[Click eStock] "Maintain NCSoft Target Price... Need to Consider Complex Variables"

Kiwoom Securities maintained NCSoft's target stock price at 260,000 KRW and an Outperform investment rating. The target price was calculated by applying a price-to-earnings ratio (PER) of 25 times and an annual discount rate of 10% to the 2025 controlling shareholder equity of 251.4 billion KRW. The target multiple was raised from the previous 22.5 times to 25 times to reflect the valuation of potential new titles not yet included in estimates.

Next year's revenues for major mobile games Lineage M, Lineage 2M, and Lineage W are projected at 488.1 billion KRW, 178.5 billion KRW, and 209.5 billion KRW respectively, with year-over-year growth rates of -3.5%, -5.4%, and -15.9%. Journey of Monark is assumed to launch in December this year, with estimated daily average revenue of 500 million KRW for that quarter, 200 million KRW daily average revenue in 2025, and total revenue of 67.4 billion KRW. Aion 2 is estimated to have an initial quarterly daily average revenue of 1.3 billion KRW in Q3 next year, an annual daily average revenue of 1.1 billion KRW, and total revenue of 201.3 billion KRW. Although TL faces potential risks due to recent user traffic level downs, considering its weekly global sales ranking within the top 5 on Steam and higher-than-expected ARPU (average revenue per user) effects, the estimates were adjusted to total revenue of 127.3 billion KRW and net revenue of 56.4 billion KRW for next year, including domestic sales.

Operating loss for Q3 this year was 14.3 billion KRW, falling short of the company's estimates due to increased marketing expenses such as for Ho-yeon, and an operating loss of 45.8 billion KRW is expected for Q4. This was mainly due to a one-time severance payment estimated at 67 billion KRW related to voluntary retirement, calculated in detail as 22 million KRW per person based on the 2023 average annual salary of 110 million KRW multiplied by 25 months, applied to 300 employees.