Target Price Surpasses 1 Million Won... Already Joins the Ranks of 'Hwangjejeu'
Lineage M and Lineage 2M Remain Strong... Expectations Rise with Multiple New Releases in the Second Half
Mirae Asset Daewoo: "Undervaluation Compared to Global Game Companies Will Be Resolved"
[Asia Economy Reporter Minwoo Lee] NCSoft's target stock price has surpassed 1 million KRW for the first time. As new game releases are concentrated in the second half of the year, expectations are being reflected in the stock price in advance, and it is expected that the undervaluation compared to global game companies will be resolved through overseas expansion.
On the 2nd, Mirae Asset Daewoo set a target price of 1.15 million KRW for NCSoft. This is 15% higher than the 1 million KRW target price suggested by Samsung Securities in mid-last month. This is the first time NCSoft's target price has exceeded 1 million KRW. According to financial information provider FnGuide, the average target price of 23 securities firms also exceeded 900,000 KRW. Despite a 61.9% increase compared to the yearly low of 504,000 KRW recorded on March 19 (based on the previous day's closing price of 816,000 KRW), it is still evaluated to have abundant growth potential.
NCSoft has already entered the ranks of "Hwangjejeu" (Emperor Stocks). Among all KOSPI and KOSDAQ stocks, the only company with a higher stock price than NCSoft is LG Household & Health Care (previous day's closing price 1.363 million KRW). Even when calculated by the converted stock price adjusted to a par value of 5,000 KRW per share, NCSoft ranks second overall after Naver (NAVER). Its market capitalization, based on the previous day's closing price, is 17.9145 trillion KRW, ranking 15th among KOSPI-listed companies. It has already surpassed financial companies such as Shinhan Financial Group and KB Financial Group.
There are forecasts that NCSoft will grow further in the second half of this year. The average daily revenue in the first quarter of Lineage M, released in 2017, remains steady at 2.36 billion KRW, and Lineage 2M, released last year, is also performing well with daily revenue of 3.8 billion KRW. Considering that expenses such as labor costs and marketing, including incentive payments, are expected to decrease by about 90 billion KRW in the second quarter, it is expected to achieve results exceeding expectations.
The concentration of new releases in the second half is also a positive factor. The trial test and commercialization of the new title TL, which has been in development for over 10 years with an investment exceeding 100 billion KRW, are scheduled. Mobile MMORPGs Blade & Soul 2 and Aion 2 are also planned to be released sequentially. The existing title Lineage 2M is expected to expand into North America and Europe. The release of new titles, which occurs once every few years, has been the most important investment point, and considering the past when expectations before release were reflected in the stock price in advance, there is analysis that there is sufficient upward momentum going forward.
Researcher Changkwon Kim of Mirae Asset Daewoo said, "Last year, global IT giants such as Amazon, Google, and Microsoft also entered the gaming industry, identifying the game industry as a growth engine for the digital content market following music and video, and are fiercely competing to secure market dominance," adding, "Considering that NCSoft's foreign ownership ratio reaches 51.7% and that it is included in the game sector investment ETFs listed in the U.S., foreign investors also expect NCSoft to benefit from the growth of the global game industry."
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