[Click eStock] "Netmarble, Operating Profit Expected to Increase 33% YoY This Year... Continued Performance Improvement"

[Asia Economy Reporter Jihwan Park] DS Investment & Securities announced on the 28th that Netmarble has shown a continuous improvement in performance due to the effects of new releases from last year through the first half of this year. Accordingly, it presented a 'Buy' investment rating and a target price of 158,000 KRW.

Seonghoon Kang, a researcher at DS Investment & Securities, stated, "Netmarble's expected sales and operating profit for this year are 2.8212 trillion KRW and 371.4 billion KRW, respectively, representing increases of 11.5% and 32.9% compared to the previous year."

In particular, this year is expected to strengthen the core capabilities of the game company. Starting from the fourth quarter of last year, new releases were actively launched, including Seven Knights 2 and two other titles, and through aggressive new launches, the fundamentals of the game company's core business are improving. Notably, 5 to 6 new IP titles are also scheduled for release soon. Titles such as The Second Country and Seven Knights Revolution are expected to be released in the first half of the year. Researcher Kang stated, "The effects of Seven Knights 2 in the fourth quarter of last year and new releases this year will drive performance growth and profitability improvement."

Additionally, based on abundant cash liquidity, continuous investments have been made in companies such as Coway, Big Hit, and Kakao Games. These investments have yielded successful results, positively impacting valuation through an increase in equity value. Researcher Kang forecasted, "As the performance of affiliates like Coway and Big Hit improves, the return on equity (ROE) of 3.5% in 2019 is expected to gradually improve and rise to 7.0% by 2022."