[Click eStock] "NCSoft Wins Pro Baseball Championship in 9 Years, Expected to Bear Fruit in Core Business Next Year"

[Asia Economy Reporter Oh Ju-yeon] NC Dinos, the professional baseball team of NCSoft, won the championship for the first time in 9 years since its founding (7 years since entering the first division in 2013), leading to a simultaneous rise in the company's image and brand awareness. In particular, the philosophy of President Kim Taek-jin, who made mid- to long-term investments in the baseball team and ultimately achieved first place, is highlighted as he also pursues mid- to long-term investments in the core gaming business, with analysis suggesting that these efforts will bear fruit next year.

On the 26th, NH Investment & Securities explained that NC Dinos' Korean Series victory led to an increase in NCSoft's brand awareness. The championship celebration with the ceremonial sword not only positively impacted corporate value but also emphasized the company's investment philosophy.

Researcher Ahn Jae-min of NH Investment & Securities stated, "President Kim Taek-jin made mid- to long-term investments in the baseball team and achieved first place, and despite various external factors such as management disputes with Nexon and the shift to the mobile gaming market over recent years, NCSoft has grown into the number one gaming company in Korea." He particularly evaluated that the operation of the sports team contributed to the company's recognition and brand value.

Since its founding in 2011, NC Dinos has steadily increased its revenue. Revenue grew from 33 billion KRW in 2013 to 44.6 billion KRW in 2019, with the proportion of non-advertising income (ticket sales, merchandise sales, concession sales, etc.) excluding advertising revenue rising to 39.9% in 2019. Due to the nature of Korean professional baseball teams, it is not easy to generate significant operating profits or expect continuity of profits, but the expansion of spectators and merchandise sales is linked to the rise in NC Dinos' recognition, which positively affects NCSoft's brand awareness and builds a positive image of the gaming industry.

This philosophy is also reflected in the core business, and it is expected that the fruits of mid- to long-term investments will fully appear next year.

Researcher Ahn said, "Compared to competitors, NCSoft has a longer game development period and a relatively long interval between new releases, but I positively evaluate NCSoft's mid- to long-term investment philosophy that allows for this patience." He added, "Because of this strategy, the company has shown steady growth in sales and operating profit over the past 20 years, and the average tenure of employees at NCSoft is 5.5 years, which is longer than the industry average of 3.9 years."

He continued, "Investments in mobile games, new IP (intellectual property) development, global game development, and platform expansion over the past few years are expected to bear significant fruit starting in 2021."

NCSoft is preparing to release multiple new titles next year. In the first quarter, Blade & Soul 2 and Lineage 2M will launch in Taiwan, and in the second half, Aion 2, Project TL, and Lineage 2M will be released in Japan and globally. Additionally, numerous events are planned, including the Knight update for Lineage M, the first anniversary update for Lineage 2M, the 22nd anniversary update for Lineage 1, the 17th anniversary update for Lineage 2, the 12th anniversary update for Aion, and the opening of classic servers.

Researcher Ahn predicted, "Depending on the performance of new titles and the impact of fourth-quarter updates, NCSoft's 2021 results will show significant growth," forecasting sales of 3.27 trillion KRW, a 35.6% increase from the previous year, and operating profit of 1.35 trillion KRW, a 58.7% increase. Accordingly, he maintained a 'Buy' investment rating and a target stock price of 1.22 million KRW.