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Kakao Games (photo=Kakao Games) |
[Alpha Biz= Reporter Kim Jisun] SK Securities lowered its target price for Kakao Games on July 16, stating that the second-quarter operating profit is expected to fall below market expectations. The target price was reduced from 23,000 won to 21,000 won while maintaining a 'Neutral' investment rating.
According to SK Securities, Kakao Games is anticipated to report second-quarter revenue of 236.8 billion won, a 3.9% decrease year-on-year, and an operating profit of 7.6 billion won, down by 37.9%. The forecast suggests that the operating profit will likely be below the market consensus of 16 billion won.
The brokerage attributed the decline in game revenue to a 12.4% decrease to 155 billion won, noting that expansion effects from 'Eversoul' and 'ArchAge War' did not fully offset revenue declines from 'Odin' and existing titles.
SK Securities commented that there is a lack of significant contributions to earnings from new titles this year. They also adjusted their target price downwards due to declines in revenue from existing titles and changes in the release schedule for new titles.
Regarding recent developments, SK Securities mentioned reports indicating that Kakao Games is considering selling its stake in Kakao VX, where it holds a 65.19% stake. VX engages in operations such as screen golf course management, golf equipment sales, and golf course reservation services. The potential sale is seen as a move to improve profitability amid recent demand slowdowns and to focus on core business strengths.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
