Hyundai Motor Securities on the 10th said Netmarble is expected to further diversify as new console platform titles follow the hit success of the new release "Vampire." It maintained a Buy rating, a target price of 85,000 won, and its top pick status among game stocks. Netmarble's previous closing price is 59,000 won.
Hyundai Motor Securities projected Netmarble's third-quarter results at 695.1 billion won in revenue and 80.3 billion won in operating profit, saying they will largely match the consensus (market forecast).
Kim Hyun-yong, an analyst at Hyundai Motor Securities, said, "Revenue will decline slightly quarter over quarter, but the new title Vampire will offset the stabilization in Seven Knights Rebirth and RF Online Next, defending revenue."
Labor costs were expected to remain stable, but quarter-over-quarter profit decline was seen as inevitable due to increased marketing expenses with the launch of the new title.
Attention is expected to focus on the prolonged success of the in-house intellectual property (IP) title Vampire, released on Aug. 26. Kim noted, "Vampire ranked No. 1 in September revenue, achieving a hit," and analyzed, "If it stays within the top three over the long term, it could contribute around 400 billion won in annual revenue."
In particular, because it is an in-house IP, there is no need to pay royalties, and Vampire alone is expected to improve the companywide operating margin by about 2.5 percentage points (p).
Netmarble is set to release new console platform titles, including "Solo Leveling: Arise Overdrive" on Nov. 17 and "The Seven Deadly Sins: Origin" on Jan. 28.
Kim cited Netmarble's key investment points as follows: ▲ the share of in-house IP revenue has surpassed 20%, structurally lifting margins ▲ a dense lineup with new releases roughly every two months ▲ smooth diversification into the console platform.