[Click eStock] "NCSoft, Ample Additional Upside Momentum... Q2 Earnings Below Consensus"

[Asia Economy Reporter Oh Ju-yeon] NH Investment & Securities expects NCSoft's second-quarter earnings this year to be somewhat disappointing compared to market consensus, but considering new game momentum, global expansion, and platform extension, there is still abundant potential for further stock price increases despite the recent sharp rise. Accordingly, the investment rating is maintained at 'Buy' and the target price has been raised from the previous 1,000,000 KRW to 1,270,000 KRW.

According to NH Investment & Securities on the 6th, NCSoft's second-quarter revenue this year is estimated at 617.3 billion KRW, and operating profit at 214.1 billion KRW, which is below the previous estimate of 249.8 billion KRW and the market consensus of 254.1 billion KRW.

Researcher Ahn Jae-min stated, "Lineage M's 3rd anniversary update and Lineage 2M's Chronicle 3 update are scheduled after July, so June sales were relatively weak, but recovery is expected after the July updates."

Although the second-quarter earnings may fall short of expectations, Researcher Ahn explained that there is abundant momentum for future stock price increases.

NCSoft plans to release 'Blade & Soul 2' and 'Lineage 2M (Taiwan, Japan)' in the second half of this year, and in 2021, 'Aion 2' and 'Project TL' are also scheduled. It is analyzed that the company has entered a period where new game momentum is maximized.

Researcher Ahn diagnosed, "NCSoft has entered a high-growth earnings cycle, and positive momentum such as platform expansion from PC to mobile to console and regional expansion from Korea to global markets remains valid, so a favorable stock price increase is expected to continue."

He added, "Concerns that have acted as drawbacks for NCSoft, such as the long gap between new releases, high domestic sales ratio, and slow platform expansion, are expected to gradually be resolved from the second half of this year," emphasizing, "There is no longer any reason for it to be undervalued compared to global competitors."