Pearl Abyss, Why Foreigners Have Net Bought for 17 Consecutive Trading Days?

Net Purchase of 87.4 Billion Won in a Month... Strong Q1 Performance Expected Due to Mobile Game Revenue Growth and More

[Asia Economy Reporter Song Hwajeong] While foreign investors have continued to sell in the domestic market for eight consecutive weeks, they have maintained net purchases of Pearl Abyss, drawing attention.

As of 10:08 a.m. on the 6th, Pearl Abyss was traded at 194,400 KRW, up 1.25% (2,400 KRW) compared to the previous trading day. This marks the third consecutive day of gains.

The rise in Pearl Abyss's stock price is interpreted as a result of the recent sustained foreign buying trend. According to the Korea Exchange, foreign investors have net purchased Pearl Abyss for 17 consecutive trading days. Since March, they have recorded net purchases every day except for one, and over the past month, they have bought 87.4 billion KRW worth, ranking fourth in terms of foreign net purchase volume. Due to the continued foreign buying, the foreign ownership ratio of Pearl Abyss surged from 13.81% at the end of February to 17.14% as of the previous day. The stock price has risen more than 9% in the past month.

Positive factors appear to include the recent acquisition of the Chinese game license (game business permit) for the online game "EVE Online" by its subsidiary CCP Games, as well as better-than-expected first-quarter earnings. The Chinese National Press and Publication Administration included EVE Online in the list of games granted licenses announced on the 12th of last month. Pearl Abyss acquired CCP Games, the Icelandic game developer of this game, in 2018.

First-quarter earnings are also expected to be better than anticipated. Daishin Securities estimated Pearl Abyss's first-quarter results at 136.7 billion KRW in sales and 42.5 billion KRW in operating profit, representing increases of 3% and 134%, respectively, compared to the same period last year. Lee Mina, a researcher at Daishin Securities, explained, "Pearl Abyss's first-quarter results are expected to slightly exceed consensus. PC online game sales are expected to be similar to or slightly higher than the previous quarter, and mobile game sales are expected to increase by 21% quarter-on-quarter, reflecting the launch performance of Black Desert Mobile in North America, Europe, and Southeast Asia." Daishin Securities raised Pearl Abyss's target stock price by 12% from the previous level.

However, full-scale growth is expected to become visible only next year. Yoon Euljeong, a researcher at Shin Young Securities, said, "Major new projects will be released next year, and this year will focus on maintaining performance." She added, "'Red Desert,' 'Plan 8,' and 'Dokkaebi' are scheduled for testing from the second half of this year and will be released next year, so they are expected to contribute significantly to performance from the second quarter of next year."