Hana Securities evaluated that DoubleU Games has secured new growth engines through mergers and acquisitions (M&A) of game companies including Supernation and Paxi Games on the 8th. The investment opinion is "buy," and the target price is maintained at 64,000 won. The closing price of DoubleU Games on the previous trading day was 51,800 won.
Hana Securities forecasted DoubleU Games' consolidated revenue for the fourth quarter to be 167.9 billion won, a 9.4% increase compared to the same period last year. Operating profit is projected to rise 9.2% year-on-year to 68.6 billion won, which slightly exceeds both the revenue and operating profit consensus (market estimates).
Lee Junho, a researcher at Hana Securities, noted, "DoubleU Games is a representative corporation that benefits from a strong dollar," stating that "100% of its sales are generated in North America and Europe, while most of its fixed costs are paid in Korean won."
This researcher projected that DoubleU Games' operating revenue would reach 721.7 billion won this year, an 11.8% increase compared to the same period last year. This year's operating profit is expected to record 265.5 billion won, a 3.4% increase year on year. This researcher stated, "With the acquisition of Paxi Games added to the growth of Supernation, I expect to achieve double-digit sales growth for the second consecutive year."
DoubleU Games is expected to complete the acquisition of Paxi Games, a Turkish gaming company, in February this year. Paxi Games is a gaming company with a lineup of three games, and its revenue contribution is projected to be 40.6 billion won this year. It is also estimated to contribute to operating profit starting in 2026.
This researcher said, "Through this M&A, DoubleU Games has secured new growth engines in Supernation and Paxi Games alongside its existing stable cash generation from social casinos," and added, "The cash used for this M&A is about 33 billion won, so there is still plenty of cash capacity for additional M&A and scale-up."
They added, "The existing investment points of expanding the scale through additional M&A and returning profits to shareholders remain valid," and noted, "Considering the current situation combined with a strong dollar, the valuation attractiveness is deemed high."