On Wednesday, Goldman Sachs initiated coverage on SHIFT UP Corp (462870:KS) stock, the South Korean online games developer, with a Buy rating and a price target of KRW85,000.00. The investment firm's outlook suggests a 29% upside from the company's current valuation.
SHIFT UP, led by the esteemed game character designer Hyung-Tae Kim, has garnered attention for its rapid success in the gaming industry, producing popular titles like "Goddess of Victory: Nikke" in 2022 and "Stellar Blade" in 2023. These games have achieved significant popularity across various regions and platforms.
The analyst from Goldman Sachs highlighted the company's approach to monetization, which steers away from the controversial pay-to-win model, as a positive aspect. This strategy, combined with the company's focus on aesthetic excellence—a trait influenced by founder Hyung-Tae Kim—is believed to give SHIFT UP a competitive edge in game development.
Furthermore, the firm's success with "Nikke" within the sub-culture category is indicative of its strength in storytelling. This is seen as a particularly impressive feat during a period when many Korean developers have struggled to produce major global hits.
Goldman Sachs anticipates a strong growth trajectory for SHIFT UP, based on the performance of its established intellectual properties (IPs). The company is expected to achieve this growth with minimal investment requirements, which is advantageous in the current market environment where established games tend to have a competitive edge due to heightened competition.
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