[Click eStock] "Netmarble, Anticipation for New Release of Modoo Marble"

Meritz Securities Report

[Asia Economy Reporter Kwangho Lee] Meritz Securities emphasized on the 27th that Netmarble is expected to show growth momentum with the release of new games in the first quarter. The target price was raised from 63,000 KRW to 73,000 KRW. The closing price on the previous trading day was 60,600 KRW.

Researcher Hyojin Lee of Meritz Securities stated, “With partial repayment of borrowings through a capital reduction of its subsidiary and an increase in the value of held shares, liquidatable assets exceed liabilities, so the financial situation is judged to have bottomed out.”

Lee added, “Although the company turned to a deficit last year due to the poor performance of the only new release, ‘Seven Knights Revolution,’ more than one new game is scheduled to be released each quarter this year. Even if only one moderately successful game is released, an operational turnaround is expected.” She also added, “The issuance of Chinese game licenses is a bonus.”

Netmarble plans to release ‘Modoo Marble: Meta World’ in the first quarter of this year. This game involves real estate NFT transactions in major cities such as New York, Paris, Seoul, and Bangkok, and combines the existing ‘Modoo Marble’ with the blockchain platform ‘Decentraland.’ ‘Modoo Marble’ achieved global sales of approximately 400 billion KRW within about one year and six months after its release in 2013.

Lee explained, “During periods of rising coin prices, speculative demand can lead to increased in-game sales, and the recent blockchain rebound seems suitable to raise expectations for the game’s performance.”

She also analyzed, “Although our field research found some small game companies with expected financial risks within 1 to 2 years, liquidatable assets sufficiently cover liabilities, and with over 800 billion KRW in cash secured, as well as various assets such as Coway and treasury shares, financial concerns are not significant.”