[Click eStock] "Netmarble, Record 2Q Profit... V-Shaped Earnings Recovery Driven by New Releases"

Hi Investment & Securities forecasted on the 1st that game company Netmarble will show a 'V'-shaped sales growth trend fueled by the popularity of its new game.

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Yoon Ye-ji, an analyst at Hi Investment & Securities, stated in a report on the same day, "Netmarble is expected to record the largest operating profit ever in the second quarter of this year." The sales and operating profit forecasts for Netmarble's second quarter released by Hi Investment & Securities are 847.4 billion KRW and 98.5 billion KRW, respectively. This represents a 41% increase in sales compared to the same period last year and a turnaround to profitability in operating profit. Compared to the previous quarter, sales and operating profit increased by 41% and 2562%, respectively.

Analyst Yoon analyzed, "While sales from existing older games are expected to stabilize downward, the new release ' (Nahongrep)' will drive growth by recording sales of 216 billion KRW just two months after its launch." Nahongrep achieved the remarkable feat of entering the top 10 mobile sales rankings in 27 countries within a day of its release.

He added, "The commission fees that have been pressuring Netmarble's profitability are structurally decreasing," and predicted, "Operating margins will improve due to the decline in commission rates." He also noted, "Following last year's workforce efficiency measures, the reduction in labor costs will also be significant."

However, he stated, "We decided to lower the target stock price to 75,000 KRW by changing the valuation method from the previous sum-of-the-parts (SOTP) approach to the price-to-earnings ratio (PER) method." The current stock price is around 55,000 KRW, and the 'Buy' opinion is maintained.