"Com2uS's New Game 'Zeus' Is a Smash Hit"... Target Price Raised 40%

[Financial News] KB Securities raised its investment rating on Com2uS to 'Buy,' saying the success of its new game would significantly improve the company's earnings power. It also raised its target price by 40%, from KRW 30,000 to KRW 42,000.
On the 18th, KB Securities analyst Jieun Lee said, "Despite higher marketing expenses and commissions following the launch of the new game, significant earnings improvement is expected on the back of top-line growth."
Lee forecast that Com2uS's third-quarter revenue would rise 33% year on year to KRW 213.7 billion, while operating profit would reach KRW 17.5 billion and the company would return to profitability, significantly exceeding market expectations, following the success of "Zeus: God of Pride," which was released on the 26th of last month.
Lee said, "We estimate that daily revenue has remained at approximately KRW 2 billion as of about 20 days after the game's launch." She added, "Although the genre raises concerns about a sharp drop in revenue after launch, we believe traffic has remained solid as ongoing developer livestreams allow user feedback to be reflected quickly."
She added, "Because monetization is not overly aggressive and the game is maintaining its success without excessive marketing spending, we believe a stable revenue stream will be possible."
However, KB Securities attributed the limited share-price gains despite the recent success of the new game to doubts about the sustainability of MMORPG hits, uncertainty over whether the success of future releases can be replicated, and the still-insignificant early indicators for next year's new games.
Lee said, "The first concern is expected to ease gradually as stable traffic and revenue trends are confirmed," but assessed that "the possibility of replicating the success of future releases will need to be verified going forward."
Next year, Com2uS plans to release new games based on well-known intellectual properties (IP), including Gachiakuta, TOUGEN ANKI, and I Left My A-Rank Party to Help My Former Students Reach the Dungeon Depths.
Lee said, "As many of these games primarily target Japan, it will be important to monitor anticipation among Japanese users and whether related indicators improve." She added, "If the hit potential of the upcoming titles becomes clearer, further upward revisions to earnings estimates could be accompanied by greater momentum in the share price."
 
[email protected] Joo Won-gyu Reporter