[Click eStock] "Netmarble, Now Is the Time to Buy... Target Price Raised to 69,000 Won"

On January 13, Meritz Securities upgraded its investment rating for game developer Netmarble to "Buy," noting that major anticipated titles for the first half of the year, including "The Seven Deadly Sins: Origin" launching this month and "MonGil," are concentrated in this period. The target price was also raised to 69,000 won.

Lee Hyojin, a researcher at Meritz Securities, explained the reason for the upgrade in the report "Netmarble - Confirmed Bottom. Now Is the Time to Buy," released the same day, stating, "Given the company’s diverse portfolio of genres, there is no reason to apply a lower valuation."

First, Lee noted, "Netmarble’s sales and operating profit for the fourth quarter of last year are expected to meet expectations," adding, "Reflecting financial gains from the year-end share price increase of HYBE, we anticipate a rare fourth-quarter net profit in the black."

Lee further stated, "We are raising our fair value estimate for Netmarble from 60,000 won to 69,000 won and upgrading our investment opinion to Buy," explaining, "The new fair value is based on applying a price-to-earnings ratio (PER) of 17 times-used for NCSoft-to the 2026 earnings per share (EPS)." Regarding the projected negative growth in 2027, Lee clarified, "This is because new titles have not been factored in," and added, "The estimate will be revised upward after the release schedule is announced."

In particular, Lee emphasized, "The most important investment point for domestic game companies is new releases," highlighting, "Starting with 'The Seven Deadly Sins: Origin' on January 28, major anticipated titles for the first half of the year, including 'MonGil,' are concentrated in this period. Although only results from Korea and Japan have been considered, if global performance is confirmed, a valuation rerating is possible."

Additionally, Lee pointed out that daily revenue for NCSoft’s competing game "Aion 2" has stabilized at the 1 billion won level, diagnosing, "This means that the impact on existing games has now subsided."

Accordingly, Lee assessed, "The stock price has declined to the level seen in April of the previous year, and through asset securitization and business profits, net debt has decreased to the mid-600 billion won range. Considering that HYBE shares worth about 1 trillion won remain and the sale of G-Tower is underway, financial burdens are also in the final stage." Lee added, "To pursue the global performance expected from Pearl Abyss, new titles are necessary, and in the first half of the year, Netmarble is the only company that meets this condition."