Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Equity Bottom-Up

<ul>
<li>In this insight, I discuss a pair trade idea (long Coway and short Netmarble) following Netmarble's announcement that it plans to acquire 2.083 million additional shares of Coway Co. </li>
<li>This acquisition would raise Netmarble's stake in Coway from 25.74% previously to 29.1%.</li>
<li>At the core of what's wrong behind Netmarble's acquisition of Coway has been that a game business has virtually no synergies with a home appliance business that provides air/water purifiers.</li>
</ul>


In this insight, I discuss a pair trade idea (long Coway and short Netmarble) following Netmarble's announcement that it plans to acquire 2.083 million additional shares of Coway Co. 
This acquisition would raise Netmarble's stake in Coway from 25.74% previously to 29.1%.
At the core of what's wrong behind Netmarble's acquisition of Coway has been that a game business has virtually no synergies with a home appliance business that provides air/water purifiers.


A Pair Trade Following Netmarble's Decision To Increase Its Stake in Coway

Cross Asset Strategy

<ul>
<li>Now that Lee Jae-Myung has become new South Korean President, the uncertainty revolving who will lead South Korea in the next five years is now over.</li>
<li>In this insight, we discuss four investment themes (related to Lee Jae-Myung becoming the new South Korean President) that could outperform the market for the remainder of 2025.</li>
<li>The four investment themes include Korean Holdcos/Quasi Holdcos, Korean Cultural Contents, Securities, and SK Group Companies.</li>
</ul>


Now that Lee Jae-Myung has become new South Korean President, the uncertainty revolving who will lead South Korea in the next five years is now over.
In this insight, we discuss four investment themes (related to Lee Jae-Myung becoming the new South Korean President) that could outperform the market for the remainder of 2025.
The four investment themes include Korean Holdcos/Quasi Holdcos, Korean Cultural Contents, Securities, and SK Group Companies.


Lee Jae-Myung Becomes the New South Korean President - Four Investment Themes That Could Outperform

Equity Capital Markets

<ul>
<li>On 5 June, Shift Up announced that it will be postponing its IPO to July. The original book building period for the institutional investors was from 3 to 13 June.  </li>
<li>The final book building date has been postponed to 27 June. The subsequent public offering subscription for general investors was also postponed to 2 to 3 July.</li>
<li>A major investment positive of Shift Up is enormous initial success of Stellar Blade which was the best selling game in the U.S. and numerous other countries in April 2024. </li>
</ul>


On 5 June, Shift Up announced that it will be postponing its IPO to July. The original book building period for the institutional investors was from 3 to 13 June.  
The final book building date has been postponed to 27 June. The subsequent public offering subscription for general investors was also postponed to 2 to 3 July.
A major investment positive of Shift Up is enormous initial success of Stellar Blade which was the best selling game in the U.S. and numerous other countries in April 2024. 


Shift Up Delays the IPO and Stellar Blade Tops Number One Game in the US in April

External broker reports(aggregated public sources), Mirae Asset Securities

Mirae Asset Securities

External broker reports(aggregated public sources)

Mirae Asset Securities Co.,Ltd. provides comprehensive wealth management services. The Company offers fixed income securities brokerage, securities dealing, equity underwriting, and other services. Mirae Asset Securities also deals with mergers and acquisitions, foreign currency, and financial derivatives

<ul><li>For 3Q25, Netmarble posted revenue of W696bn (+8% YoY; in line with the consensus) and operating profit of W91bn (+39% YoY; 9% above the consensus).</li><li>The domestic success of the new title Vampir and the global launch of Seven Knights Re:Birth were the main growth drivers.</li><li>Vampir delivered revenue of W63bn (daily average of around W1.7bn), while Seven Knights Re:Birth recorded revenue of W84bn (daily average of around W900mn).</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

For 3Q25, Netmarble posted revenue of W696bn (+8% YoY; in line with the consensus) and operating profit of W91bn (+39% YoY; 9% above the consensus).The domestic success of the new title Vampir and the global launch of Seven Knights Re:Birth were the main growth drivers.Vampir delivered revenue of W63bn (daily average of around W1.7bn), while Seven Knights Re:Birth recorded revenue of W84bn (daily average of around W900mn).Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Netmarble (251270 KS/Buy)Another Earnings Surprise Likely in 4Q25

<ul><li>Vampir (released on Aug. 26) appears to be off to a very strong start, remaining the topgrossing title in both major app stores as of Sep. 7.</li><li>Daily revenue was around W3bn upon launch and is currently running in the W2bn range. Because Android revenue data for Aug. 26-31 were not fully captured due to a reporting error, we estimated revenue during this period by applying the average Android/iOS ratio observed from Sep. 1 onward.</li><li>We raised our 3Q25 average daily revenue estimate for Vampir to W1.5bn (from W0.5bn) and lifted our 3Q25 operating profit forecast by 21% to W85bn (vs. consensus of W81bn).</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Vampir (released on Aug. 26) appears to be off to a very strong start, remaining the topgrossing title in both major app stores as of Sep. 7.Daily revenue was around W3bn upon launch and is currently running in the W2bn range. Because Android revenue data for Aug. 26-31 were not fully captured due to a reporting error, we estimated revenue during this period by applying the average Android/iOS ratio observed from Sep. 1 onward.We raised our 3Q25 average daily revenue estimate for Vampir to W1.5bn (from W0.5bn) and lifted our 3Q25 operating profit forecast by 21% to W85bn (vs. consensus of W81bn).Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

South Korea

Netmarble Corporation develops and publishes mobile games. The Company develops and publishes casual games, action, sports games, strategy, simulation games, and social casino games. Netmarble offers services worldwide.

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Netmarble (251270 KS)

A Pair Trade Following Netmarble's Decision To Increase Its Stake in Coway

In this insight, I discuss a pair trade idea (long Coway and short Netmarble) following Netmarble's announcement that it plans to acquire 2.083...

Douglas Kim

Lee Jae-Myung Becomes the New South Korean President - Four Investment Themes That Could Outperform

In this insight, we discuss four investment themes (related to Lee Jae-Myung becoming the new South Korean President) that could outperform the...

Douglas Kim

Shift Up Delays the IPO and Stellar Blade Tops Number One Game in the US in April

Shift Up announced that it will be postponing its IPO to July. A major investment positive is the enormous initial success of Stellar Blade which...

Douglas Kim