Kakao Games (photo=Kakao Games)

 

[Alpha Biz= Reporter Kim Minyoung] On the 10th, Hyundai Motor Securities maintained its "buy" investment rating for Kakao Games but lowered its target price from 30,000 KRW to 24,000 KRW.

Hyundai Motor Securities stated, "Kakao Games' second-quarter revenue is expected to be 243.8 billion KRW (a 10.1% decrease year-on-year) and its operating profit is expected to be 9.4 billion KRW (a 64.5% decrease), which is 45% below the market expectation for operating profit, resulting in an earnings shock." They attributed the revenue decline mainly to the stabilization and lack of new releases in mobile games like Odin, while the significant drop in profit was influenced by the launch of new games like Gran Saga: Raising and EverSoul in Japan, as well as new product releases by KakaoVX.

The projected revenue and operating profit for Kakao Games this year were revised down from 1.1058 trillion KRW and 101 billion KRW to 1.0186 trillion KRW and 63.1 billion KRW, representing decreases of 8% and 37%, respectively. Analyst Kim noted, "We have factored the delayed revenue from significant new game releases into our performance expectations. We can discuss a trend of upward movement when large-scale new PC/console game releases diversify the platform and operating profits recover next year."

 

 

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