SK Securities said on the 16th that NC is expected to see quarterly revenue growth this year on the back of new releases and genre diversification. It maintained a Buy rating and raised the target price to 360,000 won from 300,000 won. NC's previous trading day closing price was 245,000 won.
Nam Hyo-ji, an analyst at SK Securities, said, "In the first quarter of this year, performance of 'AION2' and 'Lineage Classic' will be reflected on PC, and on mobile, results from the casual game companies LeHoHoo and Springcomes, acquired last year, will be reflected, so total revenue will grow quarter over quarter."
SK Securities projected NC's first-quarter revenue at 494.4 billion won and operating profit at 87.6 billion won. Revenue rose 37.2% from a year earlier, and operating profit jumped 1,578.1%. Net profit attributable to owners of the parent was estimated at 81.9 billion won, up 116.8% year over year.
It expected operating expenses to be similar to the previous quarter due to higher employee incentives and increased marketing costs for user acquisition (UA) for mobile casual games.
It analyzed that NC will post solid earnings growth, with revenue increasing each quarter this year. In the second quarter, results from the German game company "JustPlay," which is slated for acquisition, are expected to be reflected, and in the third quarter, a publishing title (in charge of distribution) is set for release. In the fourth quarter, AION2's global launch is scheduled. Factoring in the global launch, this year's revenue from AION2 was projected at 400.3 billion won.
Nam said, "In particular, AION2 has higher user retention after launch compared with past massively multiplayer online role-playing games (MMORPGs)," adding, "Revenue volatility from new titles is also moderate, making it a definite key revenue driver this year."
It expected the mobile casual genre, which starts contributing to results this year, to generate a combined 551.5 billion won in annual revenue. However, it noted that user marketing is intensively planned for this year, with clear earnings contributions to begin next year.
Nam added, "NC has secured earnings upside through new titles and genre diversification, on top of stable performance from existing titles."