NCSoft Becomes the Second 'Emperor Stock' Among BBIG

Surpassing 1 Million KRW Closing Price the Previous Day... New Record High Over 1.03 Million KRW Intraday
Second Top Stock After LG Chem in BBIG Sector
Investor Sentiment Rises on New Releases and Entertainment New Business Expectations

[Asia Economy Reporter Minwoo Lee] NCSoft has become the second “emperor stock” with a stock price exceeding 1 million KRW among the BBIG (Bio, Battery, Internet, Game) sectors, which have been considered the trend after COVID-19. This is interpreted as being due to the high potential evaluated from the anticipation of new releases this year and the entry into the entertainment new business.

According to the Korea Exchange on the 4th, NCSoft recorded a closing price of 1,008,000 KRW the day before. Although it touched the 1 million KRW mark intraday on the 11th and 22nd of last month, it surpassed 1 million KRW for the first time based on the closing price. Intraday, it soared to as high as 1,032,000 KRW, setting a new record high.

This is the second time an emperor stock has appeared among the BBIG sectors that have emerged as a trend after COVID-19. On the 13th of last month, LG Chem opened the door to the emperor stock by recording a closing price of 1 million KRW for the first time. Samsung Biologics aimed to become an emperor stock last year riding the COVID-19 vaccine boom but ultimately stopped at 880,000 KRW.

Last year’s fourth-quarter performance fell short of expectations. According to financial information provider FnGuide, the market consensus for NCSoft’s fourth-quarter results last year was sales of 543.2 billion KRW and operating profit of 167.2 billion KRW. This represents an increase of 1.75% and 18.42%, respectively, compared to the same period last year. This contrasts with the previous quarters where sales rose by more than 30%. Operating profit is also expected to fall below 200 billion KRW for the first time last year.

However, expectations were higher that the momentum would be reignited with new releases. First, pre-registration for the new title “Blade & Soul 2” will begin on the 9th. It is the sequel to “Blade & Soul,” released in 2012, and is considered one of NCSoft’s representative works along with “Lineage.” Lineage 2M is preparing for overseas expansion. Pre-registration started in Taiwan and Japan on the 8th of last month, and it is expected to be released next month.

There is also growing anticipation for the entertainment new business. On the 28th of last month, the K-pop platform “Universe” was simultaneously launched in 134 countries. It records fandom activities both online and offline and provides rewards like a game. Last month, NCSoft partnered with CJ ENM to secure intellectual property (IP) rights of K-pop singers, which is a strategic move with the expansion of “Universe” in mind. NCSoft’s AI technology, which has been invested in for over 10 years, is also applied, raising expectations for the convergence of AI and the content market.

Kim Chang-kwon, a researcher at Mirae Asset Daewoo, explained, “The fourth-quarter results were the bottom, and this year, performance momentum is expected every quarter with new releases. Expectations are also growing for new business results in entertainment, finance, and artificial intelligence following games.”