[Click eStock] "DevSisters to Achieve Structural Profit Turnaround"

'13% Workforce Reduction' Painful Restructuring
Expecting Sales Growth for 3 New Releases This Year

Sangsangin Securities forecasted on the 11th that game company Devsisters will turn to a profitable structure thanks to drastic restructuring and increased sales.

Choi Seung-ho, an analyst at Sangsangin Securities, stated in a report on the same day, "It appears that Devsisters reduced its workforce by 13% in the fourth quarter due to restructuring following the launch of an emergency management system," adding, "This is the fastest workforce reduction pace among domestic game companies." He also estimated, "Although the labor costs in the fourth quarter rose by 7% to 20.7 billion KRW, this was due to one-time expenses such as severance pay." He analyzed that once the restructuring is completed, its effects will be reflected in the financial figures.

Analyst Choi evaluated, "Devsisters has high expectations for new releases along with successful cost reductions." Devsisters is expected to release anticipated titles such as Moheop-ui Tap around June this year and Oven Smash in the second half.

Along with new releases, overseas sales of existing games are also expected to increase. Researcher Choi reported, "After the 3rd anniversary update of Cookie Run Kingdom, traffic recovered both domestically and in the U.S., increasing daily sales to 300 million KRW excluding China," and added, "In China, although it had fallen out of the chart rankings, it recovered to around the 30th position in sales rankings after a major update."

He predicted, "With cost reductions and the release of three new games, the company will put an end to its deficit streak and enter a structural profitability phase." Accordingly, he newly set the investment opinion to ‘Buy’ and the target stock price to 70,000 KRW.