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(Source: W Games) |
[Alpha Biz= Reporter Kim Sangjin] Samsung Securities analyzed on the 13th that W Games' social casino growth rate slowed in Q3 (July–September) due to the off-season effect of increased outdoor activities. The brokerage downgraded its target price by 4.29% from 70,000 KRW to 67,000 KRW but maintained its "Buy" rating. This target price is 42.1% higher than the previous day's closing price of 47,150 KRW for W Games.
According to Samsung Securities, W Games reported Q3 revenue of 154.1 billion KRW, a 10.4% increase year-on-year, and operating profit of 59.5 billion KRW, up 10.0%.
Samsung Securities attributed the slower growth to a decline in social casino transaction growth, which fell from 8% in Q2 to 6.1% in Q3, due to increased outdoor activities associated with events like the U.S. presidential election. As a result, the firm adjusted its target price to reflect the slower revenue growth.
However, Samsung Securities expects a rebound in growth starting in Q4. The firm forecasts that aggressive marketing will drive a recovery in transaction growth, and the shift to Direct-to-Consumer (DTC) payments will gradually reduce payment processing fees.
Samsung Securities also noted that with major U.S. holidays like Thanksgiving and Christmas in Q4, sales growth is expected to rise by 11% compared to the previous year.
Additionally, Samsung Securities positively evaluated W Games' shareholder return efforts, stating that with potential global mergers and acquisitions (M&A) or share buybacks and cancellations planned for the year-end, there is significant room for further stock price growth.
Alphabiz Reporter Kim SangJin(letyou@alphabiz.co.kr)
