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(Source=DoubleU Games) |
[Alpha Biz= Kim Jisun] Shinhan Investment Corp. raised its target price for DoubleU Games (192080) by 1.5%, from 68,000 KRW to 69,000 KRW, maintaining its "Buy" recommendation. The firm emphasized that investors should focus on the growth potential of the company’s new business rather than just the earnings performance.
In the fourth quarter of last year, DoubleU Games' operating revenue was 155.8 billion KRW, a 1.5% increase from the previous year. However, its operating profit dropped by 3.7% to 60.5 billion KRW, falling short of the consensus estimate of 64.7 billion KRW. Despite this, Shinhan Investment pointed out that the social casino business remained strong, and the company achieved an operating margin of 38.8%, thanks to strict control over labor and marketing expenses.
The brokerage firm also noted that marketing expenses for SuperNation and DoubleU Casino had risen, but labor costs were being handled cautiously. The acquisition of Turkish casual game developer Paxi Games, announced late last year, is expected to be completed within the first quarter and will be incorporated into the company’s financials starting from the next quarter.
Following the acquisition, DoubleU Games began marketing i-Gaming products and saw significant returns on investment (ROI). In fact, the company has been recording its highest-ever monthly revenue, including in January.
Shinhan Investment highlighted that the main titles of Paxi Games have shown steep growth since the second half of last year, achieving record-high transaction volumes in January. The firm expects that 2025 will focus on the stable operation of the profitable social casino business, along with marketing and growth in i-Gaming and Paxi Games.
The brokerage firm forecasted that the company’s focus on cost-efficiency and shareholder returns will drive positive stock momentum, and that the combination of favorable exchange rate effects and strong results from new business ventures will likely lead to a stock price revaluation.
AlphaBIZ Kim Jisun(stockmk2020@alphabiz.co.kr)
