Kyobo Securities maintained its "buy" rating on NCSoft on May 14 and raised its target price from 340,000 won to 375,000 won.
Analyst Kim Dong-woo noted that NCSoft's first-quarter revenue reached 557.4 billion won, with an operating profit of 113.3 billion won, exceeding market expectations. He attributed this success to the strong performance of Aion 2 and Lineage Classic.
Aion 2 generated 136.8 billion won in revenue, reflecting some carryover from the previous quarter and robust traffic. Lineage Classic, which launched in February, recorded 108.8 billion won in operating revenue, although some sales were deferred to the second quarter, resulting in an accounting revenue of 83.5 billion won.
In the mobile MMORPG sector, Lineage M saw a 7.9% increase in revenue compared to the previous quarter, maintaining a solid trend. However, declines in revenue from Lineage W and Lineage 2M led to total mobile MMO revenue of 182.8 billion won. The casual gaming segment, boosted by contributions from Springcoms and Lihuhu, totaled 35.5 billion won.
Kim stated, "NC has successfully continued the success of Aion 2 and Lineage Classic within the MMORPG genre, which retains its originality. The global version of Aion 2 is also scheduled for release in the third quarter."
He added that NC is diversifying its portfolio through the acquisition of Lihuhu, Springcoms, and JustPlay, moving away from a structure that previously saw significant volatility based on a few major new releases. Notably, JustPlay has established differentiated competitiveness in casual ad tech, leveraging first-party data for user acquisition marketing.
Kyobo Securities projects NCSoft's revenue for the year to reach 2.48 trillion won, with an operating profit of 494.8 billion won. The increase in the target price reflects upward revisions in revenue estimates for Lineage Classic and Aion 2, as well as a decrease in payment commission rates, leading to an 11.8% increase in the estimated net profit for the year.
* This article has been translated by AI.
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