Eugene Investment Securities has raised its target price for Kakao Games from 7,600 won to 12,000 won, an increase of 57.9%, while maintaining a 'Hold' rating. The firm expressed optimism about the company's recovery prospects following the success of the new title 'World of Goblins,' but noted that significant profitability improvements depend on the performance of 'Odin Q: Valkyrie's Call,' set to launch in the first quarter of next year.
Jung Ui-hoon, a researcher at Eugene Investment Securities, stated on November 5, "The third quarter marked a low point, and we are entering a clear improvement phase in performance." He added, "The success of 'World of Goblins' has reaffirmed our ability to launch new titles, and the integration of Metoon and the upcoming release of 'Odin Q' have increased visibility for a return to profitability in the first quarter."
Kakao Games reported third-quarter revenue of 69.1 billion won, a 46% decrease compared to the same period last year, with an operating loss of 26.3 billion won. Revenue fell short of the market consensus of 76.4 billion won, while the operating loss was generally in line with expectations.
However, starting in the fourth quarter, the company anticipates a revenue rebound due to the success of 'World of Goblins' and the integration of Metoon. 'World of Goblins' has achieved the top revenue spot in major app markets since its launch and continues to show strong sales rankings and traffic.
In the first quarter of next year, the highly anticipated 'Odin Q: Valkyrie's Call' is set to launch simultaneously in South Korea, Taiwan, and Japan. Eugene Investment Securities has revised its projections for Kakao Games' revenue to 805 billion won and operating profit to 89 billion won for next year, increasing estimates by 26.8% and 48.3%, respectively.
Jung noted, "The profit contribution from 'World of Goblins' is limited due to its publishing title nature, and the real improvement in profitability hinges on the success of the self-developed title 'Odin Q.'"
Jung Ui-hoon, a researcher at Eugene Investment Securities, stated on November 5, "The third quarter marked a low point, and we are entering a clear improvement phase in performance." He added, "The success of 'World of Goblins' has reaffirmed our ability to launch new titles, and the integration of Metoon and the upcoming release of 'Odin Q' have increased visibility for a return to profitability in the first quarter."
Kakao Games reported third-quarter revenue of 69.1 billion won, a 46% decrease compared to the same period last year, with an operating loss of 26.3 billion won. Revenue fell short of the market consensus of 76.4 billion won, while the operating loss was generally in line with expectations.
However, starting in the fourth quarter, the company anticipates a revenue rebound due to the success of 'World of Goblins' and the integration of Metoon. 'World of Goblins' has achieved the top revenue spot in major app markets since its launch and continues to show strong sales rankings and traffic.
In the first quarter of next year, the highly anticipated 'Odin Q: Valkyrie's Call' is set to launch simultaneously in South Korea, Taiwan, and Japan. Eugene Investment Securities has revised its projections for Kakao Games' revenue to 805 billion won and operating profit to 89 billion won for next year, increasing estimates by 26.8% and 48.3%, respectively.
Jung noted, "The profit contribution from 'World of Goblins' is limited due to its publishing title nature, and the real improvement in profitability hinges on the success of the self-developed title 'Odin Q.'"
* This article has been translated by AI.
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