[Click eStock] "Com2uS, Establishing Growth Foundation with New Release... Target Price Up"

Hana Financial Investment Report

[Asia Economy Reporter Minji Lee] Hana Financial Investment upgraded its investment opinion on Com2uS to "Buy" on the 15th and raised the target price by 66% from the previous level to 200,000 KRW. This decision is based on the expectation of performance growth with the release of "Summoners War: Hundred Years' War" in April.

Despite market concerns in the fourth quarter of last year, Com2uS posted solid results. Revenue increased by 11.2% compared to the same period last year, reaching 134.8 billion KRW. This was due to various year-end promotions for "Summoners War."

However, operating profit decreased by 5.8% quarter-on-quarter to 24.8 billion KRW due to increased personnel expenses from the effects of mergers and acquisitions. Seungtaek Hwang, a researcher at Hana Financial Investment, said, "It should be noted that costs have increased due to aggressive new game strategies and mergers and acquisitions for mid- to long-term growth since last year."

Com2uS plans to release Summoners War: Hundred Years' War on April 29. This is the segment the market has been anticipating as a foundation for growth based on new game performance. Since the release of Summoners War in 2014, Com2uS's annual revenue has continuously declined after peaking in 2016.

Summoners War: Hundred Years' War is a real-time strategy game different from its predecessor, and it secured 2 million pre-registrations within about 10 days after pre-registration began on January 28. Through aggressive marketing and rapid e-sports adaptation after release, it is expected to achieve meaningful results. Researcher Hwang said, "Although revenue growth exceeded 8% last year, it was due to the operation of Summoners War and did not guarantee mid- to long-term growth. With the new release, growth is expected to exceed 20% this year."

This year, the performance of Summoners War: Hundred Years' War is expected to drive earnings. The meaningful results of "Buddy Crush," released this month, are also positive. Com2uS's operational know-how with Summoners War is worth noting. Researcher Hwang explained, "Since its release in 2014, revenue has only declined by 0.8% compared to the peak in 2016. Concerns that new games based on the Summoners War IP might cannibalize existing products can be minimized by Com2uS's operational expertise."