Kiwoom Securities said on the 24th that DoubleU Games is expected to show a changed approach in its mergers and acquisitions (M&A) strategy, and judged that it is time for a valuation re-rating, as its ability to secure growth through M&A has been confirmed. It maintained a Buy rating and a target price of 78,000 won. DoubleU Games' previous closing price was 55,000 won.
Kiwoom Securities said DoubleU Games has so far pursued mainly small M&A deals based on the stable cash cow it has secured in social casino.
Kim Hak-jun, an analyst at Kiwoom Securities, said, "As understanding of the market expands, M&A will shift to an aggressive form within the next five years," and noted, "With the low-growth trend in social casino continuing, the plan is to secure growth through post-merger integration (PMI) of acquired companies, and in fact such results are appearing this year."
DoubleU Games is expanding in size by acquiring casino-related companies such as SuperNation, Paxxi Game, and Whow, as well as casual game firms, and pursuing improvements through in-house integration of the businesses and aggressive marketing.
Kim said, "Although the share of total revenue is not yet very large, the significant expansion in top-line growth has served as proof of DoubleU Games' M&A capabilities."
In particular, DoubleU Games has secured operational and marketing know-how in new growth businesses such as iGaming and casual, and Kiwoom Securities judged that this could be an asset that allows the company to shift its M&A direction aggressively going forward.
Kim said, "Cash of about 750 billion won and more than 250 billion won in annual cash inflows will make aggressive M&A possible."
Kiwoom Securities analyzed that if DoubleU Games produces a successful mega-deal case, it will be an opportunity for the company's valuation—long undervalued—to rise along with securing growth.
Kiwoom Securities projected that DoubleU Games' aggressive marketing will continue for the time being. It forecast marketing expense at 16%–17% of next year's revenue.
Meanwhile, for 2026 consolidation results, it forecast revenue of 817.3 billion won and operating profit of 257 billion won. Those are increases of 14% and 12.1%, respectively, from a year earlier.