[Click eStock] "JoyCity to Release 2 New Titles This Year... Expecting Re-rating"

Shinhan Investment Corp. analyzed on the 22nd that Joycity could experience a strong re-rating depending on the success of its new games scheduled for release this year. No investment opinion or target price was provided.

In the fourth quarter of last year, Joycity recorded operating revenue of 44 billion KRW and operating profit of 13.1 billion KRW, representing increases of 12.9% and 538.7% respectively compared to the same period the previous year. Kang Seok-oh, a researcher at Shinhan Investment Corp., explained, "Joycity recognized a one-time revenue of 10 million USD, which is a non-refundable portion of the contract fee, following the termination of the distribution contract for 'Freestyle Football 2,' which Joycity was developing and Gala Games was scheduled to publish."

Shinhan Investment Corp. expects two new titles from Joycity to be released this year.

'Starseed: Asnia Trigger,' for which Joycity signed a publishing contract with Com2uS, is expected to launch in the first quarter of this year. He said, "Since Joycity does not bear marketing costs, the profit contribution from sales is expected to be high," adding, "The release region is planned to be Korea in the first quarter, followed by expansion overseas."

He emphasized, "The new casual strategy genre title based on Disney IP is expected to have a soft launch in the first quarter and an official release in the second quarter," adding, "With Disney's approval and the global trend of casual genres such as strategy and puzzle, positive results are anticipated."

He explained, "Sales from existing Freestyle IP and SLG titles show slight quarterly fluctuations but are sufficiently stabilized," and added, "Moreover, the marketing expenses related to Tilting Point, which ended last year, have clearly strengthened the company's profit resilience." He further noted, "With a continued conservative spending policy, the company is prepared to enjoy operating leverage effects from the release of new titles."

In particular, a re-rating is expected depending on the success of the new titles. He emphasized, "The new titles target overseas users rather than Korea, where demand is concentrated in a few genres and competition is intense," adding, "If successful, Joycity could see strong multiple re-rating along with earnings growth, which is why it deserves attention."