[Click eStock] "Pearl Abyss, Uncertainty Grows Due to 'Red Desert' Release Delay... Target Price Down"

On the 17th, KB Securities downgraded the target price for Pearl Abyss from 42,000 KRW to 38,000 KRW, citing increased volatility due to delays in the release of new titles. The investment rating was maintained at 'Buy.'

Lee Seonhwa, a researcher at KB Securities, stated, "We have lowered Pearl Abyss's target price by 9.5% compared to the previous estimate. Pearl Abyss revealed a new trailer for 'Red Desert' at North America's largest game awards, The Game Awards (TGA), announcing a release date at the end of 2025. As a result, the contribution of Red Desert to earnings is expected to become visible in 2026 rather than 2025. The quarterly deficit trend is expected to continue until the release of Red Desert in Q4 next year." She added, "The delay in Red Desert's release also increases uncertainty regarding the release schedule of the next title, 'Dokkaebi,' which is a risk factor."

Pearl Abyss's Q4 performance last year is expected to meet market expectations. The researcher said, "On a consolidated basis, Q4 sales are expected to decrease by 2.3% year-on-year to 82.5 billion KRW, with an operating loss of 8.6 billion KRW, aligning with the consensus (average securities firm forecast). Marketing expenses increased due to participation in global game shows such as G-Star in November and TGA in December last year ahead of the Red Desert release, which is expected to continue the deficit trend."

This year, marketing efforts to promote Red Desert are expected to intensify, leading to a continued deficit trend through Q3. The researcher noted, "The regions for global game show participation will expand, and there will be opportunities to experience open-world content in addition to the existing boss battle-focused experiences. Therefore, the quarterly deficit is expected to widen through Q3 this year, which may increase stock price volatility."

There is an opinion that the performance of Red Desert is necessary for a structural rise in the stock price. The researcher said, "Short-term stock price increases are possible through events such as new trailer releases and game show participation, but structural stock price growth will only be possible if earnings improvement is supported by the release of Red Desert and results that meet expectations."

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