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[Alpha Biz=(Chicago) Reporter Paul Lee] Samsung Securities lowered its target price from 470,000 won to 370,000 won on the 14th, saying NCsoft's sales of existing mobile games continue to decline. The investment opinion remained 'buy'.
"NCsoft's sales are expected to fall 5.1% in the second-quarter as sales of Lineage W and Lineage 2M continue to decline due to competition in the domestic MMORPG (Multi-Access Role Playing Game) market," Samsung Securities said. "Due to increased pre-marketing related to TL and the reduction of one-off costs in the first quarter, the second-quarter operating profit will fall 55% to KRW 36.6 billion, 20.9% below the consensus."
"Although NCsoft's investment sentiment can be revived due to TL's global test response, the possibility of delaying the release of the next products is increasing afterwards," Samsung Securities said. "The stock price needs to be adjusted."
In a domestic beta test conducted in May, TL received negative user responses and expectations for box office success fell. The company will revise the game to reflect requests from local users ahead of Amazon's global test in the third quarter.
However, even after the release of TL, a number of new games such as Project G, Aion 2, and LLL will be released, but the release of major games such as Aion 2, which is expected to contribute greatly to real sales, is likely to be delayed to 2025.
Samsung Securities lowered TL's total sales estimate for the first four quarters from 600 billion won to 500 billion won, and lowered its operating profit estimate for this year by 11.6%. The target stock price also fell 21.3% to 370,000 won from the previous 470,000 won.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
