[Click eStock] "NCSoft, New Release Expectations Reflected... Limited Upside Potential"

Shinhan Investment Corp. Report

[Asia Economy Reporter Kwangho Lee] Shinhan Investment Corp. has downgraded its investment opinion on NCSoft from Buy to Neutral. No target price was provided. The analysis suggests that the expectations for new releases have already been reflected in the stock price.

Researcher Seok-oh Kang of Shinhan Investment Corp. stated, “NCSoft's stock price has risen more than 30% over the past three months due to investment points such as marketing for the new game 'TL (Throne and Liberty)' through a global publisher and the establishment of a new cash cow in the form of characters,” adding, “Even assuming TL's initial daily revenue exceeds 1.5 billion KRW, the current stock price leaves limited room for further gains.”

Researcher Kang noted, “Although cost controls on labor and marketing expenses are expected to be strengthened, the decline in mobile game sales is concerning,” and “It is not positive that domestic competitors will release many new Lineage-like MMORPGs this year.”

He further added, “The P2W (pay to win) elements and siege warfare content in TL are worrisome considering the preferences of North American and European users,” and “Since the overseas performance of new releases has been poor for a long time, for the stock price to be re-evaluated, NCSoft must present content that exceeds expectations or actually achieve results in the North American and European markets.”