[Click eStock] "Me2on, an Undervalued Social Casino Metaverse Company"

Hana Financial Investment Report

[Asia Economy Reporter Minji Lee] Hana Financial Investment on the 2nd issued a buy rating and a target price of 11,000 KRW for Mitoon. This is based on the judgment that positive investment sentiment toward metaverse companies could be reflected in this undervalued gaming stock.

The company’s current stock price is undervalued to the extent that it can be explained solely by the value of its subsidiary ‘Mitogen’ shares. The company acquired Mitogen in November 2017 to target the North American and European social casino markets, based on the Asia social casino game ‘Full House Casino’ serviced by the headquarters, and as of the first half of this year, it holds a 43% stake.

Jaeho Choi, a researcher at Hana Financial Investment, said, “The value of the stake held currently exceeds 150 billion KRW based on Mitogen’s market price alone. Mitogen is expected to achieve additional valuation upgrades next year due to external growth momentum from three new releases scheduled for Q4 this year (Pocket Battles, Hopping Cash Casino, Solitaire Perfect Holiday).”

He added, “Attention should be paid to the fact that the company is the best-prepared social casino metaverse company, possessing metaverse game IP, actual VR game launch experience, and tokenization of gameplay,” and explained, “The stock price is definitely in an undervalued phase.”

This year, the company’s expected performance is sales of 118.4 billion KRW and operating profit of 43.4 billion KRW, which are expected to decrease by 9.4% and 2.7% respectively compared to the same period last year. Next year, sales are projected to grow by 10.7% to 131.1 billion KRW, and operating profit by 15.4% to 50.1 billion KRW compared to the previous year.

Researcher Choi said, “Since 2019, the average revenue per daily active user (ARPDAU) has grown by more than 15% year-over-year each quarter, and explosive growth in monthly active users (MAU) is expected due to the three new releases in Q4 this year and the expansion of the casual game lineup next year,” adding, “Sales and administrative expenses are expected to continue to decrease through an optimized curation marketing system tailored to customer characteristics.”