[Click eStock] "Wemade, Momentum Valid Beyond Q2"

Hana Financial Investment "Wemade Target Price Raised from 64,000 Won to 77,000 Won"
Momentum Maintained by Mir Series' Expansion into Asia

[Asia Economy Reporter Gong Byung-sun] An analysis suggests that Wemade will continue the positive momentum it achieved in the first quarter into the second quarter. The Asian expansion of the ‘Mir’ series is expected to sustain this momentum. On the 13th, Hana Financial Investment raised Wemade’s target stock price from the previous 64,000 KRW to 77,000 KRW, maintaining a ‘Buy’ investment rating.

In the first quarter of this year, Wemade posted results that exceeded market expectations. Revenue reached 76 billion KRW, a 61.8% increase compared to the previous quarter, and operating profit turned positive at 27.5 billion KRW after a year. The foundation of Wemade’s performance is Mir4. The mobile game segment, which includes Mir4, recorded revenue of 55.1 billion KRW, surpassing the previous quarter’s 47 billion KRW. On a daily revenue basis, it is estimated to have exceeded 500 million KRW, surpassing the previous quarter’s level. Hwang Seung-taek, a researcher at Hana Financial Investment, said, “Expanding content that suits user preferences and an appropriate monetization structure have maintained steady revenue levels,” adding, “While it is difficult to expect revenue growth going forward, a smooth landing seems likely.”

The momentum is expected to continue beyond the second quarter. Although concerns about second-quarter results remain, the impact on earnings is expected to be limited depending on the Mir4 update in Korea and the performance of Mir2 PC online game serviced by China’s Longhua Group. Additionally, results from China are anticipated. A distribution (publishing) contract for Mir4’s service in China is expected to be signed during the second quarter. Researcher Hwang explained, “Since it is an intellectual property (IP) with high recognition in China, the publishing contract itself will have a positive effect on improving investor sentiment.” Furthermore, Mir4 is expected to be serviced in the Asian region in the third quarter, and MirM is scheduled for release in the fourth quarter. Hana Financial Investment’s analysis indicates that the momentum is sufficient as Mir4 aims for service in the Chinese region in the first half of next year.

However, Hwang advised a neutral approach to the cryptocurrency-related business due to its high volatility. Wemade is expected to hire about ten personnel related to cryptocurrency this year.