[Click eStock] "Netmarble's Q2 Earnings Exceed Market Expectations... Target Price Raised"

[Asia Economy Reporter Oh Ju-yeon] Hana Financial Investment evaluated that Netmarble's operating profit in the second quarter of this year significantly exceeded expectations, and maintained a 'Buy' investment rating while raising the target price to 180,000 KRW, reflecting solid performance and the listing value of its subsidiaries.

According to the Financial Supervisory Service's electronic disclosure system on the 13th, Netmarble's sales in the second quarter reached 685.7 billion KRW, up 28.7% from the previous quarter and 30.3% from the same period last year, while operating profit was 81.7 billion KRW, a 146.1% increase year-on-year.

The sales of Marvel games, which had been the sales support base, recovered, and the overseas expansion effects of titles such as "The Seven Deadly Sins" and "Blade & Soul Revolution" also exceeded expectations. Additionally, the warm reflection effect of "A3: Still Alive" contributed to the sales increase.

Researcher Hwang Seung-taek analyzed, "Overall, the sales of existing games were supported, instilling market expectations that they can continue to serve as a stable profit base in the future, and raising expectations for overseas expansion performance, making this a qualitatively positive performance."

However, he explained that since the sales of existing games fully recovered in the second quarter, it is difficult to expect an increase in sales of existing games in the third quarter. As the initial premium of overseas expansion games and new games is also expected to shrink somewhat in the third quarter, it is pointed out that it is difficult to expect a meaningful overall sales increase without support from new games.

Researcher Hwang said, "The new game lineup, including 'Magumagu 2020' released in the third quarter, seems less weighty to drive performance," and added, "Therefore, expectations for performance improvement in the fourth quarter, when 'Marvel Realm of Champions' and 'Seven Knights 2' are released, are high." He continued, "We also have positive expectations for the global market entry of 'A3: Still Alive,' and since expectations for the fourth quarter are likely to be reflected in the stock price, a stable stock price trend is expected to be maintained."

Furthermore, he forecasted that the solid performance of subsidiaries and the listing of Big Hit Entertainment will positively contribute to investor sentiment.