[Click eStock] "Kakao Games, Uma Musume Performance Good but Odin Sales Declining"... Target Price Down

[Asia Economy Reporter Lee Jung-yoon] NH Investment & Securities lowered the target price for Kakao Games from 90,000 KRW to 75,000 KRW on the 29th, considering that while the new mobile game Uma Musume: Pretty Derby (Uma Musume) is showing favorable results, the flagship title Odin is experiencing a decline in sales. However, the buy rating was maintained.

Kakao Games' sales for the second quarter of this year are expected to increase by 178.7% year-on-year to 360.8 billion KRW, and operating profit is projected to rise by 851.1% to 77.1 billion KRW. Although the operating profit is expected to slightly miss the market consensus estimate of 81 billion KRW, it is analyzed to maintain a high growth rate.

Uma Musume showed strong performance by rising to second place in Google App Store sales as of 10 a.m. the previous day. This is positively evaluated as it lowers the sales proportion of Odin and diversifies revenue sources. The estimated daily sales of Uma Musume exceed 1 billion KRW, surpassing the initial forecast of 700 million KRW. Although only 10 days of sales will be reflected in the second quarter, it is expected to contribute to performance from the third quarter onward. Looking at the Japanese version of Uma Musume, which has been serviced for over a year, continuous updates and steady sales are anticipated.

Jaemin Ahn, a researcher at NH Investment & Securities, said, "In particular, the addition of the highly anticipated character Kitasan Black in July is expected to boost sales." He added, "Furthermore, four new titles are scheduled for release in the second half of the year, along with Odin's entry into the Japanese market, so depending on the performance of these games, there is potential for growth in earnings."