[Click eStock] "DoubleU Games, SuperNation Growth Drives Performance... Target Price Maintained"

Focus on SuperNation's Growth
Undervaluation Relief Factors Include iGaming and M&A Expectations
Significant Dividend Increase and Share Buyback Plans Are Positive Factors

On the 30th, Kiwoom Securities analyzed that the growth of SuperNation will have a significant impact on the future performance of DoubleU Games. They maintained a 'Buy' investment rating and a target price of 78,000 KRW. The previous closing price of DoubleU Games was 49,450 KRW.

Researchers Kim Hak-jun and Jo Jae-won from Kiwoom Securities stated, "Despite a high profit growth rate compared to the previous year, the current valuation is low due to the slowdown in the social casino market," adding, "In the upcoming Q3 earnings, the growth of iGaming, year-end dividend attractiveness, treasury stock buyback issues, and securing new growth engines through mergers and acquisitions (M&A) will be key factors." They analyzed that if these elements are reflected, the undervaluation factors will be resolved, positively influencing the stock price.

In Q2 earnings, DoubleU Games recorded an increase in revenue from DoubleDown Casino, but revenues from DoubleU Casino and SuperNation fell short of expectations. Researchers Kim Hak-jun and Jo Jae-won said, "Although Q3 earnings forecasts will be affected by the decline in exchange rates, sales are expected to increase after the summer vacation season," adding, "The growth trend of SuperNation will be an important variable." The expected Q3 revenue is 165.5 billion KRW, with an operating profit of 66 billion KRW.

Ultimately, the key factor is whether SuperNation grows. Recently, DoubleDown's marketing specialists have been strengthening SuperNation's marketing, and aggressive growth is expected in the second half of the year. In particular, the sales conversion rate from marketing investments is analyzed to be high.

Meanwhile, DoubleU Games is strengthening its shareholder return policy. The company is expected to sharply increase the dividend per share (DPS) from 1,000 KRW in 2023 to 1,580 KRW in 2024, including policies for treasury stock repurchase and cancellation. It is estimated that the funds used for shareholder returns will reach 80 to 100 billion KRW in 2025. If treasury stocks are not used as M&A funds by the end of the year, there is also a plan to cancel half of the held treasury stocks.