[Featured Stock] 'Earnings Shock' Netmarble Falls Over 10% Amid Challenging Performance Outlook This Year

[Asia Economy Reporter Hwang Yoon-joo] Netmarble, which recorded an earnings shock in the first quarter, is plummeting as the securities industry lowered its target stock price, stating that performance improvement this year will be difficult.

As of 9:23 AM on the 13th, it is trading at 75,100 KRW, down 10.49% (8,800 KRW) from the previous session.

Korea Investment & Securities lowered Netmarble's target stock price from 140,000 KRW to 100,000 KRW, citing increased fixed cost burdens.

Jung Ho-yoon, a researcher at Korea Investment & Securities, diagnosed, "The sales of the existing lineup in the first quarter this year were worse than expected, and the burden of fixed costs such as labor and marketing expenses increased, making the success of new releases more important."

However, he added, "The release schedules of works planned for the second quarter are set, reducing schedule-related uncertainties, and many new releases based on major IPs are expected in the first half of the year, so performance is anticipated."

Hyundai Motor Securities also adjusted the target stock price down by 15% from the previous level to 110,000 KRW. This is based on the judgment that meaningful performance improvement this year is difficult due to the absence of major new releases, stabilized declining sales of major games, and increased cost burdens.

Kim Hyun-yong, a researcher at Hyundai Motor Securities, analyzed, "The release of the major new title 'Seven Knights Revolution' in July could be a short-term momentum, but due to large-scale deficits and interest burdens from mergers and acquisitions, meaningful profit growth this year is difficult. Compared to other large game companies, the valuation (stock price level relative to performance) attractiveness is also lower, making a significant rebound unlikely."