Daishin Securities Co. said on the 1st that DoubleU Games is expected to see active mergers and acquisitions (M&A) and revenue growth at its subsidiaries. It initiated coverage with a target price of 70,000 won and a "buy" rating. The previous session's closing price of DoubleU Games was 52,700 won.
Daishin Securities Co. estimated that DoubleU Games will post revenue of 816.1 billion won and operating profit of 275.7 billion won this year. Those figures are up 14.7% and 21.9%, respectively, from a year earlier.
Researcher Lee Ji-eun at Daishin Securities Co. said, "DoubleU Games has been aggressively pursuing M&A since 2023, and from next year we expect a turnaround to profit on the back of revenue growth at subsidiaries," adding, "In 2026, based on 750 billion won in net cash, it plans to carry out additional M&A."
The researcher also said, "DoubleU Games is actively buying back its own shares, so we expect the proportion of treasury shares to be about 10% at the end of this year." If the amendment to the Commercial Act mandating the retirement of treasury shares passes, shareholder returns through treasury share retirement are expected to be strengthened.
According to Daishin Securities Co., DoubleU Games is expanding direct-to-consumer (DTC) sales to lower fees and improve profitability. The DTC share at DoubleU Games is expected to rise from 17.6% in the third quarter of this year to 28% by the end of next year.
The researcher said, "DoubleU Games is undervalued in that it does not reach the lower bound of its share price at the time when it acquired the game developer 'DoubleDown Interactive,'" adding, "With subsidiary growth and strengthened shareholder return policies, there is a strong chance the corporation's value will normalize next year."