Eugene Investment & Securities said on the 14th that expectations are high for earnings improvement at NC, citing the success of Lineage Classic and the global launch of AION2 slated for the third quarter. It kept its investment opinion at "Buy" and raised its target price to 380,000 won from 280,000 won. NC's previous trading day closing price was 263,000 won.
NC posted revenue of 557.4 billion won and operating profit of 113.3 billion won in the first quarter. Revenue rose 55% from a year earlier, and operating profit jumped 2,070%.
Jung Ui-hoon, an analyst at Eugene Investment & Securities, said it was "the effect of the success of Lineage Classic and steady sales of AION2, plus the consolidation of Vietnam's 'Lihuhu' and domestic studio 'Springcomes' (reflecting 35.5 billion won in mobile casual revenue)."
PC revenue was 318.4 billion won, the highest quarterly revenue ever. The first-quarter accounting revenue for Lineage Classic, released on Feb. 2, was 83.5 billion won, and its cumulative operating revenue over 90 days after launch was 192.4 billion won, far exceeding market expectations. As of the April update, it set a new record for highest daily revenue, and even three months after release, its market share remains solid. AION2 revenue was 136.8 billion won, up 77% from the previous quarter.
Mobile revenue was 182.8 billion won, and despite the launch of Lineage Classic, mobile Lineage M maintained solid revenue of 112.8 billion won. On top of that, the full-quarter reflection of results from Lihuhu and Springcomes has begun, and from the second quarter, with Germany's JustPlay being included, the mobile casual institutional sector's revenue scale is expected to expand meaningfully.
On the expense side, personnel costs, reflecting incentives and stock-based compensation tied to Lineage Classic's performance, rose 30% from a year earlier to 244 billion won. Marketing expense was 37.8 billion won, with 21.2 billion won in new marketing expense for the mobile casual institutional sector reflected.
Jung said, "This target price hike reflects Lineage Classic's results exceeding expectations," adding, "Given AION2's existing performance, the global launch of AION2 slated for the third quarter can also be expected to deliver meaningful revenue."
In addition, the Southeast Asia launch of Lineage W set for the 27th and the entry of Lineage M, 2M, and Aion Mobile into China are raising expectations for a spin-off and regional expansion strategy of legacy intellectual property (IP).
Jung said, "Global tests for the three titles—Cinder City, Time Takers, and Breakers—have also entered a full-fledged phase," adding, "By year-end, visibility is expected for the anticipated title 'Horizon Steel Frontier.'"