Netmarble Hits 52-Week Intraday High... Growing Expectations for Q2 Earnings

[Asia Economy Reporter Eunmo Koo] Expectations are rising for Netmarble's second-quarter earnings. With a lineup of new releases scheduled for the second half of the year, the stock's strong performance is expected to continue for the time being.

According to the Korea Exchange on the 13th, Netmarble's stock closed at 127,500 KRW on the 10th, up 1.59% (2,000 KRW) from the previous trading day. Since the beginning of this month through the 10th, Netmarble's stock has shown strength, rising for seven consecutive trading days and increasing by 31.3%, significantly outperforming the KOSPI's 2.0% gain during the same period. The recent rise was driven by foreign investors who net purchased 37.6 billion KRW worth of Netmarble shares, ranking fifth in net foreign purchases in the KOSPI market during this period. On the same day, the stock price rose to 135,000 KRW early in the session, setting a new 52-week high, and as of 9:35 AM, it continued its upward trend, trading at 134,000 KRW, up 5.10% (6,500 KRW) from the previous day.

The stock price is believed to be buoyed by expectations of improved second-quarter earnings. The results fully reflect the performance of new titles released in the first quarter, and the addition of revenues from 'Stone Age World' and 'Blade & Soul Revolution,' which launched in the second quarter, is expected to enhance profitability. Additionally, the stabilization of expenses such as labor and marketing costs is also seen as a factor contributing to earnings improvement. According to financial information provider FnGuide, Netmarble's second-quarter revenue is estimated at 596.7 billion KRW, a 13.4% increase compared to the same period last year, and operating profit is projected to grow 98.5% to 65.9 billion KRW.

Netmarble is expected to maintain its stock price momentum through a series of new releases planned for the second half of the year. The first release of the second half kicked off on the 8th with 'Magumagu 2020,' and other titles such as 'BTS Universe Story,' 'A3: Still Alive,' 'Seven Knights 2,' and 'Seven Knights Time Wonderer' are also in preparation for launch.

Donghee Kim, a researcher at Meritz Securities, commented, "Since the acquisition of Coway last year, there has been a need to reestablish the company's identity as a game developer, and it is expected that the value as a global game company will be restored through multiple new releases this year." However, Euljung Yoon, a researcher at Shin Young Securities, pointed out, "Since new releases are concentrated in the fourth quarter, it is important to efficiently manage marketing expenses for new titles to secure profitability."