[Click eStock] "DoubleU Games, Business Expansion and Shareholder Returns"

On the 10th, Eugene Investment & Securities analyzed that W Games is expected to expand its business and return value to shareholders, which will significantly resolve its undervaluation.

Jeong Eui-hoon, a researcher at Eugene Investment & Securities, stated in a report on the same day, “W Games' first-quarter performance is expected to show sales of 158.1 billion KRW and operating profit of 47.2 billion KRW, increasing by 5.5% and 10.6% respectively compared to the same period last year,” adding, “The operating profit is in line with the market consensus of 47.7 billion KRW.”

Researcher Jeong explained, “User traffic, which rebounded after the new content update in the third quarter of last year, continued into the first quarter, positively affecting sales. Additionally, the margin is estimated to have improved due to the removal of DDI amortization costs in operating expenses compared to the previous year.”

W Games’ Swedish iGaming company acquisition, 'Supernation,' which was acquired earlier this year, is expected to be incorporated as a subsidiary in the third quarter of this year. Most of the currently operated iGaming games (including Supernation) require users to access via the web rather than a mobile app to play, and most game operators do not develop slot games themselves but operate by receiving IP from external sources.

Researcher Jeong analyzed, “W Games will combine its slot game and mobile app development capabilities, secured through social casino game services, with Supernation’s iGaming operational know-how (mainly related to regulations) to expand market share within the iGaming market and improve profitability.”

Additionally, W Games announced at this week’s shareholders’ meeting that it will cancel about 10% of its treasury shares, specifically 183,745 shares out of 1,848,756 shares held (1% of total issued shares), and if there are no M&A investments or strategic alliances using treasury shares within the next two years, it plans to cancel more than 50% of its treasury shares.

Furthermore, the company showed an active stance on shareholder return policies by stating that if the stock price does not reach the public offering price of 65,000 KRW by the end of the year, it will actively consider a bonus issue.

He analyzed, “Along with stable performance from the existing social casino business, the expansion of iGaming and skill games, and active shareholder return policies are expected to significantly resolve the company’s valuation discount.”