NCsoft (036570)
Solid Revenue Upside
Danny Lee Yonghyun Choi Internet & Games / Media Research Associate April 13, 2021 +82-2-6114-2960 [email protected] +82-2-6114-2915 [email protected]
Maintain BUY and target price of We maintain BUY on NCsoft and our TP of KRW1,150,000. Although we cut our 2021E KRW1,150,000 revenue forecast by 6.8% and OP by 12.9% to reflect the delayed release of Trickster M and the sluggish revenue generated by Lineage 2M in Japan and Taiwan, we leave our 2022 outlook mostly intact. We expect earnings to rebound from 2Q21 given the launch of Blade & Soul 2 and Trickster M and the full three-month overseas revenue contribution from Lineage 2M.
Factors weighing on 1Q21 earnings: We estimate 1Q21 revenue at KRW536.6bn (-4.4% QoQ, -26.6% YoY) and OP at Delayed game rollout, performance- KRW100.5bn (-35.9% QoQ, -58.4% YoY), which is 47.5% below our previous estimate and based bonuses and wage hikes 31.2% below consensus. We attribute the soft revenue to the postponed release of Trickster M (originally expected to launch in February, now in June) and the disappointing performance of Lineage 2M in Japan in Taiwan. Furthermore, daily average revenue for Lineage M appears to have decreased 7.8% QoQ, mostly due to a lack of new content ahead of an update on Apr 7 rather than the effects of a boycott due to pattern update rollbacks. Meanwhile, OP should erode due to a 21.6% YoY in labor costs, including performance bonus payments of approximately KRW30bn and wage hikes.
Strong rebound expected from 2Q21 We forecast 2Q21 OP will surge to KRW314.6bn (+213.0% QoQ, +50.6% YoY) fueled by the launch of new games and the full three-month contribution of Lineage 2M in Japan and Taiwan. With the pre-launch character- and community-building event scheduled for Apr 22, we anticipate Blade & Soul 2 will be released in early-June. Of note, Lineage M was launched 36 days after its pre-launch event and Lineage 2M 44 days.
Buy Maintain Trading Data Risk & Total Return (annualized over three years) Free float 81.9% Target Price (Maintain) KRW1,150,000 Avg. T/O val. (3m, KRWbn) 103.9 Return 1 2 3 4 High5
Foreign ownership 52.0% Risk Dividend yield* 1.4% 1 FALSE FALSE FALSE FALSE TRUE Total return 27.2% Major shareholders Taek-Jin Kim and 8 others 12.0% 2 FALSE FALSE FALSE FALSE FALSE Current price (Apr 13) KRW914,000 3 FALSE FALSE FALSE FALSE FALSE Consensus target price KRW1,225,217 National Pension Service 10.7%
4High FALSE FALSE FALSE FALSE FALSE Market capitalization USD17.9bn Stock Price Performance 5 FALSE FALSE FALSE FALSE FALSE * 12-month forward (%) 1M 3M 6M 12M
Absolute -2.2 -2.8 21.2 40.4
Relative -5.8 -3.4 -8.1 -19.1
Earnings Forecast & Valuation Stock Price & Relative Performance
Fiscal year-end 2020A 2021E 2022E 2023E Relative performance (LHS) Revenue (KRWbn) 2,416 3,081 3,797 4,176 Stock price (RHS) % KRW OP (KRWbn) 825 1,178 1,599 1,166 40 1,100,000 NP to control. int. (KRWbn) 587 903 1,217 866 30 EPS (KRW) 26,756 41,152 55,435 39,453 20 EPS growth (%) 63.9 53.8 34.7 -28.8 10 800,000 P/E (x) 34.8 22.2 16.5 23.2 0 EV/EBITDA (x) 21.0 14.0 10.0 13.1 -10 P/B (x) 6.5 5.2 4.2 3.8 -20 ROE (%) 20.8 25.8 28.0 17.2 -30 500,000 Div. yield (%) 0.9 1.4 2.2 3.0 Apr '20 Jul '20 Oct '20 Jan '21 Apr '21
Source(s): Company data, KB Securities
Meanwhile, Trickster M is slated for release in June. We forecast 2Q21 daily average revenue from the two games at KRW2.5bn and KRW1.0bn, respectively.
Lineage 2M performing well on Lineage 2M has weighed on shares as the game has performed poorly in terms of Google Play Apple iOS revenue rankings since its release in Japan and Taiwan. However, the game has performed well on Google Play, and Lineage 2M has steadily climbed the rankings board. Once the game secures more loyal users, Lineage 2M should generate stable revenue going forward.
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Investment Opinion & Risks
Base-case scenario: Catalysts 1) Lineage 2M 2021E domestic average daily
Bull-case scenario KRW1,270,000 (24x P/E) revenue at KRW2.3bn
2) Blade & Soul 2, Trickster M release in 2Q21
Bull-case scenario: Upside risks Base-case scenario (target price) KRW1,150,000 (22.3x P/E) 1) Lineage 2M 2021E domestic average daily revenue at KRW2.5bn
Bear-case scenario KRW950,000 (18.0x P/E) 2) Blade & Soul 2/Trickster M release in 2Q21
and become popular Bear-case scenario: Downside risks Current price KRW914,000 1) Lineage 2M 2021E domestic average daily revenue at KRW2.0bn 2) Blade & Soul 2/Trickster M rollouts delayed
Revised Earnings Estimates Valuation & Target Price Calculation (KRWbn, %) Previous Revised Change 2021E 2022E 2021E 2022E 2021E 2022E 1) Valuation method: Revenue 3,304 3,864 3,081 3,797 -6.8 -1.7 P/E model OP 1,352 1,608 1,178 1,599 -12.9 -0.6 NP (to control. int.) 1,041 1,234 903 1,217 -12.5 -0.6 2) Target price calculation: Source(s): KB Securities estimates KRW53,036 x 22.3x multiple
KB Estimates vs. Consensus 3) Target price range: (KRWbn, %) KB Estimates Consensus Difference KRW950,000 – KRW1,270,000 2021E 2022E 2021E 2022E 2021E 2022E Revenue 3,081 3,797 3,057 3,840 0.8 -1.1 4) ) Valuation at target price: OP 1,178 1,599 1,184 1,613 -0.5 -0.9 22.3x P/E NP (to control. int.) 903 1,217 889 1,203 1.6 1.1 Source(s): FnGuide, KB Securities estimates
Revenue Composition (2021E) Earnings Sensitivity Analysis (%) EPS Change 2021E 2022E +1% in FX rate +0.1 +0.1 7% +1pp in interest rate +1.0 +1.0
Game
Royalties
93%
Source(s): KB Securities estimates
Peer Group Comparison
12m fwd 12m fwd (KRWbn, x, %) Market cap 12m fwd P/E 5y EPS CAGR 5y EBITDA CAGR P/B EV/EBITDA
NCsoft 20,066.0 20.8 27.59 4.8 11.3 26.69
Activision Blizzard 83,726.2 25.1 19.61 4.3 15.7 12.42
NetEase 81,365.5 24.5 12.03 4.4 18.2 19.28
Nexon 32,733.1 24.0 0.65 3.7 14.6 9.76
Source(s): Bloomberg consensus, KB Securities
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Table 1. 1Q21 Earnings Forecast
(KRWbn, %, pp) 1Q21E 4Q20 QoQ 1Q20 YoY Previous Diff. Cons. Diff. Revenue 536.6 561.3 (4.4) 731.1 (26.6) 604.7 (11.3) 556.8 (3.6) OP 100.5 156.7 (35.9) 241.4 (58.4) 191.6 (47.5) 146.1 (31.2) OPM 18.7 27.9 (9.2) 33.0 (14.3) 31.7 (13.0) 26.2 (7.5) NP (to control. int.) 83.7 80.6 3.9 195.5 (57.2) 151.4 (44.7) 111.4 (24.9) NPM (to control. 15.6 14.4 1.2 26.7 (11.1) 25.0 (9.4) 20.0 (4.4) int.)
Source(s):Company data, FnGuide consensus, KB Securities estimates
Table 2. Earnings Forecast (Consolidated)
(KRWbn) 1Q20 2Q20 3Q20 4Q20P 1Q21E 2Q21E 3Q21E 4Q21E 2019 2020 2021E 2022E
Revenue 731.1 538.6 585.2 561.3 536.6 743.9 900.6 899.4 1,701.2 2,416.2 3,080.5 3,796.6
(QoQ %) 37.0 (26.3) 8.7 (4.1) (4.4) 38.6 21.1 (0.1)
(YoY %) 103.8 31.1 47.1 5.2 (26.6) 38.1 53.9 60.2 (0.8) 42.0 27.5 23.2
Games 678.3 476.3 526.3 517.3 493.9 702.5 860.1 860.1 1,503.7 2,198.1 2,916.6 3,650.4
Lineage 1 44.8 34.3 49.9 46.8 43.2 38.5 48.0 45.1 174.1 175.7 174.8 168.7
Lineage 2 26.4 25.8 26.3 26.0 25.8 25.1 25.7 25.3 93.6 104.5 101.9 99.3
Aion 10.1 8.194 8.5 18.8 14.8 14.894 14.4 14.8 46.0 45.6 59.0 57.1
Blade & Soul 19.6 19.8 17.2 15.6 16.6 17.2 16.3 15.4 83.9 72.2 65.4 64.3
Guild Wars 2 12.5 15.6 18.8 14.2 13.8 13.7 13.5 13.4 58.7 61.2 54.4 52.5
Lineage M 212.0 159.9 245.2 211.7 190.8 199.8 220.7 218.0 834.7 828.7 829.3 804.5
Lineage 2M 341.1 197.3 144.5 166.7 159.4 159.5 152.7 210.7 143.9 849.6 892.1 834.8
Other 11.6 15.5 16.0 17.5 29.5 233.9 368.7 317.4 68.9 60.6 739.7 1,569.3
Royalties 52.8 62.3 58.8 44.1 42.6 41.5 40.5 39.4 197.5 218.0 163.9 146.2
OPEX 489.7 329.6 367.5 404.6 436.1 429.3 492.3 545.1 1,222.2 1,591.4 1,902.7 2,197.3
(QoQ %) 24.7 (32.7) 11.5 10.1 7.8 (1.5) 14.7 10.7 (YoY %) 75.4 17.1 36.7 3.0 (11.0) 30.3 34.0 34.7 11.1 30.2 19.6 15.5 Labor 211.8 162.3 159.1 184.9 224.8 179.6 181.4 192.9 555.1 718.2 778.7 833.3 Variable 223.5 138.7 162.2 158.2 153.3 191.6 261.2 287.8 507.9 682.6 893.9 1,114.2 Marketing 39.6 12.9 29.7 44.8 41.6 41.3 32.7 47.1 107.3 127.0 162.6 178.8 D&A 14.8 15.6 16.5 16.7 16.4 16.8 17.1 17.3 52.0 63.7 67.5 71.0 OP 241.4 209.0 217.7 156.7 100.5 314.6 408.3 354.4 479.0 824.8 1,177.8 1,599.3 (QoQ %) 71.0 (13.4) 4.2 (28.0) (35.9) 213.0 29.8 (13.2) - - - - (YoY %) 203.6 61.5 68.9 11.0 (58.4) 50.6 87.6 126.1 (22.1) 72.2 42.8 35.8 OPM(%) 33.0 38.8 37.2 27.9 18.7 42.3 45.3 39.4 28.2 34.1 38.2 42.1 NP (to 195.5 158.2 153.2 80.6 83.7 242.8 312.1 264.8 358.2 587.4 903.4 1,217.0 control.int.) (QoQ %) 260.5 (19.1) (3.2) (47.4) 3.9 190.1 28.5 (15.2) - - - - (YoY %) 163.5 35.9 35.1 48.6 (57.2) 53.5 103.8 228.6 (14.4) 64.0 53.8 34.7 NPM(%) 26.7 29.4 26.2 14.4 15.6 32.6 34.7 29.4 21.1 24.3 29.3 32.1
Source(s): Company data, KB Securities estimates
Table 3. Earnings Estimates Revisions
2021E 2022E (KRWbn, %, pp) Revised Previous Change Cons. Diff. Revised Previous Change Cons. Diff. Revenue 3,080.5 3,304.4 (6.8) 3,056.9 0.8 3,796.6 3,864.1 (1.7) 3,839.5 (1.1) OP 1,177.8 1,351.5 (12.9) 1,183.5 (0.5) 1,599.3 1,608.4 (0.6) 1,613.4 (0.9) OP margin 38.2 40.9 (2.7) 38.7 (0.5) 42.1 41.6 0.5 42.0 0.1 NP (to control. int.) 903.4 1,032.5 (12.5) 889.1 1.6 1,217.0 1,223.8 (0.6) 1,203.3 1.1 NP margin (to control. int.) 29.3 31.2 (1.9) 29.1 0.2 32.1 31.7 0.4 31.3 0.7
Source(s): FnGuide consensus, KB Securities estimates
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Table 4. Key Assumptions for Mobile Games
(KRWbn, day) 1Q20 2Q20 3Q20 4Q20 1Q21E 2Q21E 3Q21E 4Q21E 2019 2020 2021E 2022E
Lineage M 212.0 159.9 245.2 211.7 190.8 199.8 220.7 218.0 834.7 828.7 829.3 804.5 Avg. daily sales 2.3 1.8 2.7 2.3 2.1 2.2 2.4 2.4 2.3 2.3 2.3 2.2 No. of days serviced 91 91 92 92 90 91 92 92 365 366 365 365
Lineage 2M 341.1 197.3 144.5 166.7 171.4 285.3 224.7 210.7 143.9 849.6 892.1 834.8 Avg. daily sales 3.7 2.1 1.6 1.8 1.9 3.1 2.4 2.3 4.1 2.3 2.4 2.3 No. of days serviced 91 92 92 91 90 92 92 91 35 366 365 365
Trickster M 15.0 68.5 47.3 130.8 174.2 Avg. daily sales 1.0 0.7 0.5 0.7 0.5 No. of days serviced 15 92 91 198 365
Blade & Soul 2 75.0 209.7 171.1 455.8 323.1 Avg. daily sales 2.5 2.3 1.9 2.1 0.9 No. of days serviced 30 92 91 213 365
Aion 2 60.0 60.0 396.4 Avg. daily sales 2.0 2.0 1.1
No. of days serviced 30 30 365
Project TL 19.8 19.8 196.1 Avg. daily sales 0.2 0.2 1.1 No. of days serviced 90 90 182
Source(s): Company data, KB Securities estimates
Table 5. NCsoft Game Lineup
Game Release date Genre Country/Region Platform Developer/Publisher Notes
Lineage 2: Blood 07/28/16 MMORPG China Mobile Snail Games/NCsoft Pledge Collective Lineage RK 12/08/16 Global Mobile NCsoft/NCsoft - RPG
Blade & Soul 08/08/17 Web game China Mobile Tencent/Tencent
Final Blade 02/14/17 RPG Korea Mobile Sky People/NCsoft -
Professional 03/30/17 Sports Korea Mobile Ntreev/NCsoft - Baseball H2
Lineage M 06/21/17 MMORPG Korea Mobile NCsoft/NCsoft -
Lineage M 12/11/17 MMORPG Taiwan Mobile NCsoft/Gamania -
Arami 08/17/17 Puzzle Global Mobile NCsoft/NCsoft - Puzzventure
Pangya M 02/08/18 Sports Southeast Asia Mobile NCsoft/NCsoft -
AION: Legions of North America 01/24/19 RPG Mobile NCsoft/NCsoft - War / Europe
Lineage M 05/29/19 MMORPG Japan Mobile NCsoft/NCsoft -
Lineage 2M 12/27/19 MMORPG Korea Mobile NCsoft/NCsoft -
FUSER 11/10/20 Rhythm U.S./Europe PC/Console Harmonix/NCsoft -
Lineage 2M 03/24/21 MMORPG Taiwan, Japan Mobile NCsoft/NCsoft
3mn pre- Trickster M 2Q21 MMORPG Korea Mobile NCsoft/NCsoft registrations 4mn pre- Blade & Soul 2 2Q21 MMORPG Korea Mobile NCsoft/NCsoft registrations
Aion 2 2H21 MMORPG Korea Mobile NCsoft/NCsoft
Project TL 2021 MMORPG Korea PC/Console NCsoft/NCsoft 2020 CBT
Blade & Soul S TBA MMORPG Korea Mobile NCsoft/NCsoft
Source(s): Company data, KB Securities estimates
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Fig 1. 12m Fwd OP Consensus & Share Price Trend
12 month fwd. OP Consensus (R) Adjusted stock price (L) KRW KRWbn 1,200,000 1,600,000
1,400,000 1,000,000 1,200,000 800,000 1,000,000
600,000 800,000
600,000 400,000 400,000 200,000 200,000
0 0 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21
X 12m fwd P/E 30 Lineage2M Lineage2 Revolution Korea release 25 Korea release (Nov 2019) (Dec 2016) 20
15 Lineage2M Japna/Taiwan 10 Lineage2 LineageM Blade&Soul Blade&Soul release Korea release Xion Korea release Lineage2 Korea releaseChina LineageM (Mar 2021) 5 (Oct 2003 Korea release (Jun 2017) Global release (Jun 2012 release Taiwan release (Nov 2008) (Nov 2004) (Nov 2013) (Dec 2017) 0 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21
Source(s): Quantiwise, KB Securities
Fig 2. NCsoft Game Releases
Source(s): Company data, KB Securities
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Fig 3. Lineage 2M’s Japan iOS Revenue Ranking Fig 4. Lineage 2M’s Japan Google Play Revenue Ranking
03/27/21 03/30/21 04/02/21 04/05/21 04/08/21 04/11/21 0 0 10 10
20 20 30
40 30
50 40 60
70 50
80 (Ranking) 60 (Ranking) 90
Source(s): Mobileindex, KB Securities Source(s): Mobileindex, KB Securities
Fig 5. Lineage 2M’s Taiwan iOS Revenue Ranking Fig 6. Lineage 2M’s Taiwan Google Play Revenue Ranking
3/26/21 3/29/21 4/01/21 4/04/21 4/07/21 4/10/21 4/13/21 0
0 1 2
1 3
4 2 5
6 3 7 8 4 9
10 (Ranking) (Ranking) 5
Source(s): Mobileindex, KB Securities Source(s): Mobileindex, KB Securities
Fig 7. Lineage M’s Taiwan iOS Revenue Ranking Fig 8. Lineage M’s Taiwan Google Play Revenue Ranking
1/20 4/20 7/20 10/20 1/21 4/21 1/20 4/20 7/20 10/20 1/21 4/21 0 0 5 10 1 15 20 2 25
30 3 35
40 4 45 (Ranking) 50 (Ranking) 5
Source(s): Mobileindex, KB Securities Source(s): Mobileindex, KB Securities
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Table 6. Target Price Calculation
Value Notes 12m fwd NP (to control. int.) 1,164.3 No. of shares (’000) 21,954 Fully diluted EPS (KRW) 53,036 Target P/E (x) 22.3 Average of Activision, EA, NetEase, Nexon Target price (KRW) 1,150,000 Current price (KRW) 914,000
Upside (%) 25.8
Source(s): FnGuide, KB Securities estimates
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Income Statement Statement of Financial Position (KRWbn) 2019A 2020A 2021E 2022E 2023E (KRWbn) 2019A 2020A 2021E 2022E 2023E (Reporting standard) (IFRS-C) (IFRS-C) (IFRS-C) (IFRS-C) (IFRS-C) (Reporting standard) (IFRS-C) (IFRS-C) (IFRS-C) (IFRS-C) (IFRS-C)
Revenue 1,701 2,416 3,081 3,797 4,176 Total assets 3,346 4,081 4,812 5,760 6,206
Cost of revenue 0 0 0 0 0 Current assets 2,088 2,444 3,211 4,085 4,602 Gross profit 1,701 2,416 3,081 3,797 4,176 Cash and cash equivalents 303 157 919 1,760 2,277 SG&A expenses 1,222 1,591 1,903 2,197 3,010 Current financial assets 1,469 1,962 1,962 1,962 1,962
Operating profit 479 825 1,178 1,599 1,166 Trade receivables 254 243 245 270 270 EBITDA 531 891 1,249 1,671 1,238 Inventory 2 1 1 1 1 Non-operating accounts 17 -22 38 39 0 Other current assets 59 81 83 92 92
Interest income 34 33 33 33 0 Non-current assets 1,259 1,637 1,601 1,676 1,604 Interest expenses 8 9 9 9 0 Investment assets 838 1,186 1,198 1,318 1,318 Profit on equity method -19 -6 2 2 0 Property, plant and equipment 350 368 318 270 200
Net other non-operating income 11 -40 12 13 0 Intangible assets 50 50 52 55 54 Profit before tax 496 803 1,216 1,638 1,166 Other non-current assets 21 33 33 33 33 Income tax expense 137 217 316 426 303 Total liabilities 834 937 944 951 951
Net profit 359 587 900 1,212 863 Current liabilities 450 509 514 519 519 NP attributable to controlling interests 358 587 903 1,217 866 Trade payables 5 0 5 10 10 Adj. net profit 358 587 903 1,217 866 Short-term financial liabilities 43 42 42 42 42
Other current liabilities 402 467 467 467 467 Operating Statistics & Ratios Non-current liabilities 384 427 429 431 431 (%) 2019A 2020A 2021E 2022E 2023E Non-current financial liabilities 315 295 297 300 300
Revenue growth -0.8 42.0 27.5 23.2 10.0 Other non-current liabilities 69 132 132 132 132 OP growth -22.1 72.2 42.8 35.8 -27.1 Total equity 2,512 3,145 3,868 4,810 5,256
EBITDA growth -17.3 67.6 40.3 33.8 -25.9 Issued capital 11 11 11 11 11 NP growth of parent -14.4 64.0 53.8 34.7 -28.8 Share premium 436 433 433 433 433 GP margin 100.0 100.0 100.0 100.0 100.0 Other equity interest -438 -438 -438 -438 -438
OP margin 28.2 34.1 38.2 42.1 27.9 Accumulated other comprehensive income 108 278 278 278 278 EBITDA margin 31.2 36.9 40.6 44.0 29.6 Retained earnings 2,382 2,857 3,584 4,530 4,979 EBT margin 29.2 33.3 39.5 43.2 27.9 Controlling interests 2,499 3,142 3,869 4,815 5,264
NP margin of parent 21.1 24.3 29.3 32.1 20.7 Non-controlling interests 13 3 0 -5 -9
Statement of Cash Flows Key Ratios (KRWbn) 2019A 2020A 2021E 2022E 2023E (x, %, KRW) 2019A 2020A 2021E 2022E 2023E
Cash flow from operating activities 392 708 896 1,169 934 Multiples Net profit 359 587 900 1,212 863 P/E 33.1 34.8 22.0 16.3 23.0
Depreciation & amortization 52 66 72 72 72 P/B 4.8 6.5 5.1 4.1 3.8
Other non-cash adjustments 148 251 314 424 303 P/S 7.0 8.5 6.5 5.2 4.8 Investments in working capital -71 -46 -73 -113 0 EV/EBITDA 19.7 21.0 13.9 9.9 12.9
Decrease(Increase) in receivables -106 11 -2 -25 0 EV/EBIT 21.9 22.6 14.7 10.3 13.7 Decrease(Increase) in inventory -1 0 -1 0 0 Dividend yield, ordinary (%) 1.0 0.9 1.5 2.2 3.0 Increase(Decrease) in payables 3 3 5 5 0 EPS 16,320 26,756 41,152 55,435 39,453
Investments in other working capital 34 -60 -75 -93 0 BVPS 113,836 143,098 176,225 219,316 239,784 Other operating cash flow -97 -150 -316 -426 -303 SPS 77,514 110,057 140,317 172,933 190,226 Cash flow from investing activities -234 -696 -36 -146 0 DPS (annual, ordinary) 5,220 8,550 13,150 20,226 27,245
Capital expenditure -50 -62 -20 -22 0 Cash dividends payout ratio (%) 30.0 30.0 30.0 34.3 64.8 Investments in intangibles -3 0 -4 -4 0 Operating performance Changes in investment assets 253 -667 -12 -120 0 ROE 14.7 20.8 25.8 28.0 17.2
Other investment cash flow -434 34 0 0 0 ROA 11.4 15.8 20.2 22.9 14.4 Cash flow from financing activities -46 -159 -99 -182 -417 ROIC 142.5 216.8 370.7 584.2 546.1 Proceeds from (repayment of) debt 86 -40 2 2 0 Financial structure (%)
Changes in equity 2 0 0 0 0 Total liab./equity 33.2 29.8 24.4 19.8 18.1 Dividends paid -125 -108 -176 -271 -417 Net debt/equity Net Cash Net Cash Net Cash Net Cash Net Cash Other financing cash flow -9 -12 76 88 0 Current ratio 4.6 4.8 6.2 7.9 8.9
Other cash flow 6 1 0 0 0 Interest coverage (x) 56.9 91.9 128.6 174.6 0.0 Increase/decrease in cash 118 -146 761 841 518 Activity ratios Cash and cash equivalents at FYE 303 157 919 1,760 2,277 Asset turnover (x) 0.5 0.7 0.7 0.7 0.7
Free cash flow 342 645 876 1,147 934 Receivables turnover (x) 8.4 9.7 12.6 14.7 15.5 Net cash flow 199 367 759 839 518 Payables turnover (x) 543.8 0.0 0.0 506.2 417.6 Net cash (net debt) 1,414 1,782 2,541 3,380 3,897 Inventory turnover (x) 1,105.6 1,733.4 3,193.6 2,977.0 3,125.8
Source(s): Company data, KB Securities estimates
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Disclosures Rating and Target Price Changes (Share price ━, Target Price ━)
KRW NCsoft NCsoft (036570) Date R ating Target Price Differential (%) 1,360,000 (KRW) Av g. Max / Min Apr-11-2019 Buy 610,000 -20.10 1,040,000 Aug-02-2019 Buy 630,000 -14.64 0.32 Jan-22-2020 Buy 750,000 -13.14 -10.40 720,000 Feb-12-2020 Buy 790,000 -18.04 -8.86
400,000 Mar-26-2020 Buy 780,000 -16.50 -10.38 Apr '19 Aug '19 Dec '19 Apr '20 Aug '20 Dec '20 Apr '21 May-12-2020 Buy 870,000 -2.12 14.37 Jul-21-2020 Buy 1,000,000 -18.74 -10.30 Nov-16-2020 Buy 1,050,000 -17.56 -6.19 Jan-06-2021 Buy 1,150,000
KB Securities is a liquidity provider for stocks issued by NCsoft as of the date of this Proportion of investment rating (as of March 31, 2021) report. KB Securities is an issuer and liquidity provider of equity-linked warrants (ELW) that have stock of NCsoft underlying as of the date of this report. Buy Hold Sell 79.9 20.1 - KB Securities has not provided any material in this research report to institutional investors or third parties in advance of publication of this research report. The research * Note: Based on reports presented with investment ratings over the past one year analyst responsible for the preparation of this research report does not have any beneficial interest in any security or issuer covered and certifies that the analysis was made in good faith and that the views presented accurately reflect personal opinion without any undue influence or intervention.
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Notes: The industry rating system of KB Securities has shifted from (Overweight, Neutral, Underweight) to (Positive, Neutral, Negative) as of Jun 28, 2017. KB Securities’ standards for industry rating shifted starting on Feb 10, 2020 from an estimation of six-month absolute returns to an estimation of 12-month absolute returns.
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