[Click eStock] NEOWIZ: Approach After New Titles Are Detailed... Target Price 20,000 Won

On September 2, Hyundai Motor Securities commented on NEOWIZ, stating that the absence of major new console releases and the limitations in the performance of existing live services are capping the stock’s upside. The brokerage recommended a buy approach when the lineup for major new titles becomes more concrete. It initiated coverage with a 'Neutral (Market Perform)' investment rating and set a target price of 20,000 won.

Choi Seungho, a researcher at Hyundai Motor Securities, said, "NEOWIZ’s consolidated sales for 2026 are expected to reach 413.8 billion won (YoY -4%), with operating profit at 32.9 billion won (YoY -45%)." He added, "Although the company recently launched its new MMORPG title 'Kingdom 2', its estimated daily sales are less than 100 million won, so its contribution to results is expected to be limited."

Choi noted, "In the console and PC segments, NEOWIZ proved its excellent development capabilities, with 'Lies of P' in 2023 and 'Lies of P DLC' in 2025 both becoming hits and cumulative sales exceeding 4 million units. However, the console business is still in the process of building out its intellectual property (IP), so the prolonged gap until the next blockbuster release is a factor that limits share price increases."

He added, "In order to fill the gap in major console IP, it is necessary to generate results from live services such as mobile games. While the resurgence of 'Brown Dust 2' is expected to boost mobile sales to 211.2 billion won this year (YoY +8%), this is unlikely to drive company-wide earnings growth, so finding new live game hits is urgent."

He explained, "The stable cash flow from web-board games is a strength. However, as the company is aiming to become the 'Capcom of Korea', it is difficult to expect cost reductions before the release of new titles, and the package-centered structure carries substantial individual title risk."

Choi concluded, "The target price of 20,000 won is based on estimated 2026 earnings per share (EPS) of 2,230 won and a P/E ratio of 9 times, factoring in the new title cycle for game companies. Given NEOWIZ’s top-tier development capabilities and potential in Korea, it is not too late to switch to a buy perspective when the new title cycle is in full swing."

This content was produced with the assistance of AI translation services.