Julie Lee

Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/nexon-co-ltd" target="_blank" data-smartkarma-citation="entities:16032:1" rel="noopener">Nexon (3659 JP)</a> share price was up 17.2% on October 23 due to the news that it will be included in Nikkei 225 from October 29, 2020.  Its share price had been subdued since its delay of launching "DNF mobile" in China in August. While the company mentioned the game release would be in a matter of weeks during one of the conferences in September, there is no launching schedule announced yet.  The street is already expecting lower than expected earnings for 3Q20 due to the delay of "DNF mobile" in China and it is expected to meet lowered street's 3Q20 earnings thanks to the success of  "The Kingdom of the Winds" in Korea. However, without "DNF mobile", its 4Q20 earnings outlook can be muted given heightened competition in Korea from new games such as "Genshin Impact" and "R2M". </p>
<p>Global game market remained strong in 3Q20 even after lockdown had been eased. Mobile game market grew 20% YoY and 5% QoQ to US$20bil according to App Annie.  Thus, we maintain our positive long term view on the gaming industry and, despite challenging near term outlook, <a href="https://www.smartkarma.com/entities/nexon-co-ltd" target="_blank" data-smartkarma-citation="entities:16032:1" rel="noopener">Nexon (3659 JP)</a> is expected to deliver solid long term growth through transformation of its PC games to mobile games and console games and potential M&amp;As. </p>

Nexon (3659 JP) share price was up 17.2% on October 23 due to the news that it will be included in Nikkei 225 from October 29, 2020.  Its share price had been subdued since its delay of launching "DNF mobile" in China in August. While the company mentioned the game release would be in a matter of weeks during one of the conferences in September, there is no launching schedule announced yet.  The street is already expecting lower than expected earnings for 3Q20 due to the delay of "DNF mobile" in China and it is expected to meet lowered street's 3Q20 earnings thanks to the success of  "The Kingdom of the Winds" in Korea. However, without "DNF mobile", its 4Q20 earnings outlook can be muted given heightened competition in Korea from new games such as "Genshin Impact" and "R2M". 
Global game market remained strong in 3Q20 even after lockdown had been eased. Mobile game market grew 20% YoY and 5% QoQ to US$20bil according to App Annie.  Thus, we maintain our positive long term view on the gaming industry and, despite challenging near term outlook, Nexon (3659 JP) is expected to deliver solid long term growth through transformation of its PC games to mobile games and console games and potential M&amp;As. 

Updates on Nexon and Mobile Game Market in 3Q20