“W Games to spend 80-100 billion won on shareholder returns next year”

(Source = Kiwoom Securities)

Kiwoom Securities maintained its investment opinion of Buy on the 30th, saying that the amount of funds used for shareholder returns for DoubleU Games next year will be in the range of 80-100 billion won. The target stock price was also set at 78,000 won, the same as before.

Kim Hak-jun, a researcher at Kiwoom Securities, said, “W Games recorded good performance in the second quarter as well, showing that its strategy of maximizing profits through cost control is shining.” He added, “If it proves a new growth engine through iGaming (online casino) in the second half and secures growth potential through mergers and acquisitions (M&A), the undervaluation factor will be removed.”

Researcher Kim said, “According to W Games’ shareholder return policy, the estimated dividend per share (DPS) is expected to rise sharply from 1,000 won last year to 1,580 won this year, and considering the treasury stock buyback and burn policy, it is estimated that the resources used for shareholder return next year alone will be around 80 to 100 billion won.” He added, “In addition, if the treasury stock is not used as a resource for M&A by the end of the year, the company plans to burn half of the treasury stock it owns.”

Researcher Kim explained, “Despite showing a high profit growth rate compared to the previous year, the fact that it is not receiving a high value is believed to be due to the slowdown in the social casino market, which is a front-end industry.” He added, “Ultimately, it is believed that showing growth potential in the newly entered iGaming market and securing a new growth engine by utilizing the cash on hand (KRW 640 billion) will be important criteria for calculating the multiple.”