IBK Securities on the 1st said DoubleU Games has put in place an automated workflow system for the entire game development process through its game-specialist subsidiary. It kept its investment opinion at "buy" (BUY) and raised its target price 42.8% to 100,000 won from 70,000 won. The previous session's closing price was 68,400 won.
IBK Securities analyzed that DoubleU Games succeeded in internalizing an automated workflow system for the pre-development process through the "AI Lab" built within its casual game subsidiary Paxie Games.
Lee Seung-hoon, an analyst at IBK Securities, said, "From planning to graphic asset creation, balancing tests, and final global launch, the entire process can be completed 'in three weeks for a single developer,' establishing a super-efficient AI-based development process," adding, "It has laid the foundation to expand a high-output, hyper-casual lineup without risk."
DoubleU Games posted consolidated first-quarter revenue of 205 billion won and operating profit of 68.5 billion won. This is the first time since the company's founding that quarterly revenue has exceeded 200 billion won.
The analyst said the casual game business turned profitable for the first time ever, boosting its contribution to earnings as a new growth engine.
The analyst said, "On the expense side, even though we spent aggressively on marketing to acquire global users for new casual games, the share of direct-to-consumer (DTC) payments in social casino surged to 38.7%, driving platform app market fee expenditures down sharply to 36.5 billion won," adding, "Thanks to this fee-savings effect, we fully offset the increase in marketing costs and maintained a high operating profit margin (OPM) of 33.4%."
The analyst added, "We also view positively the push to acquire the remaining equity of Nasdaq-listed subsidiary DoubleDown Interactive to complete full ownership within the year."