[Click eStock] "Nexon Games, Investment Points More Important Than Numbers"

Sangsangin Securities analyzed on the 29th that regarding Nexon Games, the focus should be on the know-how about games and the strong development team rather than numerical performance figures. The investment opinion 'Buy' and the target stock price of 20,000 KRW were maintained.

Sangsangin Securities analyzed on the 29th that Nexon Games' sales in the fourth quarter of last year are expected to be 40.4 billion KRW, with an operating loss of 6.4 billion KRW. Seungho Choi, a researcher at Sangsangin Securities, said, "There has been no turnaround yet in China’s Blue Archive, and the decline in sales of Hit 2 was larger than expected," adding, "With the recruitment of personnel for new game development continuing, labor costs are expected to remain high, leading to a larger operating loss."

However, Researcher Choi analyzed that it is necessary to focus on positive factors that will arise in the future rather than on current performance. He said, "The Blue Archive animation is scheduled to air around April," adding, "Of course, releasing an animation generally does not have an immediate significant effect on sales, and since it is presumed that only the intellectual property (IP) was simply licensed, it is difficult to expect a large revenue share." He continued, "However, it is positive in terms of attracting a new fandom and loyalty, and the release of the animation will soon lead to an increase in IP value, which is judged to be very positive for long-term sales trends."

He emphasized that the focus should be on the development personnel and know-how possessed by Nexon Games. He said, "Nexon Games holds Korea’s top subculture IP and has about 800 developers, one of the largest in the industry, who are freely developing games without concerns such as restructuring," adding, "The heads with high know-how and hit ratio, such as Yonghyun Park and Yongha Kim, are leading the projects."

He added, "Moreover, as a core developer under Nexon, they are developing new titles with IPs like Dungeon & Fighter (DNF) as a bonus," emphasizing, "There is no doubt that it is one of the top domestic development studios worth looking forward to for upcoming new releases."