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Photo: Kakao Games |
[Alpha Biz= Paul Lee] Kakao Games is streamlining its non-core businesses to secure investment capacity for new game releases, with earnings projected to improve starting in the third quarter.
In a report released today, IBK Investment & Securities stated that Kakao Games completed the sale of Senatechnologies last September and classified its Kakao VX (golf) business as discontinued operations, signaling a clear intent to sell.
The divestment of non-core businesses is expected to enhance resource allocation efficiency, provide necessary capital for major new releases, and improve operating leverage by reducing fixed costs if the new games perform well.
With multiple major game launches planned, Kakao Games is set to gain momentum from the second quarter. The company aims to release Project Q and Chrono Odyssey in the fourth quarter. Additionally, a closed beta test for Chrono Odyssey is scheduled for Q2, followed by ArcheAge Chronicle later in the year, and the release of Goddess Order in Q3, further fueling expectations for a performance rebound.
However, IBK Investment & Securities adjusted the target price downward from 25,000 KRW to 22,000 KRW to reflect a lower earnings outlook. Despite this, the firm maintained a "Buy" rating, citing the accelerating divestment of non-core subsidiaries and the expected earnings turnaround in Q3, with four major new titles set for release in Q4.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
