NH Investment & Securities maintained its "Buy" rating on NCSOFT, reflecting expectations for the success of new titles and the cancellation of treasury shares, and raised its target price to 330,000 won from 300,000 won. As of the previous trading day, NCSOFT closed at 237,500 won.
NH Investment & Securities estimated NCSOFT's operating profit this year at 410.1 billion won. That would be up 2,449% from a year earlier. It projected first-quarter operating profit at 117.7 billion won, up 2,155% from the same period a year earlier.
Ahn Jae-min, an analyst at NH Investment & Securities, said, "Following AION2, released in Nov. last year, Lineage Classic, unveiled on Feb. 7, is showing solid results," and noted, "The possibility of canceling 9.9% of treasury shares held, in line with the passage of the Commercial Act amendment, is also positive."
This year's revenue from Lineage Classic was forecast at 189.3 billion won. Lineage Classic is a spin-off game that recreates the early version of NCSOFT's PC game "Lineage 1," and primarily targets users in their 40s and 50s who enjoyed Lineage in the early 2000s.
Ahn said, "Some users criticized the addition of probability-based items to the 29,700 won monthly subscription model, but game traffic has been rising quickly since launch," and analyzed, "Early daily revenue will come in around 4 billion won."
It also cited fee savings from introducing an in-house payment system for the mobile and PC versions as a driver of improved results. Ahn said, "Since Nov., we have introduced in-house payments to the PC versions of existing mobile games, reducing our fee burden," and predicted, "Combined with these expense savings, first-quarter results will significantly beat market expectations."