[Click eStock] NCSoft, Operating Profit Improvement in Second Half... Target Price Raised to 230,000 Won

On the 13th, Kiwoom Securities raised the target price for NCSoft from 200,000 KRW to 230,000 KRW, reflecting changes in operating profit estimates. The investment rating was maintained at Outperform (exceeding market returns).

Kim Jin-gu, a researcher at Kiwoom Securities, stated in a report on the same day, "We positively reflected the willingness to improve resource efficiency, including restructuring, and raised the target valuation from 22.5x to 25x. If substantial changes related to consoles or blockchain are realized first, further flexible upward adjustments to NCSoft's fair corporate value may be possible."

Earlier, NCSoft announced a comprehensive company-wide strategic change plan during its earnings conference call, which includes future workforce restructuring, asset liquidation plans such as real estate, setting release timeline limits for new titles, and an active investment policy.

Regarding this, researcher Kim Jin-gu said, "Officially disclosing workforce restructuring in an open setting is a strong decision within organizational decision-making, clearly conveying the company's strong will to overcome the current crisis. However, for fundamental structural improvement, investments in global console studios that can be brought under consolidated control or acquisitions of core development teams must precede. In particular, there is no change in the previous judgment that development of blockchain games leveraging multiplayer strengths and related solution investments are necessary."

NCSoft's first-quarter operating profit of 25.7 billion KRW exceeded Kiwoom Securities' estimate by 100.7%. This is analyzed as a result of controlling labor costs and marketing expenses. Researcher Kim Jin-gu said, "From the second quarter, workforce restructuring will begin, and due to one-time labor cost increases and pre-marketing expenses for new titles, the second-quarter operating profit is expected to decrease by 69.9% to 1.4 billion KRW compared to the previous estimate."