases is reflected. The investment opinion is Buy, and the target price is maintained at 600,000 KRW.

NCSoft's first-quarter sales are estimated to increase by 42% year-on-year to 727 billion KRW. Operating profit is expected to exceed estimates (135.6 billion KRW), recording 174.5 billion KRW, a 207% increase.

Although the daily average revenue of 'Lineage W' has declined compared to the initial launch, it maintains the number one sales ranking in major countries, suggesting that overall revenue has entered a stabilization phase. Sales are estimated at 304.6 billion KRW, with a daily average revenue of 3.4 billion KRW.

‘Lineage M’ and ‘Lineage 2M’, which saw a significant sales decline last quarter due to the release of Lineage W, are expected to record sales of 93.2 billion KRW and 117.1 billion KRW, respectively. ‘Guild Wars 2’, which released an expansion on February 28, is predicted to have sales of 33.5 billion KRW, showing a 50% growth compared to the previous quarter.

Personnel and marketing expenses, which had significantly increased due to the release of Lineage W, are expected to decrease substantially in the first quarter as related effects disappear. Personnel expenses are expected to decrease by 6% quarter-on-quarter to 204.8 billion KRW, and marketing expenses are expected to decrease by 35% to 76.1 billion KRW.

The new releases scheduled for this year are ‘Lineage W Global’ (Q3) and ‘TL (Throne and Liberty, Q4)’, and after 2023, five titles (Project E, R, M, Blade & Soul S, Aion 2) will be launched. Researcher Jaemin Ahn said, “We expect momentum recovery from new releases in the second half of the year, but related videos or the timing of new releases need to be closer to be reflected in the stock price.”