Hyundai Motor Securities lowered the target price of Kakao Games by 27.5% from 80,000 won to 58,000 won on the 10th. 

 

This is because performance growth is uncertain and shareholder value is feared to be damaged by the listing of subsidiaries. However, it maintained its investment opinion of "buy", saying it is expected to release a new product.

The company estimated Kakao Games' sales in the fourth quarter of last year to be 271.9 billion won, down 5.2 percent from a year earlier. Operating profit during the same period was expected to fall 28.8% to 34.1 billion won.

Hyundai Motor Securities said, "With no new products being released, sales of other businesses also decreased due to seasonal factors," adding, "Odin did well both in Korea and Taiwan, but sales of 'Uma Musme' fell rapidly, resulting in a 14.5% drop in mobile game sales from last year."

Regarding "Lionheart Studio," an Odin developer and a subsidiary of Kakao Games, Hyundai Motor Securities predicted that "IPO will be possible in the first half of this year," and predicted that it would be difficult for Kakao Games to avoid a fall in stock prices due to duplicate listing.

In October last year, Lion Heart Studio withdrew its initial public offering while seeking to be listed. At that time, Lion Heart Studio accounted for 65% of Kakao Games' operating profit (as of 2021), sparking controversy among investors over overlapping listing.

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