[Click e-Stock] "Devsisters Faces Weak Short-Term Results... Target Price Lowered"

Target Price Lowered from 64,000 Won to 47,000 Won

On January 23, Shinhan Investment Corp. lowered its target price for Devsisters from 64,000 won to 47,000 won, citing expectations of weak short-term performance. The investment opinion was maintained as 'Buy'.

Kang Seokoh, a researcher at Shinhan Investment Corp., stated, "We have lowered our earnings estimates due to weaker-than-expected sales rebounds for existing titles, increased marketing expenses to boost intellectual property (IP) recognition, and workforce expansion for new projects." He added, "However, given the nature of the industry, the stock price tends to reflect the acquisition of new users and pipeline developments in advance, rather than short-term results. Therefore, it is important to pay attention to the effects of the fifth-anniversary update and expectations for new releases in March." He further commented, "In 2026, the value of Devsisters' IP will be re-evaluated as the company expands its IP business overseas, not only through new games but also through merchandise and exhibitions."

Devsisters' fourth-quarter results last year are expected to fall short of market expectations. Researcher Kang analyzed, "The company is projected to post an operating loss of 9.6 billion won in the fourth quarter, missing the consensus (the average of securities firms' forecasts) of 5.9 billion won in operating profit." He explained, "Despite marketing efforts during the peak season, existing titles failed to rebound in sales, and the workforce increased in the second half compared to the first half due to hiring for new projects."

Expectations for new releases in March are gradually being reflected in the share price. The launch of 'Oven Smash' is anticipated in March, and new Cookie Run IP titles such as 'Project CC' and 'Project N' are also expected to be released within the year. Researcher Kang predicted, "Short-term share price already reflects weak results and delays in new releases, but the stock will rebound as the fifth-anniversary update for 'Cookie Run: Kingdom' leads to higher sales rankings and expectations for new releases in March are factored in." On January 14, the fifth-anniversary update for Cookie Run: Kingdom led to a rebound in rankings, especially in the United States and Korea. Kang added, "Since the company secured a large number of new users in the United States last year, the efficiency of overseas marketing for both existing and new titles is expected to improve going forward." He continued, "With the launch of the new title 'Oven Smash' at the end of March, Devsisters is likely to penetrate the casual battle and shooting game market, which has recently stagnated due to the poor performance of competing titles."