[Special Stock] NP Launches Metaverse M&A... 1 Trillion Giant Step Stimulated

[Asia Economy Reporter Hyungsoo Park] NP is showing strong performance. The expansion through mergers and acquisitions (M&A) seems to be influencing the stock price amid growth expectations related to the metaverse.

As of 10:05 AM on the 27th, NP is trading at 12,800 KRW, up 4.07% from the previous day.

NP, established in 2006, is a video content planning and production company centered on customer experience-based 'Brand Experience (BE)'. It grew based on offline BE advertising content using interactive (BTL) advertising methods. While most advertising production companies experienced negative growth last year due to COVID-19, NP grew through video-based online BE content and extended reality (XR) content production. Last year, its sales increased by 11% year-on-year to 22.6 billion KRW, and operating profit rose by 10.2% to 3.6 billion KRW.

Recently, NP participated in a paid-in capital increase of 'Pentabrid', a first-generation digital content production and marketing company, acquiring 1.43 million shares (50.5%) for 5.1 billion KRW. Pentabrid, NP's first subsidiary, is a creative group established in 2001. It has extensive references in social marketing for large corporations, digital content, and web UX·IX production.

NP plans to fully commit to the metaverse IP business starting with the acquisition of Pentabrid. The company aims to preemptively enter the virtual IP (virtual influencer) market ignited by entertainment companies such as SM Entertainment and expand its portfolio into various Brand Experience (BE) and XR content businesses.

The fact that Giant Step's market capitalization exceeded 1 trillion KRW also appears to have positively influenced NP's stock price. Choi Jae-ho, a researcher at Hana Financial Investment, said earlier this month, "Among companies associated with the metaverse, NP is steadily generating actual profits," and added, "It is important to note that NP is undervalued compared to peer groups such as Dexter, Giant Step, and Maxst."

He continued, "NP's core strength lies in XR technology that can be linked to the metaverse," and introduced, "NP operates a 600-pyeong scale 'LED wall-based XR stage,' which is the largest in Korea."

Furthermore, he emphasized, "Attention should be paid to the real-time content that the alliance of Naver, YG Entertainment, and Wizwick will showcase," and explained, "NP established a joint venture YN C&S with Naver, YG Entertainment, and Wizwick Studio for the purpose of next-generation content production and XR total studio development."

He added, "The business model involves producing real-time content streamed to Naver using YG Entertainment's global artist IP," and stressed, "NP's LED wall-based XR stage is easily expandable to live concerts requiring real-time interaction."

He analyzed, "Therefore, although offline concerts will resume after entering the post-COVID-19 phase, hybrid performances adding online shows will become established," and noted, "Currently, major domestic game companies are also understood to be discussing investment and joining YN C&S."

Additionally, he mentioned, "NP is pursuing M&A related to video content companies," and added, "There is a high possibility that NP will develop its own virtual influencer IP through joint development with partner companies."