Game Stocks Show Signs of Rebound with Positive Earnings and New Releases
Game stocks, which have long struggled with sluggish prices, are now raising expectations for a rebound, fueled by positive news and strong third quarter earnings. This optimism is further bolstered by the ban on short selling and positive evaluations of upcoming new releases, as well as the impact of the G-Star event.
Positive Performance and Stock Trends
On the 7th, gaming leader Krafton announced a strong performance for the third quarter, exceeding market expectations. The Korea Exchange reported that the KRX Game New Deal K-Index closed at 629.45 on the 9th, marking a substantial increase of 14.29% in a week. Notably, the stock prices of major companies such as Krafton, NCsoft, Netmarble, Kakao Games, and Wemade included in the index, showed significant growth during the same period.
Investors have been responding positively to the third quarter earnings announcements, particularly highlighting Krafton’s robust operating profit of 189.3 billion won, indicating a 30.9% increase from the previous year. This trend was further supported by Wemade’s return to profitability and the strong performance of Com2uS Holdings.
Expectations for Future Growth
Industry analysts are optimistic about the future, with expectations of new game releases and international events like G-Star driving momentum. The ban on short selling transactions for all stocks in the domestic stock market has also been cited as a contributing factor to the rebound of gaming stocks.
Outlook for G-Star
As G-Star, Korea’s biggest gaming event, approaches, investors are closely watching for potential new developments. The event, scheduled for November, has the potential to act as a catalyst for the release of new games and further drive stock performance.
However, concerns are also raised about the event potentially dampening momentum if previously revealed work fails to meet expectations. Analysts advise investors to carefully consider stock choices that can maintain anticipation even after the event.
In conclusion, the positive performance of game stocks, driven by strong earnings and anticipation for new releases, suggests a potential turning point for the industry. With upcoming events like G-Star on the horizon, the gaming sector is poised for further growth and investment opportunities.
[비즈니스포스트] Game stocks, which had long been showing sluggish stock prices, are raising expectations for a rebound with positive news added to the announcement of good third quarter earnings.
This is because it is expected to benefit from the ban on short selling, and positive evaluations of new works to be released in the future are coupled with the impact of the G-Star event.
▲ On the 7th, gaming leader Krafton announced a good performance for the third quarter. The photo is from Krafton headquarters.
According to the Korea Exchange on the 9th, the KRX Game New Deal K-Index closed at 629.45 on this day. Up to this day, the KRX Game New Deal K-Index showed an increase of 14.29% in a week.
During the same period, the stock prices of Krafton (12.97%), NCsoft (11.13%), Netmarble (21.98%), Kakao Games (13.0%), and Wemade (44.5%) included in the index showed strong performance.
Third quarter earnings announcements from major companies provided positive momentum.
Krafton, a leading gaming company, announced its third quarter earnings after the market closed on the 7th. Krafton announced that it achieved 189.3 billion won in operating profit on a consolidated basis, an increase of 30.9% over the same period last year. It was significantly higher than market expectations of 145.5 billion won.
Kim Hyun-yong, a researcher at Hyundai Motor Securities, said, “Sales were better than concerns as Chinese traffic gradually improved, and in addition to reflecting the impact of India’s business resumption, sales in emerging countries increased” r obvious and Korea-Japan regions by enjoying the peak season effect.” He added, “From 2024 onwards, the masterpiece Black Budget “We expect that concerns about a gap in the line will be resolved with the release of a number of new games, including .”
On the same day, Wemade also announced its earnings, and the stock prices of Wemade group stocks increased.
Wemade announced that it had turned profitable, generating 45.4 billion won in operating profit on a consolidated basis. Wemade turned a profit after six quarters, and sales increased 117.5% during the same period, reaching a record quarterly level.
Kim Ha-jeong, researcher at Daol Investment & Securities, said, “The stock price rebounded strongly as the global launch of the blockchain version of ‘Night Crow’ and Mir 4 and Mir M presented a strong will and a challenging goal for becoming into China. ,” adding, “The game will be released in the first quarter of 2024. “We believe that expectations can be maintained until then,” he analyzed.
In addition, Com2uS Holdings has also posted good results, including turning a profit in the third quarter, increasing the perception that the gaming industry has hit rock bottom. Previously, the performance of the gaming industry had been slow for two years due to the absence of new large-scale games and worsening conditions in the gaming industry.
It is also assessed that the fact that the financial authorities have announced a ban on short selling transactions for all stocks in the domestic stock market from the 6th onwards has had a positive effect on the rebound of hunting stocks.
▲ Stock price trends are attracting attention ahead of G-Star, Korea’s biggest gaming event in November. <그래픽 비즈니스포스트>
Game stocks have a higher proportion of short selling transactions compared to other industries due to the recent downturn in business conditions and the highly volatile nature of the business.
According to Mirae Asset Securities, the average share of the daily short sale volume in a month for the top six gaming stocks by market capitalization (Krafton, NCsoft, Netmarble, Pearl Abyss, Kakao Games, Wemade) is about 15%, compared to the general stock market average (5%) was about three times higher.
Lim Hee-seok, a researcher at Mirae Asset Securities, said, “The concentration of short selling in the gaming industry has maximized the volatility of new game launches and quarterly performance, leading to a weakening of investment sentiment in the industry,” adding , “Netmarble, Kakao Games, and Pearl, which had a particularly high share of short selling in the short term, “The volatility of Abyss stock prices will decrease,” he analyzed.
Investors are paying attention to see if the good news can continue until G-STAR 2023, the biggest international game exhibition in Korea.
This is because, as major game companies confirm their participation, a new momentum for the release of new games may emerge. G-STAR will be held at BEXCO in Busan on the 16th.
On the other hand, there are concerns that the G-STAR event could destroy momentum as much of the work presented has been previously revealed. The advice is to choose and invest in stocks that will continue to increase anticipation even after the event.
Kim Ha-jeong, a researcher at Daol Investment & Securities, said, “Since a significant portion of the G-STAR game records have been revealed through media reports, the G-STAR game show has the potential to act as a ‘sales forward’. news’ and become unexpectedly bad news.” “In the case of game companies, we recommend investing if expectations can continue even after the performance of the third quarter and G-STAR,” he said. Reporter Jeong Hee-kyung
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