Samsung Securities on the 13th said NCSOFT has secured a new growth engine, raising expectations for a rebound in its valuation. It maintained a Buy rating and lifted the target price to 280,000 won from 260,000 won. NCSOFT's previous day's closing price was 212,000 won.
NCSOFT on the 11th decided to acquire 70% equity in Germany's JustPlay for 301.6 billion won. JustPlay operates a reward-based mobile casual game platform. Last year's revenue was 248 billion won, and net profit was 22.7 billion won.
Oh Dong-hwan, an analyst at Samsung Securities, said, "The plan is to distribute the games of ReHooHoo and SpringComms, acquired last year, through JustPlay to create synergy in the casual game market," and noted, "Given that the three companies' combined revenue last year alone was about 400 billion won, they are set to drive NCSOFT's inorganic growth this year."
Lineage Classic is also continuing its run of success. Released on the 11th of last month, Lineage Classic reached 40 billion won in revenue within two weeks of launch. It also climbed to No. 2 in PC café traffic share.
Oh said, "Even factoring in a stabilization of revenue at a lower level, this year's revenue is expected to exceed 200 billion won," and explained, "The company plans to continue releasing spin-off games from legacy intellectual property (IP) even after Lineage Classic."
NCSOFT set a goal of achieving 5 trillion won in revenue and a 15% return on equity (ROE) by 2030 through expanding existing IP, launching new IP games, and entering the casual game market.
Oh said, "Considering the stable revenue from legacy IP games and inorganic growth through mergers and acquisitions (M&A), it is judged not to be an unattainable target."