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$GRVY – what to expect 2021?
Summary 2020
- Gravity posted strong results for Q3, with 70% top line growth and more than 200% profit growth
- The success of Next will be reflected in the coming quarters
- Enterprise value (EV/EBIT) for Q3 was around 7 which is 3,7 times...
Summary 2020
- Gravity posted strong results for Q3, with 70% top line growth and more than 200% profit growth
- The success of Next will be reflected in the coming quarters
- Enterprise value (EV/EBIT) for Q3 was around 7 which is 3,7 times...
...lower than similar stocks and gaming-industry in general
- Q4 will probably be a great quarter expected around $140-150m in revenue
- Their latest release (RO2 spear of Odin) is performing really well with great reviews – the game is developed in house which means higher..
- Q4 will probably be a great quarter expected around $140-150m in revenue
- Their latest release (RO2 spear of Odin) is performing really well with great reviews – the game is developed in house which means higher..
margins
- Pipeline is huge in 2021 with several releases (both new markets and new games) – Thailand is a main market going into 2021
- “Ragnarok – Eternal love”, “Ragnarok – Origin” and “Ragnarok – Next generation” is the majority of the revenue in 2020
- Pipeline is huge in 2021 with several releases (both new markets and new games) – Thailand is a main market going into 2021
- “Ragnarok – Eternal love”, “Ragnarok – Origin” and “Ragnarok – Next generation” is the majority of the revenue in 2020
- Still no debt and HUGE cash on hand around $150m-$170m
- Increasing self-developing which means higher margins
- Still no analyst coverage
- Smashed the game rankings (#1 in HK, Taiwan and Macau)
- Loyal fan base
- Increasing self-developing which means higher margins
- Still no analyst coverage
- Smashed the game rankings (#1 in HK, Taiwan and Macau)
- Loyal fan base
Release in china?
Since gravity is a South Korean company they cannot just release any game in China without permission. This is a political decision and can be long drown out. In 2021 there were only 3 Korean games approved to be submitted into china in 2020. This is not much...
Since gravity is a South Korean company they cannot just release any game in China without permission. This is a political decision and can be long drown out. In 2021 there were only 3 Korean games approved to be submitted into china in 2020. This is not much...
..but together with Tencent I think there is a fair chance of getting approval in 2021. This will be VERY bullish for a new potential market of 1,4b people. But it’s not something I expect, why SEA, Latin America and the Middle East is the main focus.
Why this setback in December 2020?
After seeing a huge run until 22 December a healthy pullback was needed. People taking profits into tax-season lowered down the stock price end December but nothing is changed. The case is intact and I think we will see $250 again in January.
After seeing a huge run until 22 December a healthy pullback was needed. People taking profits into tax-season lowered down the stock price end December but nothing is changed. The case is intact and I think we will see $250 again in January.
I believe it’s a great buying opportunity for people who didn’t catch the train at first. We are not done yet.
Future
Personally, I think gravity can grow 5x to 10x its revenue within 2 years in regard to the pipeline and the markets they will enter the next 1-2 years.
Personally, I think gravity can grow 5x to 10x its revenue within 2 years in regard to the pipeline and the markets they will enter the next 1-2 years.
This is without China taken into account. In the short term view I cannot see why gravity shouldn’t be 2x the share price of today after Q1 report release 2021. So I expect the SP to be $360 in summer 2021.
Origin will be launched in Japan H1 2021 and XNEXT in SEA H1 2021.
Origin will be launched in Japan H1 2021 and XNEXT in SEA H1 2021.
