[Click eStock] "NCSoft, Significantly Undervalued"

Maintaining No.1 Sales Ranking in Key Markets like Korea and Taiwan
Korea Investment "NCSoft Target Price Raised from 920,000 KRW to 1,070,000 KRW"

[Asia Economy Reporter Gong Byung-sun] NCSoft's recently released title, Lineage W, continues to hold the number one spot in sales rankings in markets such as South Korea and Taiwan. Analysts suggest that the profit increase driven by Lineage W's success has not yet been fully reflected in the current stock price, indicating an undervalued state.

According to Korea Investment & Securities on the 3rd, NCSoft maintained the number one sales ranking in key markets where the Lineage intellectual property (IP) has significant influence, including South Korea and Taiwan. Even in Japan, a relatively barren market for MMORPGs (Massively Multiplayer Online Role-Playing Games) in Korea, Lineage W ranks 23rd in sales on Google Play.

Jung Ho-yoon, a researcher at Korea Investment & Securities, stated, "As revealed in the Q3 conference, the average daily sales in the very early stage reached 12 billion KRW per week, and sales have gradually stabilized downward," adding, "Compared to Lineage M and Lineage 2M, the pace is more stable."

Thanks to the success of Lineage W, performance improvement is expected from the fourth quarter of this year. In fact, Lineage M recorded an average daily sales of 5.99 billion KRW in Q3 2017, the quarter immediately after its release. Additionally, Lineage 2M, released on November 27, 2019, showed average daily sales of 4.1 billion KRW in Q4 2019, followed by 3.75 billion KRW in Q1 of last year.

Korea Investment & Securities estimates the average daily sales of Lineage W to be 5.08 billion KRW in Q4 this year and 3.5 billion KRW in Q1 next year. Operating profit is also expected to increase by 68.2% year-over-year to 263.6 billion KRW and by 431.3% to 301.4 billion KRW, respectively.

Accordingly, Korea Investment & Securities maintained a "Buy" investment rating on NCSoft and raised the target stock price from 920,000 KRW to 1,070,000 KRW. Researcher Jung explained, "With the recent additional release of Lineage 2M in 29 countries across North America and Europe, performance improvement can be expected," and added, "The current stock price is undervalued as the increased profits from Lineage W's success have not yet been fully reflected."