"Not Just AION 2's Global Success—A String of New Releases Next Year... NCSoft's Target Price Raised"

[Financial News] Hyundai Motor Securities maintained its Buy rating on NCSoft, saying earnings growth will continue on the global success of AION 2 and the release of follow-up titles. It also raised the target price from KRW 350,000 to KRW 380,000.
On the 2nd, Hyundai Motor Securities analyst Choi Seung-ho said, "AION 2 recorded 170,000 concurrent users after its early access launch on the 30th of last month," adding, "That figure is far above Throne and Liberty's 60,000, making its initial success virtually certain."
He also viewed user feedback positively. Choi explained, "The Steam user rating is 73 points, higher than Throne and Liberty's initial score of 54," adding, "Given that a significant portion of the negative reviews stemmed from the game's delayed release, the rating is likely to settle above 80, suggesting stronger retention than Throne and Liberty."
However, he noted that user retention after the official launch still needs to be monitored. "Stock volatility is expected to be extreme depending on the peak number of concurrent Steam users at the official launch on the 5th and the subsequent natural decline," he said. "User retention at the time of the November 5 release of World of Warcraft: Forever will be crucial to future revenue estimates."
He also cited upcoming releases after AION 2 as an investment rationale. Choi emphasized, "We maintain our view that NCSoft should be bought even if AION 2 fails globally," adding, "When AION 2 launched domestically, the major releases expected over the following year were limited to global versions, but now 10 games are awaiting release through next year."
In particular, he highlighted Astrae Oratio, Cinder City, and Horizon, all scheduled for release next year. Their combined revenue next year is projected at KRW 510.3 billion. Reflecting this, NCSoft's revenue next year is forecast at approximately KRW 3.3 trillion, while operating profit is expected to rise 12% year on year to KRW 662.4 billion.
The target price was calculated by applying a target price-to-earnings ratio of 16 times to the estimated earnings per share of KRW 23,487 for this year. Choi judged, "The current P/E ratio is around nine times, placing NCSoft's valuation at the very bottom even among global software companies," adding, "This is a buying opportunity in which the stock's upside can be justified by EPS growth without relying on a valuation re-rating."
[email protected] Joo Won-gyu Reporter