Portfolio Manager/Head of Equity Investment, Tandem Investors Limited

Jason Oh

Portfolio Manager/Head of Equity Investment

Tandem Investors Limited

Equity Bottom-Up

Pioneer of the mobile game in Korea even before the emergence of smartphone  <a href="https://www.smartkarma.com/entities/13102" target="_blank" data-smartkarma-citation="entities:13102:1">Com2us Corp (078340 KS)</a> is one of the major mobile game developer and publisher in Korea. Due to the industry initiative even before the emergence of the smartphone, the company has been the market leader and pioneer in many aspects. The company's strength is on the optimization and operating experiences specialized in the mobile platform, where the resources are limited. Based on the domestic success with Baseball and Fishing game, the company successfully penetrated into the global market by its flagship RPG game, named 'Summoners War', posting over 70mn download and USD 800mn revenue since 2015.The Cheapest Mobile Game stock on the planet  The company's shares are trading on absurd valuation around 3.5x of P/E excluding cash on hand, amounting over USD 500mn as of 3Q16, accounting for about 55% of the market cap. Allegedly, there are some reasons such as 1) short life cycles of the mobile games, 2) stake overhang of KBAM, 3) corporate governance issue related to no dividend payout in the past. We believe the worries are overdone and the discount is rootless given the description below. We expect the discount to narrow down as the company shows the counterproofs to nullify the worries.It's time to see the real growth story in the mobile game industry  The mobile game industry's growth was highly underrated due to short life cycles of the games and thereby uncertainty on the sustained growth. However, as the capacity of the platform increases, the recent introduction of RPGs(Role Playing Games), such as 'Summoners War' of the company and 'Lineage' of <a href="https://www.smartkarma.com/entities/22839" target="_blank" data-smartkarma-citation="entities:22839:1">Netmarble Games Corp (0965576D KS)</a> , will be the catalyst to re-rate the potential, due to stickiness and scalability of RPGs. In addition, the penetration of on-line players into mobile market won't be easy, given the NCSoft's licensing to Netmarble in 'Lineage II: Revolution'.

Pioneer of the mobile game in Korea even before the emergence of smartphone  Com2us Corp (078340 KS) is one of the major mobile game developer and publisher in Korea. Due to the industry initiative even before the emergence of the smartphone, the company has been the market leader and pioneer in many aspects. The company's strength is on the optimization and operating experiences specialized in the mobile platform, where the resources are limited. Based on the domestic success with Baseball and Fishing game, the company successfully penetrated into the global market by its flagship RPG game, named 'Summoners War', posting over 70mn download and USD 800mn revenue since 2015.The Cheapest Mobile Game stock on the planet  The company's shares are trading on absurd valuation around 3.5x of P/E excluding cash on hand, amounting over USD 500mn as of 3Q16, accounting for about 55% of the market cap. Allegedly, there are some reasons such as 1) short life cycles of the mobile games, 2) stake overhang of KBAM, 3) corporate governance issue related to no dividend payout in the past. We believe the worries are overdone and the discount is rootless given the description below. We expect the discount to narrow down as the company shows the counterproofs to nullify the worries.It's time to see the real growth story in the mobile game industry  The mobile game industry's growth was highly underrated due to short life cycles of the games and thereby uncertainty on the sustained growth. However, as the capacity of the platform increases, the recent introduction of RPGs(Role Playing Games), such as 'Summoners War' of the company and 'Lineage' of Netmarble Games Corp (0965576D KS) , will be the catalyst to re-rate the potential, due to stickiness and scalability of RPGs. In addition, the penetration of on-line players into mobile market won't be easy, given the NCSoft's licensing to Netmarble in 'Lineage II: Revolution'. 

Com2us: The Cheapest Mobile Game Company on the Planet