New Release Wings 'NCSoft' Approaches 1 Million Won

Four New Titles Released in Q1
Expectations for Overseas Expansion and Performance Improvement

[Asia Economy Reporter Eunmo Koo] NCSoft is attracting increasing attention from investors as it aggressively targets overseas markets with new game releases from the beginning of the new year.

According to the Korea Exchange on the 6th, NCSoft's stock price closed at 985,000 KRW, up 0.72% (7,000 KRW) from the previous trading day, approaching the 1 million KRW mark. NCSoft's stock price has risen for nine consecutive trading days, increasing by 14.1%, outperforming the KOSPI return of 7.9% during the same period. NCSoft was also the most purchased stock by institutional investors in the KOSPI market over these nine trading days. Institutions have net bought NCSoft shares worth 94.1 billion KRW during this period.

With four new titles scheduled for release in the first quarter alone, strong expectations for improved earnings appear to be influencing the stock price. First, 'Lineage 2M' will be launched in the Japanese and Taiwanese markets. A teaser site opened on the 4th, and pre-registrations will begin on the 8th. Domestically, 'Blade & Soul 2' is also set to be released, which is expected to further boost overall earnings growth. However, since game stocks generally experience increased volatility around new release dates due to anticipation being priced in, the stock price may temporarily adjust at the time of release.

With a lineup of competitive new titles waiting in the wings, NCSoft is expected to usher in an era of operating profits exceeding 1 trillion KRW this year. According to financial information provider FnGuide, NCSoft's operating profit for this year is estimated at 1.2972 trillion KRW, a 53.1% increase from last year. Sales are also expected to grow by 31.5% to 3.1578 trillion KRW, marking a record high.

Through strategic changes this year, NCSoft's valuation, which has been discounted compared to global developers like Blizzard and EA, is expected to be reassessed. NCSoft plans to actively expand into overseas markets with Lineage 2M this year and unveil multiple new titles targeting Western and console markets. Ho-yoon Jung, a researcher at Korea Investment & Securities, explained, "Until now, NCSoft's regional influence has been limited to Korea and Asia, and there have been no notable achievements in the console market. Starting this year, with strategic changes, we expect to see a reduction in the discount compared to global peers."

However, the fourth-quarter results from last year are expected to fall short of market expectations. Sales are predicted to decline due to reduced year-end event effects for mobile games, and operating profit is expected to decrease compared to the previous quarter due to increased costs related to the professional baseball team, such as year-end special bonuses and championship bonuses. Nevertheless, securities firms' evaluations are not negative. Dong-hwan Oh, a researcher at Samsung Securities, forecasted, "With multiple new releases in the first quarter, an immediate profit rebound is expected, so the short-term earnings slump will likely have little impact on the stock price."