[Click eStock] "Com2uS, Time to Watch Price and Situation"

Need to Gauge Anticipation for New Release 'Summoners War: Chronicle'
If Successful, Earnings Expected to Rebound from 2Q Next Year

[Asia Economy Reporter Minwoo Lee] An analysis suggests that attention should be paid to Com2uS's stock price ahead of the release of its new title.

On the 21st, Korea Investment & Securities emphasized the need to focus on Com2uS's stock price ahead of the launch of the new game "Summoners War: Chronicle."

Jung Hoyoon, a researcher at Korea Investment & Securities, explained, "The two major rises and falls in Com2uS's stock price over the past 3 to 4 years have both coincided with new game releases. During these periods, expectations for the new title were reflected in the stock price, causing it to rise, but if the release schedule was delayed or the performance after release fell short of expectations, the stock price declined. Therefore, it is necessary to pay attention once again to Com2uS's new game release."

He also viewed the stock price as having fallen to a manageable level. Over the past 5 to 6 years, Com2uS's stock price floor has been supported around the 90,000 to 100,000 KRW range. Com2uS's net profits in 2018, 2019, and 2020 were 129.7 billion KRW, 109.6 billion KRW, and 76.4 billion KRW respectively, which suggests from a valuation perspective that the price-to-earnings ratio (PER) of 9.0 to 14.0 times supported the stock price floor.

Researcher Jung said, "Although Com2uS's operating profit in Q2 was 11 billion KRW, which seems significantly lower compared to the past, this is because marketing expenses doubled due to the release of 'Summoners War: Hundred Years' War.' If marketing expenses normalize, it is difficult to say that operating profit has significantly decreased compared to the past. Considering the equity value of Wysiwyg Studios and Devsisters, in which Com2uS has invested, the current stock price can be seen as sufficiently at the lower band."

The key question is whether expectations for the new title will be maintained. After the two previous new releases, the stock price rose reflecting investor expectations but then fell due to poor actual performance. It is uncertain whether the market will spread expectations for the new title this time as well. However, like the previous two new titles, "Summoners War: Chronicle" is also based on the popular intellectual property (IP) Summoners War. Being a massively multiplayer online role-playing game (MMORPG) genre, it has the advantage of a higher average revenue per user (ARPU) compared to other genres.

Researcher Jung said, "Since the stock price has also fallen to the lower valuation band, it is comfortable to place hopes on the possibility of success. However, caution is needed regarding risks such as delays in the scheduled release planned for Q1 next year."

Against this background, Korea Investment & Securities maintained a 'Buy' investment rating on Com2uS with a target price of 160,000 KRW. The closing price on the previous day was 116,900 KRW.