[Click eStock] "Com2uS, Media Content Business Slump... Target Price Down"

Profitable Game Business
Media Content Business Holds Back
Deficit Expected to Continue in 2024

On the 16th, Kiwoom Securities downgraded the target price of Com2uS from 59,000 KRW to 59,000 KRW, considering the uncertainties in the media content business sector. The investment opinion 'Buy' was maintained. Com2uS's closing price on the 15th was 47,450 KRW.

Jingu Kim, a researcher at Kiwoom Securities, stated, "In the media content business sector, it is necessary to present an internal competitive advantage that fundamentally allows the sector to reach normal profits beyond mere profit improvement from lineup announcements." He added, "It is clear that the intrinsic value must be proven through results based on AI and solution-based proprietary competitive DNA." He also mentioned, "Considering the uncertainty regarding the media content business sector reaching normal profits, the positive valuation is implied," and thus downgraded the target price to 59,000 KRW.

Com2uS recorded sales of 772.2 billion KRW and an operating loss of 39.3 billion KRW in 2023. Looking only at the gaming business, sales grew by 13.5% year-on-year, generating an operating profit of 21 billion KRW. However, the media business sector, including Wysiwyg Studios, continued to struggle with a 5.3% decrease in sales, expanding the overall company's deficit.

Com2uS's projected sales for 2024 are 810.5 billion KRW, with an operating loss of 25.6 billion KRW. Researcher Kim said, "The combined sales of Summoners War: Sky Arena and the baseball lineup reflect a 5% increase," and "Soul Strike was newly reflected in sales, assuming an average daily gross revenue of 50 million KRW and an RS of 25%." However, he pointed out that the marketing burden from global publishing based on various lineups and the potential lower-than-expected profit contribution in case of poor performance of new releases could act as potential risk points.