Up 9.47% So Far This Month
Fully Recovering Last Month's 6.73% Decline
[Asia Economy Reporter Song Hwajeong] NCSoft, which had been sluggish due to the boycott movement, has recently rebounded thanks to foreign buying momentum. Attention is focused on whether it can maintain the upward trend and settle in the 900,000 KRW range.
According to the Korea Exchange on the 12th, NCSoft's stock price has risen 9.47% so far this month until the previous day. It has fully recovered the decline (-6.73%) over the past month.
NCSoft's strength was driven by foreigners. Foreign investors have consecutively net purchased NCSoft for 16 trading days recently. During this period, the net foreign purchase amounted to 269.5 billion KRW, ranking fourth after Samsung Electronics, SK Hynix, and Kakao. Due to the sustained buying, the foreign ownership ratio rose from 48.89% at the beginning of the year to 51.94%.
Although the stock price had been sluggish due to the boycott movement and delays in new releases, and the first-quarter earnings this year are expected to be weak, foreigners seem to be focusing on the anticipation of ‘Blade & Soul 2 (hereafter Bladesoul 2)’, expected in early May. According to financial information provider FnGuide, NCSoft's first-quarter earnings consensus forecasts sales of 556.8 billion KRW, down 23.84% year-on-year, and operating profit of 146 billion KRW, down 39.52%. Hwang Hyunjun, a researcher at DB Financial Investment, analyzed, "NCSoft's first-quarter earnings will fall short of consensus," citing "a decrease in ‘Lineage 2M’ sales due to the expiration of update effects, a decline in ‘Lineage M’ sales due to the boycott movement, and underperformance in the Japanese launch of Lineage 2M" as the main reasons for the contraction. Additionally, special bonuses, increased labor costs due to salary raises, and increased marketing expenses for new releases are cited as factors reducing profitability.
From the second quarter, the Bladesoul 2 momentum is expected to fully materialize. Lee Seunghoon, a researcher at IBK Investment & Securities, said, "Pre-character creation for Bladesoul 2 is scheduled to start from the 22nd, so the release is expected in May," adding, "Pre-registrations for Bladesoul 2 have already exceeded 4 million, and the number of existing PC Blade & Soul users is increasing, focusing gamers' attention." He added, "Sales in the second quarter are estimated to increase by about 50% compared to the previous quarter," and "Since the new game is likely to be a hit, investment sentiment will improve rapidly." Researcher Hwang also said, "Bladesoul 2, which utilizes the IP of the hit game Bladesoul, has high visibility for early success and mid-term performance, so it remains a key focus for NCSoft's earnings improvement this year."
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