Game Stocks' Counterattack... KOSDAQ Market Cap Competition Reignites

Pearl Abyss Surpasses 100,000 Won in 2 Months
Market Cap Exceeds 7 Trillion Won, Reclaims 3rd Place
Wemade's Stock Price Doubles in a Month
Market Cap Jumps from 40th to 7th Place
Kakao Games Also Rises to 5th Place

[Asia Economy Reporter Song Hwajeong] As gaming stocks, which had been sluggish, begin to rebound, the competition for market capitalization on the KOSDAQ is reigniting. While gaming stocks have turned upward, secondary battery stocks, which had seen significant price increases, are showing signs of hesitation due to upward pressure and unexpected negative factors, and biotech stocks are still struggling.

According to the Korea Exchange on the 22nd, Pearl Abyss surged 12.21% the previous day, recovering the 100,000 KRW level for the first time in about two months since the end of August based on the closing price. During the session, it reached 108,200 KRW, marking a 52-week high. Consequently, its market capitalization exceeded 7 trillion KRW, reclaiming 3rd place. This is the first time Pearl Abyss has been in 3rd place in about four months since early July.

The anticipation of new releases remains valid, and with expectations of solid third-quarter earnings this year, this has been interpreted as a driving force behind the stock price rise. According to Ebest Investment & Securities, Pearl Abyss's consolidated third-quarter earnings are expected to show a 6.4% increase in sales from the previous quarter to 94.2 billion KRW, with operating profit turning positive at 8.3 billion KRW. Sung Jonghwa, a researcher at Ebest Investment & Securities, said, "Third-quarter earnings are expected to improve significantly compared to the previous quarter and slightly exceed market consensus. There is a possibility of launching Black Desert Mobile in China within the year, and based on the potential from obtaining the Chinese license for Black Desert PC, we are raising Pearl Abyss's target price from 92,000 KRW to 130,000 KRW."

Wemade has also recently entered the top 10 in market capitalization with a significant rise in its stock price. Wemade, which was ranked 40th earlier this month, jumped to 7th place. The stock price soared from 70,000 KRW at the end of last month to 140,000 KRW. The global success of the mobile MMORPG 'Mir4' has propelled the stock price. Recently, the global version of Mir4 surpassed 800,000 concurrent users, and the number of operating servers increased to 152. Notably, Mir4 incorporates blockchain technology, featuring a 'Play to Earn (P2E)' system that allows players to earn money while gaming, drawing attention as a tech company related to new technologies such as blockchain and the metaverse. Jung Hoyoon, a researcher at Korea Investment & Securities, said, "Wemade is one of the first gaming companies to invest in innovative technologies like blockchain. Connecting games and reality through virtual assets is important as it can create new business models for both game companies and users, and Wemade is leading these new attempts worldwide, which is positive."

Kakao Games, which was ranked 7th earlier this month, also recovered its market capitalization to the 5 trillion KRW range, rising to 5th place.

On the other hand, secondary battery stocks, which had been thriving in the bearish market since September, have recently shown signs of hesitation. Fatigue from the short-term surge has accumulated, and negative news from Tesla has adversely affected stock prices. The previous day, L&F fell more than 6%, surrendering 3rd place in market capitalization to Pearl Abyss. As of 9:40 AM that day, L&F was trading at 196,200 KRW, down 1,600 KRW (0.81%) from the previous day, marking the third consecutive day of decline. EcoPro BM also plunged more than 8% the previous day. On the 20th (local time), Tesla announced it would apply lithium iron phosphate (LFP) batteries instead of lithium-ion batteries such as nickel-cobalt-aluminum (NCA) for its Standard Range model to reduce costs, which led to a decline in domestic secondary battery companies' stock prices. LFP batteries are mainly produced by Chinese companies CATL and BYD. In contrast, EcoPro BM has product lineups of NCA and NCM (nickel-cobalt-manganese), and L&F mass-produces NCMA (nickel-cobalt-manganese-aluminum) cathode materials. The securities industry views Tesla's expansion of LFP battery adoption as not damaging the fundamentals of domestic companies. KB Securities researcher Lee Changmin said, "As expected by the market, the direction of equipping LFP batteries for budget vehicles and lithium-ion batteries for mid-to-high-end vehicles will not change significantly. Therefore, the LFP battery replacement issue is not considered a fundamental damage factor for domestic secondary battery value chain companies targeting mid-to-high-end electric vehicles."

Biotech stocks, which once almost monopolized the top spots in KOSDAQ market capitalization, are still weak. The market capitalization of KOSDAQ leader Celltrion Healthcare has decreased by about 3 trillion KRW this month, HL Biotech, which was 4th, dropped to 6th, and Celltrion Pharm, which was 6th, fell to 8th. Seegene, which was 10th, has fallen out of the top 10.