科乐美第四季度：世界杯及未来展望

Robin Zhu+852 2123 2659robin.zhu@bernsteinsg.com Charles Gou+852 2123 2618charles.gou@bernsteinsg.com Min-Joo Kang+852 2123 2644minjoo.kang@bernsteinsg.com Price Target 9766.JP 26,800 JPY(25,900OLD) Hyrum Caesar+81 3 6777 6979hyrum.caesar@bernsteinsg.com Konami Q4: The World Cup and beyond A strong end to FY3/26.JPY 141bn of Q4 revenue (+27.0% year on year) was a 9%beat compared with Bloomberg consensus on JPY129bn, while JPY105bn of DigitalEntertainment revenue was similarly ahead. eFootball revenue came in stronger than we’dmodelled, while JPY15.9bn of trading cards revenue was also a notable contributor tothe beat. JPY34.1bn of Q4 operating profit was c. 16% ahead of Bloomberg consensus(JPY29.4bn), and beat our JPY28.0bn estimate by a larger margin. eFootball revenue +50% in Q4.JPY40.7bn of eFootball revenue in Q4 was split across c.JPY33.7bn mobile, and JPY7bn console/PC. The aggregate figure was c. 50% higher versusa year ago, and c. 3% higher quarter on quarter. Most of the beat versus our JPY36.5bnestimate in Q4 will have fallen to Konami’s profit line. Meanwhile, it feels notable thateFootball billings (per the latest Sensor Tower data) accelerated meaningfully in April andMay, after the end of the financial year. The company’s FY3/27E guidance (pointing to 7%operating profit growth in FY3/27E) was boilerplate, explicitly ignores the likely World Cupbump for eFootball, and is probably therefore best disregarded. Konami guided for 4%growth in FY3/26 and delivered +33%. Growth beyond the World Cup.Konami management noted that eFootball DAUsdoubled during the 2022 World Cup, and that there were “significant expectations” for thetournament next month… as well as user retention ex post. Football continues to grow ina variety of new markets, which we expect will support Konami’s medium-term expansion.The meandering performance of Konami’s shares year to date - despite strong businesstrends - has been cause for a fair bit of investor frustration. But we’d expect continuedupward revisions to continue to support the stock. Look further out to 2027, and we expectGoogle’s platform fee cuts to contribute 5-6% to Konami’s normalized earnings, on top of thecompany’s own off-platform monetisation efforts. Investment ImplicationsWe rate Konami Outperform (PT JPY26,800). DETAILS A STRONG END TO FY3/26… NEXT THE WORLD CUP Konami's Q4 FY3/26 results were strong, with both revenue and operating profit beating consensus. Q4 revenue of JPY141bn(+27.0% year on year) was c. 9.2% beat of street consensus (JPY129bn). Digital Entertainment revenue hit JPY105bn, whichbeat by a similar margin. Konami gross profit reached JPY70.0bn, and implied a 49.8% margin that was 320bps higher year onyear. JPY34.1bn of operating profit was more than double year on year, compared with a very low comp, and was 15.8% aheadcompared with consensus on JPY29.4bn. Breaking down the Digital segment, mobile revenue (JPY62.4bn, +36% year on year) was higher versus our JPY56.2bn estimate(mainly on account of eFootball), while console/PC revenues (JPY25.5bn, +47% year on year) actually grew faster. Trading cardrevenue (JPY15.9bn, +31% year on year) saw a sequential rebound after weaker sales in Q3, driven by the Limit Over Collectiondebut. Konami pointed to JPY41bn of total eFootball revenues in Q4, split JPY34bn and JPY7bn across console/PC and mobile. Updating our estimates for Konami, raising PT We've updated our estimates for Konami to reflect Q3 reporting, and the latest high-frequency data for the company’s variousgames. Overall our estimates are moderately higher versus prior levels. Our revised Konami price target of JPY 26,800reflects a 26x target FY+1 (i.e. quarter 5-8) PE multiple, rolled forward by one quarter. Guidance from management on the Q4call sounded confident, and the company remains in the ascendancy in our view. eFootball growth aside, we’re hopeful thecompany's plans to revitalise its IP portfolio (e.g. Silent Hill, Castlevania) can bear fruit, and drive earnings upside. Exhibit 1and Exhibit 2 show summaries of Konami's Q3 results, and comparisons with our estimates and consensus. Exhibit 3shows a summary of our estimate changes. Q3 FY3/26 REPORTING IN CHARTS Exhibit 4 to Exhibit 9 show a selection of charts which summarise Konami's December quarter print, and prior quarterly trends. EXHIBIT 5:Digital Entertainment operating profitreached JPY34.1bn, implying a 24.2% margin EXHIBIT 4:Konami revenue was JPY140.6bn in theDecember quarter, 27.0% higher year on year Source: Corporate reports and Bernstein analysis. EXHIBIT 9:In-game purchase revenue reached JPY10.2bnwith a YoY rise of 20% APPENDIX - FINANCIAL FORECASTS BERNSTEIN TICKER TABLE I. REQUIRED DISCLOSURES References to "Bernstein" or the “Firm” in these disclosures relate to the following entities: Bernstein Institutional Services LLC(April 1, 2024 onwards), Sanford C. Bernstein & Co., LLC (pre April 1, 2024), Bernstein Autonomous LLP, BSG France S