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Source: DoubleU Games |
[Alpha Biz= Paul Lee] On Tuesday, Shinhan Investment Securities raised its target price for DoubleU Games from 70,000 KRW to 74,000 KRW, reflecting a 6% increase, citing growth in earnings and shareholder returns. The firm maintained its "Buy" rating on the stock.
Shinhan Investment highlighted that DoubleU Games' two new business segments—online casinos and casual games—are expected to account for more than 15% of total revenue by 2025. The report noted that online casino revenue has been hitting record highs each month since November, following the launch of marketing campaigns. As revenue grew beyond the break-even point (BEP), the company achieved an EBITDA margin of around 5%.
Regarding DoubleU Games’ December acquisition of casual game developer Paxxi Games, Shinhan Investment stated that the merger process is expected to conclude by the end of March, with the company being fully consolidated in Q2. Even before the acquisition was finalized, Paxxi Games had been setting new monthly revenue records. Shinhan expects revenue growth to accelerate further once marketing investments are injected post-acquisition.
Shinhan Investment also emphasized DoubleU Games’ efforts to improve profitability through its own payment system, which reduces reliance on app store fees, which typically account for 30% of sales. The firm highlighted that PC-based transactions—which have lower fees of less than 10%—accounted for 8–9% of payments in 2024, and this figure is expected to reach double digits this year.
Financially, DoubleU Games is projected to hold 820 billion KRW in cash by the end of 2024 and is expected to generate over 200 billion KRW in net inflows annually, even without additional growth.
The company has increased dividends by 44% year-on-year and plans to expand dividends and share buybacks in alignment with EBITDA growth. Additionally, it intends to pursue at least one or two M&A deals annually and implement a tax-free dividend policy by reducing capital reserves, thus eliminating the 15.4% dividend income tax burden for shareholders.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
