[Click eStock] "Netmarble, 1Q Earnings Below Expectations... Multiple Upcoming New Releases Are Positive"

by Hwang Yoonju

Published 21 Apr.2022 06:36(KST)

[Click eStock] "Netmarble, 1Q Earnings Below Expectations... Multiple Upcoming New Releases Are Positive"

[Asia Economy Reporter Hwang Yoon-joo] Korea Investment & Securities maintained a 'Buy' rating and a target price of 140,000 KRW for Netmarble on the 21st, stating that the company's operating profit for the first quarter is expected to fall 15% short of consensus.

Jung Ho-yoon, a researcher at Korea Investment & Securities, stated, "Netmarble's first-quarter revenue is forecasted to increase by 21.3% year-on-year to 692.2 billion KRW, while operating profit is expected to decrease by 35.7% to 34.9 billion KRW."

Researcher Jung explained, "Except for the A3 Global version P2E system update, there was no effect from new releases, and sales from existing games appear to have naturally declined."

Operating expenses are expected to continue a high growth trend, increasing by 27.3% year-on-year to 657.3 billion KRW. Labor costs are projected to be 184.5 billion KRW, similar to the fourth quarter, and marketing expenses are expected to slightly increase to 119.7 billion KRW due to SpinX's marketing expenditures compared to the previous quarter.

Researcher Jung positively evaluated the fact that despite a macro environment unfavorable to the gaming sector due to the reopening, more than 10 new titles are scheduled for release in 2022.

[Image source=Yonhap News]

Researcher Jung explained, "The game The Second Country: Crossworlds will incorporate blockchain technology and be released in global regions excluding previously launched areas. Additionally, Seven Knights Revolution and BTS Dream are also being prepared for release in the second quarter." In the second half of the year, six new titles including Champions Ascension, Modoo Marble: Meta World, and Monster Taming: Arena will be launched.

He added, "In particular, Modoo Marble: Meta World is a real map-based metaverse game where players purchase land plots and trade NFT-ized real estate. It is a real estate investment game that simultaneously introduces the concepts of the metaverse and blockchain into gaming, which allows for positive expectations regarding its success."