[Click eStock] Com2uS, Last Year’s Q4 Was Difficult but...

[Asia Economy Reporter Junho Hwang] Hanwha Investment & Securities has lowered the target price for Com2uS to 210,000 KRW.

Hanwha Investment & Securities expects Com2uS to record sales of 136.6 billion KRW and operating profit of 15.8 billion KRW in the fourth quarter of last year. This is estimated to be 13% below the consensus on operating profit. Due to a 12% increase in labor costs and a 40% increase in marketing expenses compared to the previous quarter, it is expected to be difficult to anticipate significant earnings growth.

However, in February, the issuance and listing of the proprietary coin C2X will be completed, and in March, the soft launch of the new P2E title "Summoners War Chronicle" is scheduled. "Chronicle" is considered a highly anticipated title as it introduces a P2E system to the MMORPG genre based on an IP verified in the Western region. The official launch of the metaverse platform "Com2Verse" will also take place within the year. Despite the normalization of COVID-19, the expansion of remote work and decentralized office operations is increasing demand for office-type metaverse platforms, which is expected to create a favorable environment for the company. Although short-term earnings contributions may be difficult, it is expected to become a mid- to long-term source of revenue beyond gaming.

Sohee Kim, a researcher at Hanwha Investment & Securities, stated, "Reflecting the decline in valuations of peer companies, we lowered the target multiple for the gaming business to 18 times and applied it to Com2uS's target price." She added, "There is potential for additional upside in the stock price depending on how sustainable the economic system of the new P2E title released in the first quarter of this year will be, but considering the current operating value, equity value, and net cash, the current valuation is judged to be in an undervalued range."