Kakao Games Corp (293490 KQ)

研报英文原文证据摘录

Kakao Games Corp (293490 KQ)

ible positive ROE (%) -7.5 -3.7 3.0 2.9

outcomes: 1) a financial status improvement (we expect the net debt position of

52-WEEK PRICE (KRW)KRW145bn in 2025 to turn into a net cash position of KRW95bn in 2026e), 2) game

development studio expansion to reinforce the core publishing business, and 3) a 20000

shareholder return policy improvement, given the recent disclosure about the plan to 12750

table a proposal at an extraordinary general meeting (date has not been confirmed)

to reduce capital reserves and transfer them into retained earnings. Of note, the amount 07/25 01/26 07/265500

of additional paid-in capital was KRW1.5trn as at 1Q26. Target price: 8000 High: 17760 Low: 6930 Current: 7650

Lingering uncertainties. Despite the possibility of a potential value upgrade, driven

Source: LSEG IBES, HSBC estimates

by the governance change, the reasons why we have a cautious view are: 1) unproven

core publishing competitiveness, 2) uncertain new blockbuster game launch timing,

Junhyun Kim*

and 3) low visibility on effective M&A execution, given its historical record. Additionally, Analyst, Korea Internet Gaming and Entertainment

given the past IPO attempt of Lionheart Studio, one of Kakao Games’ game The Hongkong and Shanghai Banking Corporation

Limited, Seoul Securities Branch

development subsidiaries popular for ODIN IP, with no stated policy on subsidiary junhyun.kim@kr.hsbc.com

listing, we see a structural overhang. Kakao Games’ headquarters operates as a +82 2 3706 8763

publisher rather than as a developer, the market may be concerned that even a major

hit from a subsidiary development studio would raise the prospect of a separate listing, * Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is