[Click eStock] Netmarble, New Release Momentum and Gradual Earnings Recovery

[Asia Economy Reporter Lee Seon-ae] NH Investment & Securities announced on the 21st that it maintains a buy rating on Netmarble but lowers the target price from the previous 132,000 KRW to 95,000 KRW.

Ahn Jae-min, a researcher at NH Investment & Securities, stated, "Since the second half of last year, there has been a significant delay in the release of new games, resulting in no revenue contribution from new titles, while existing games are experiencing revenue declines due to aging." He added, "This sharply reduced new game releases after the second half of last year do not align with Netmarble's strategy of growing revenue through multiple releases."

Nevertheless, he expects that with new game releases scheduled after June, the momentum from new titles and earnings will improve compared to the first half of the year. Starting with ‘Merge Kungya Island’ on the 15th and ‘Disney Mirrorverse’ on the 23rd, the highly anticipated ‘Seven Knights Revolution’ is set to launch on July 28th.

Following these, releases such as ‘Overprime’, ‘Grand Cross W’, ‘Hype Squad’, and P2E games like ‘Golden Bros’, ‘Champions: Ascension’, and ‘Modoo Marble: Metaverse’ are in preparation. ‘Merge Kungya Island’, released on the 15th, has shown a strong start by rising to 20th place in the Apple App Store revenue rankings (as of the 19th). It is a merge game, currently trending in the casual genre, incorporating Netmarble’s IP ‘Kungya’, which is expected to attract light users.

Researcher Ahn said, "Netmarble, which recorded a significant operating loss in the first quarter, is expected to recover from the second half when new game releases become active," but added, "However, an operating loss in the second quarter is also inevitable." Netmarble’s second-quarter earnings are forecasted at 661.6 billion KRW in revenue (a 14.6% increase) and an operating loss of 2.2 billion KRW (turning to a deficit).