[Click eStock] "Pearl Abyss, Red Desert Release Delayed... Target Price Lowered to 50,000 Won"

NH Investment & Securities maintained its 'Buy' rating on Pearl Abyss on the 16th but lowered the target price from 70,000 KRW to 50,000 KRW.

Jaemin Ahn, a researcher at NH Investment & Securities, explained, "Contrary to initial expectations, the release of 'Red Desert' has been postponed to 2025, making an operating loss inevitable in 2024, and the stock price has fallen sharply due to investor disappointment. However, once marketing for Red Desert intensifies from summer, expectations for the new title will rise again."

Researcher Ahn added, "Although we adjusted this year's earnings forecast due to the delay of Red Desert, which was expected to be released this year, earnings are expected to recover with the new title launch next year."

Considering this, he explained that the target price was calculated by applying a price-to-earnings ratio (PER) of 22 times to next year's earnings per share (EPS).

Pearl Abyss reported sales of 84.4 billion KRW and an operating loss of 5.5 billion KRW in the fourth quarter of last year.

Researcher Ahn stated, "As the impact of the 'Land of Morning' update conducted in the second quarter disappears, a decline in sales is inevitable. Given the aging intellectual property (IP), an overall decline in 2024 is unavoidable, but they will seek a sales rebound through the 10th-anniversary event and the 'Land of Morning Part 2' update."