[Click eStock] "Neowiz, New Releases to Watch from Q2... Target Price 'Downgraded'"

NH Investment & Securities analyzed on the 19th that Neowiz is expected to have new release momentum starting from the 2nd quarter. The investment opinion was maintained as 'Buy,' but the target price was lowered to 28,000 KRW due to a downward revision of earnings estimates.

Ahn Jae-min, a researcher at NH Investment & Securities, said, "The releases of 'Goyang-i wa Seupeu' and 'The Legend of Heroes: Gagab Trilogy' are scheduled for the 2nd quarter."

He explained, "'Goyang-i wa Seupeu,' which recently signed a publishing contract with China's Kingsoft and received a license, is expected to generate significant advertising revenue due to the genre characteristics of idle simulation games, and good performance is anticipated in the Chinese market. Considering the favorable response at G-STAR 2023 and the intellectual property (IP) competitiveness, 'The Legend of Heroes: Gagab Trilogy' is also expected to perform well, with a June release anticipated."

Meanwhile, NH Investment & Securities forecasted that Neowiz will record sales of 94.7 billion KRW and operating profit of 9.1 billion KRW in the 1st quarter, representing increases of 38.1% and 630.2% year-on-year, respectively. He said, "Operating profit is expected to exceed the estimate of 5.6 billion KRW and the consensus of 8.1 billion KRW. Sales increased due to the year-end discount promotion of 'P-ui Geojit' and bonuses and marketing expenses reflected in the previous quarter are expected to decrease."