[Click eStock] "Daewon Media, Undervalued Appeal Highlighted Ahead of Switch2 Release"

Shinhan Investment Corp. analyzed on the 12th that Daewon Media's undervaluation appeal will be highlighted ahead of the Nintendo Switch 2 launch. No investment opinion or target price was provided.

Aram Kim, a researcher at Shinhan Investment Corp., said, "Daewon Media is generally a company that has received a price-earnings ratio (PER) of 10 to 15 times, but the current stock price is 8.5 times and 6.5 times for next year and 2026, respectively, compared to estimates." He added, "When the Switch was launched in 2017, the stock price rose about twice from the low point due to performance expectations." He continued, "We expect the momentum from the unveiling and launch of the Nintendo Switch 2, which will begin around March 2025, to attract attention."

Shinhan Investment Corp. forecasted that Daewon Media's sales and operating profit next year will reach 332.5 billion KRW and 15.8 billion KRW, respectively, representing increases of 27% and 541% compared to the previous year.

Researcher Kim said, "According to the media, the Switch 2 is likely to be released around June next year," adding, "Although sales decline is inevitable this year due to the aging of the Switch, the effect of the Switch 2 launch will be significant next year." He further added, "Considering the pent-up demand and price increases, sales exceeding 140 billion KRW are also quite possible."

He also emphasized that business divisions other than Nintendo are performing well. He stated, "The licensing division, which distributes domestic and international IPs, continues to receive love calls from convenience stores, department stores, and others as the popularity of distributed characters rises." He added, "The TCG division, which distributes cards, has succeeded with KBO (baseball) and Nibel Arena, and the publishing subsidiary Storyjak is expected to reduce its annual deficit from around 2 billion KRW to less than 1 billion KRW next year."