Once priced at 1 million won, NC's stock claws back from historic collapse

"Can Korea's once-untouchable emperor stock make a comeback?"

NC, the South Korean game developer formerly known as NCsoft, is staging a recovery after a prolonged stretch of earnings deterioration and a devastating share price collapse.

Having turned its earnings around in the first quarter, the company is now drawing a wave of forecasts calling for a sharp acceleration in profit growth from the second quarter onward.

The share price, which had bottomed out, is also trending upward. On Thursday, NC shares closed at 277,000 won (about $182), up 7.16 percent from the previous session.

The scale of NC's earlier collapse was staggering. Once celebrated as an "emperor stock" — a term for blue-chip shares so coveted that investors were told to buy every dip without question — NC was the last company anyone expected to fall so far. Its share price, which had once exceeded 1 million won, plunged to the low 100,000-won range.

The freefall was driven by a shocking swing to losses. NC posted an operating loss of 109.2 billion won last year, its first deficit in 26 years.

Despite union opposition, the company carried out its first large-scale voluntary redundancy program in 12 years. It also rebranded for the first time in 29 years, dropping the NCsoft name in favor of the shortened NC.

Korea Investment & Securities said NC had successfully turned its earnings around as of the first quarter and saw strong potential for further growth, raising its target price by 25.8 percent to 390,000 won.

Analyst Jeong Ho-yun said the earnings slump that had persisted through last year had reversed course in the first quarter, and added that profit growth was expected to continue.

IBK Investment & Securities also raised its target price for NC, lifting it from 280,000 won to 390,000 won, citing strong game performance and the potential for AI business expansion as drivers of a full-scale earnings recovery.

Analyst Lee Seung-hun said in a research note that results from "Lineage Classic" and anticipation surrounding "Aion 2" were now feeding directly into the company's financials, and that both revenue and profitability were growing strongly.

NC posted sales of 557.4 billion won and operating profit of 113.3 billion won in the first quarter — results analysts described as a significant earnings surprise that far exceeded market expectations.

The company has also drawn attention recently after NC Chief Executive Kim Taek-jin met with Nvidia CEO Jensen Huang. Kim said NC had partnered with Nvidia since the early days of the Lineage series in the early 2000s, adding that "Lineage 2 contributed to Nvidia's success, and the relationship that began then has continued to this day."

Shinyoung Securities predicted that South Korean game stocks stood to benefit from Nvidia's rise. Analyst Kim Ji-hyun said the gaming industry would play a central role in providing the virtual reality infrastructure needed to train physical AI systems, and added that a revaluation of game companies such as NC and Krafton was warranted.