Kiwoom Securities analyzed on the 17th that the continued downward stabilization of major game sales is affecting the performance of Kakao Games. It adjusted its target stock price down from 18,000 won to 15,000 won while maintaining an investment opinion of 'outperform.' The closing price of Kakao Games on the previous trading day was 13,120 won.
Kiwoom Securities projected that in the first quarter of this year, Kakao Games will record sales of 133.1 billion won and an operating loss of 6.5 billion won.
Kim Jin-gu, a researcher at Kiwoom Securities, noted, "The continued downward stabilization of sales levels for major games excluding Odin is putting pressure on the performance," adding, "Given that a significant level of efficient processes for key expenses such as personnel and marketing costs has already been achieved, meaningful performance improvement through cost efficiency alone is difficult."
As a result of reflecting the 10 billion won in discontinued business losses under Kakao VX's discontinued business classification, the sales and equity of Kakao Games have been adjusted downward by 14.8% and 15.5%, respectively. Researcher Kim said, "Current performance estimation assumptions also reflect the success potential of 'Guardians Order' and 'Project Q' in the second half, so there remains room for fluctuation in the second-half results depending on the outcomes of these projects."
He further stated, "Since the contribution from new releases this year is assumed to be centered around Project Q, the performance contribution based on equity will likely be centered around LIONHEART STUDIO."
He added, "I did not reflect estimates for 'Chrono Odyssey,' which is scheduled for release in the fourth quarter of this year, but if significant achievements related to it are added, we could secure a certain level of buffer."