Samsung Securities analyzed that while there are high expectations for new titles from Netmarble next year, there is a short-term stock price risk due to the listing of its subsidiary, Netmarble Neo. It has raised the target price from the previous 70,000 won to 73,000 won, presenting an investment opinion of 'buy.' The closing price of Netmarble on the previous trading day was 51,400 won.
Samsung Securities projected that Netmarble's revenue will decrease by 7.9% quarter-on-quarter in the fourth quarter of this year, and its operating profit is expected to fall by 75%. This is because the revenue decline of its existing released games, such as 'Solo Leveling' continues, and although 'King Arthur: Legend Rises' was launched last month, its contribution to revenue is expected to be limited due to poor performance.
Oh Dong-hwan, a researcher at Samsung Securities, said, 'The sales decline will significantly diminish the impact of new releases in the second quarter.'
However, the fact that new blockbuster games such as 'Game of Thrones: Kingsroad,' 'The Red,' and 'The Seven Deadly Sins: Origin' are scheduled for release next year is a positive sign. Research Institute Oh noted, 'Especially since Game of Thrones is based on a globally successful blockbuster drama intellectual property (IP), we can expect initial box office results comparable to those of Solo Leveling.' The Seven Deadly Sins: Origin is also being developed as Netmarble's first console AAA-grade game, which is expected to drive sales growth in the second half of the year.
Nonetheless, the short sales lifespan of new titles remains a challenge, as even a number of successful new releases do not lead to significant overall revenue growth. Samsung Securities pointed out the need to prove live capabilities by extending the lifecycle of the eight new titles set to be released next year.
Additionally, the listing of subsidiaries poses a short-term stock price risk. Research Institute Oh noted, 'Reflecting the potential success of next year's new titles, the estimated operating profit for the next year has been raised by 21.2%, and the target price adjusted upwards from 70,000 won to 73,000 won, a 4.3% increase.' However, concerns about the burden of overlapping listings among the currently pursued subsidiaries and potential conflicts of interest due to equity holdings by executives like Kwon Young-sik of Netmarble are expected to arise. Samsung Securities recommended buying from a trading perspective until the new titles are released.