Hyundai Motor Securities has initiated coverage of Webzen, emphasizing the stock's downside support. The rationale cited includes a stable profit streak, low valuation, and future capacity for shareholder returns. However, the assessment notes that a mid- to long-term re-rating hinges on improving the company's image as a publisher and the performance of new titles.

■ Investment Opinion 'Market Perform,' Target Price 13,000 Won

On the 2nd, Hyundai Motor Securities initiated coverage of Webzen with an investment opinion of 'Market Perform' and a target price of 13,000 won.

Hyundai Motor Securities positively evaluated that while some competing game companies have slipped into losses amid aggressive investment expansion, Webzen has maintained profitability through efficient business operations.

In terms of valuation, the firm analyzed that Webzen's price-to-book ratio (PBR) remains low at around 0.5x within the game industry. It also judged that the company holds ample cash assets, giving it the financial capacity to continue policies such as mergers and acquisitions (M&A), equity investments, and shareholder returns.

■ Key to Re-Rating: 'Improving Publisher Image'

Improving its image as a publisher was cited as the core task for a further re-rating of the stock. The explanation is that reducing dependence on existing hit IPs and expanding the business portfolio through new genres and new titles will be the main variables for future changes in corporate value.

Regarding the new title pipeline, a large-scale mobile game based on the 'MU' IP slated for release in 2027 and 'GOG,' a subculture tower defense title, were mentioned as key anticipated releases. If new titles actually translate into user inflows and revenue growth, the market's assessment of Webzen's growth potential could also change.

■ Short-Term Downside Support... Mid- to Long-Term Hinges on New Title Performance

Ultimately, in the short term, shareholder returns and the low valuation are expected to support the stock's downside, while the mid- to long-term direction will likely be determined by the performance of new titles and whether publishing capabilities are strengthened.

[This article is an informational piece written based on publicly available market information and materials, and does not recommend buying, selling, or holding any specific stock. Stock investments may result in principal loss, and the final investment decision and responsibility rest with the investor. This article was written with AI assistance.]