[Click eStock] "Shift Up Removes Uncertainty with China License Issuance"

Sangsangin Securities analyzed on the 28th that the uncertainty regarding Shift Up has been removed with the issuance of the Chinese game license, and that the Chinese performance will determine the future valuation.

Choi Seung-ho, a researcher at Sangsangin Securities, stated in a report on the same day, “The main strengths are global-level development capabilities, excellent financial structure and personnel, and a professional focus solely on the solid theme of subculture,” adding, “Shift Up is positive as it is a company with technological capabilities for all platforms based on the solid characteristic of subculture.”

He forecasted Shift Up’s performance for next year with sales of 355.7 billion KRW and operating profit of 266.3 billion KRW. These figures assume the release of Nike in China in the first quarter and Stella PC in the second quarter next year. He estimated net sales of 150.3 billion KRW for China Nike and 43.8 billion KRW for Stella Blade.

Researcher Choi explained, “Since the company’s workforce is small (about 300 people), it is not possible to release a flood of new titles like large companies,” and “Pure new titles in sight are the 2027 project Witches (estimated mobile open world) and possibly Stella Blade 2 (our estimate).”

He added, “However, in line with this, labor costs are low and the cash cow ‘Nike’ has stable sales due to the characteristics of top-tier subculture games, making sales more stable than MMORPG developers whose sales sharply decline quarterly,” and “If China Nike had not been released in 2025, it would simply be a sell from a valuation perspective, but the issuance of the Chinese game license for Nike on the 25th removed uncertainty and increased the explanatory power of performance, which is positive.”

He continued, “Our estimate for 2025 sales has China Nike accounting for 42%, and we place more weight on the possibility of success,” adding, “Of course, the appropriate valuation is expected to fluctuate depending on actual Chinese performance.”