Earnings Surprise on Korea Invest Insights

Pearl Abyss 1Q26 Comprehensive — OP ₩212.1bn (+48% Above Consensus), 64.6% Margin. Company's First-Ever Guidance Sets FY26 OP at ₩487.6-572.6bn

Tue, 12 May 2026 18:00:00 +0900

📚 Pearl Abyss Series — 1Q26 Comprehensive Edition. Earlier: Earnings Preview (4/21) — Revenue ₩395.0bn / OP ₩205.0bn Central Estimate Earlier: Earnings-Week Setup (5/11) — Consensus ₩143.5bn but Likely ₩250bn+ Actual

🔗 Related: Pearl Abyss Hub — 263750 Price / Target / Crimson Desert Analysis · CCP / EVE Divestment · Shinhan Target-Price Gap Analysis Follow-up: Pearl Abyss May 21 IR Watch — Capital Return, DLC and DokeV Decide the Next Re-Rating

Pearl Abyss released 1Q26 earnings together with its first-ever quantitative annual guidance. The headline: OP ₩212.1bn beat consensus by +48%, and the company set FY26 OP at ₩487.6-572.6bn. 2Q Crimson Desert revenue guidance of ₩224.2-276.5bn (-16% to +4% vs. 1Q) directly rebuts the market’s “1Q boom → 2Q cliff” fear. The arithmetic that has to land for the guidance to be confirmed is still ahead.

TL;DR

1Q26 print. Revenue ₩328.5bn, OP ₩212.1bn, NI ₩158.0bn. OPM 64.6%. OP +48% above consensus (₩143.5bn).
FY26 company guidance. Operating revenue ₩879.0-975.4bn, OP ₩487.6-572.6bn, OPM 55.5-58.7%. Materially above the implicit pre-print market expectation (~₩410bn).
2Q guidance. Crimson Desert revenue ₩224.2-276.5bn — -16% to +4% vs. 1Q’s ₩266.5bn. Plateau, not cliff.
Why the surprise. Not primarily a revenue beat — it’s a light cost base. R&D was already expensed in prior quarters, marketing was efficient, and the revenue-recognition method (net / blended) deducted platform fees from revenue rather than booking them as expense.
Vs. prior predictions. Preview’s ₩395.0bn revenue ran 17% too high; OP ₩205.0bn ran 3% too low. Revenue-mix-recognition assumption was wrong, but the OP direction was correct.
What to watch next. May 21-22 institutional NDR, the 6M-unit announcement timing, whether 2Q lands inside the company range, and DLC / platform-extension scheduling.

1. Today’s disclosed numbers — exact figures

1.1 1Q26 preliminary earnings

Item	Amount
Revenue (operating revenue)	₩328.499bn
Operating profit	₩212.096bn
Continuing-operations net income	₩170.0bn
Final net income (incl. discontinued-operations loss)	₩157.969bn
Operating margin	64.6%
Net margin	48.1%
Implied operating expenses	₩116.4bn

Cross-check: OPM = 212.096 / 328.499 = 64.6% ✓

Why two NI figures: Pearl Abyss completed the divestiture of CCP Games (developer of EVE Online) on May 6. The CCP-related loss (₩-12.0bn) was reclassified into “discontinued operations.” For the operating economics of the business that remains, use continuing-operations NI ₩170.0bn; for shareholder-attributable NI, use ₩158.0bn.

1.2 Revenue by game

Game	1Q revenue	Share
Crimson Desert	₩266.5bn	81%
Black Desert	₩61.6bn	19%
Total	₩328.1bn	100%

Crimson Desert alone produced 81% of total revenue — from just 12 days of sales (March 20-31).

1.3 Revenue by region and platform

Region	Share
Americas / Europe	81%
Asia	13%
Korea	6%

Platform	Share
PC	59%
Console	38%
Mobile	3%

Confirmed by the geographic distribution: Crimson Desert is a Western-PC-and-console global hit. 81% from the Americas / Europe is unusual for a Korean game studio — most Korean titles lean heavily Asia.

1.4 Vs. consensus

Item	Consensus	Actual	Diff
Revenue	₩311.9bn	₩328.5bn	+5.3%
Operating profit	₩143.5bn	₩212.1bn	+47.8%
Net income	₩110.4bn	₩158.0bn	+43.1%

Small revenue beat (+5%), very large OP beat (+48%). The asymmetry is the story.

1.5 Vs. comparable periods

Comparison	Revenue	OP
YoY (1Q25)	+293%	Loss ₩-5.2bn → Profit ₩212.1bn
QoQ (4Q25)	+244%	Loss → Profit

One title repositioned the entire company in a single quarter.

2. What earlier predictions got right and wrong

2.1 Vs. the Earnings Preview (April 21)

Item	Preview	Actual	Diff
Revenue	₩395.0bn	₩328.5bn	-16.8%
OP	₩205.0bn	₩212.1bn	+3.5%
OPM	51.9%	64.6%	+12.7pp

Revenue was overpredicted by 17%; OP was under-predicted by 3%; OPM gap was 13 percentage points.

The source of the contradiction: revenue-recognition method.

2.2 Revenue recognition — the preview’s key assumption was wrong

Game-revenue accounting has two methods. Per company disclosure:

Console (PlayStation / Xbox): platform fee is deducted first, with the residual booked as revenue
PC (Steam, etc.): user payment is booked net of sales tax
Offline packaging: contract terms produce booked revenue below actual unit sales

The preview leaned more heavily on gross-recognition assumptions (platform fees in revenue, then out as expense). Console turned out closer to net (fee out first). Result: lower revenue line, but fewer fees in expenses → higher reported margin.

2.3 Per-unit recognized revenue — revised

Reverse-engineering Crimson Desert’s 1Q revenue ₩266.5bn against the official ~4M unit count:

Per-unit recognized revenue = ₩266.5bn ÷ 4M = \~₩66,625/unit

Cross-check: 66,625 × 4M = ~₩266.5bn ✓

Lower than the preview’s gross assumption of ₩80,000/unit and higher than the Earnings-Week Setup post’s working estimate of ₩58,000/unit (which had baked in EVE-inclusive legacy revenue, producing some drift).

Revised conclusion: per-unit recognized revenue ~₩66,625. Neither full gross nor full net — a blended structure.

2.4 Did the Earnings-Week Setup’s read hold?

The week-of post said: “Consensus is ₩143.5bn but actual could be ₩250bn+.” Actual was ₩212.1bn — well above consensus, but below the optimistic broker estimates (Shinhan ₩254.7bn, Meritz ₩275.2bn).

The “highest surprise probability of the week” call was correct in direction, lower in magnitude than the upper-end broker estimates.

3. Why the OP surprise — by cost line

3.1 Operating expense detail

From the company’s 1Q26 IR Letter:

Item	Amount	vs. revenue	vs. prior quarter
Labor	₩38.4bn	11.7%	+29%
Platform fees / payments	₩42.5bn	12.9%	+193%
Marketing	₩23.4bn	7.1%	+152%
Depreciation	₩2.4bn	0.7%	-4%
Other	₩9.7bn	3.0%	-14%
Total	₩116.4bn	35.4%	+73%

3.2 Three reasons for OPM 64.6%

Reason 1: R&D already expensed in earlier quarters.

Crimson Desert was developed over multiple years. Most development costs were already booked to prior-period expense. After launch, revenue rises sharply while incremental development cost is small. Depreciation at just 0.7% of revenue reflects this.

Analogy: a factory built over 5 years has already absorbed its construction cost. When the factory starts production, revenue appears with no fresh construction expense → margin spikes.

Reason 2: Marketing was efficient.

Marketing spend ₩23.4bn against Crimson Desert revenue ₩266.5bn = 8.8%. Low for a launch quarter. Word-of-mouth pull was strong online; the company didn’t need to flood TV / outdoor with launch ads.

Reason 3: Revenue-recognition method shrinks the apparent fee rate.

Platform fees ₩42.5bn against revenue ₩266.5bn = 12.9%. That looks low, but it’s because console revenue is recognized net of platform fees. The total fees Pearl Abyss actually pays platforms is higher; accounting just doesn’t capture all of it on the expense line.

3.3 The core — the cash earned is real

Combining the three reasons: revenue-recognition produces a “higher-looking margin” optical effect, but the actual dollars earned (OP ₩212.1bn, NI ₩158.0bn) are strong regardless of recognition method. Accounting choice doesn’t change the cash itself.

4. Company guidance — why first-time numbers matter

4.1 Pearl Abyss issued quantitative guidance for the first time

Quantitative annual OP ranges from Korean game studios are rare. This is the first.

FY26 guidance:

Item	Range
Operating revenue	₩879.0-975.4bn
Black Desert	₩234.9-240.6bn
Crimson Desert	₩644.1-734.8bn
Operating expenses	₩391.4-402.8bn
Operating profit	₩487.6-572.6bn
Operating margin	55.5-58.7%

2Q guidance:

Item	Range
Operating revenue	₩271.3-324.7bn
Black Desert	₩47.1-48.2bn
Crimson Desert	₩224.2-276.5bn
Operating expenses	₩141.7-148.0bn
Operating profit	₩129.6-176.7bn
Operating margin	47.8-54.4%

4.2 Why these numbers matter

One: the company directly rebutted the 2Q-cliff concern.

The market’s biggest worry was the package-game pattern — concentrated revenue in launch quarter, sharp drop after.

Company’s 2Q Crimson Desert revenue: ₩224.2-276.5bn. 1Q Crimson Desert revenue: ₩266.5bn.

2Q change:
Low end: 224.2 / 266.5 - 1 = -15.9%
High end: 276.5 / 266.5 - 1 = +3.8%

-16% to +4% — plateau, not cliff. If the company is seeing this trajectory in internal sales data, the “1Q one-off” narrative weakens.

2Q OP is guided ₩129.6-176.7bn, below 1Q’s ₩212.1bn. The reason isn’t the business — it’s performance-bonus accrual. The company expects 2Q labor cost to roughly double vs. 1Q. Revenue holds; cost rises; OP falls. That’s expense structure, not a business deceleration.

Two: FY26 OP ₩487.6-572.6bn is well above prior market expectation.

Against the implicit pre-print expectation (~₩410bn):

Low end ₩487.6bn - prior ₩410bn = +₩77.6bn (+19%)
High end ₩572.6bn - prior ₩410bn = +₩162.6bn (+40%)

This isn’t just “good print” — it’s a signal that annual earnings estimates themselves need to lift. As sell-side updates models, the starting point of valuation work — including the earlier Shinhan target-price gap — shifts.

4.3 Can guidance be trusted at face value?

The company explicitly flagged: “This guidance is based on current estimates under an uncertain operating environment, and actual results may differ materially from the figures shown.”

For guidance to be realized:

Crimson Desert needs to keep selling at 500K+ units/month through the second half
Major updates / discount events need to sustain sales
Operating costs need to stay within the guided ₩391.4-402.8bn range

Any one breaking can pull the print below even the low end.

5. Lessons from the prediction series

5.1 What was right

Earlier analysis	Confirmed
1Q OP could exceed ₩200bn	✓ ₩212.1bn
OPM ≥45% was the key check line	✓ 64.6%
Revenue-recognition is the central variable	✓ Company confirmed blended recognition
Cost structure might be lighter than expected	✓ Operating expenses at 35.4% of revenue
Earnings-Week’s “highest surprise probability” call	✓ OP beat consensus by +48%

5.2 What needs revision

Earlier assumption	Revised
Revenue ₩395.0bn (gross-recognition lean)	→ Actual ₩328.5bn. Console net, PC net-of-tax. -17% gap
Legacy-game revenue ₩90-97bn (EVE included)	→ EVE classified as discontinued. Continuing-basis legacy = Black Desert ₩61.6bn
Per-unit recognized revenue ~₩80,000 (gross)	→ Actual ~₩66,625 (blended)
FY26 OP expectation ~₩410bn	→ Company guidance ₩487.6-572.6bn. Raise required

5.3 Lesson

Revenue-recognition method is the hardest-to-forecast variable in game-company analysis. Same units sold and same price can produce 30%+ revenue differences depending on accounting choice. OP, however, is much less variable across methods — that’s why the OP direction was right even when revenue was wrong.

6. Valuation — updated against company guidance

6.1 EPS estimates

Shares outstanding 64,247,855. Post-tax conversion ratio (OP → NI) assumed 70-75% based on 1Q actual (~74.5%) plus tax-rate and discontinued-operations effects.

Scenario	FY26 OP	Tax conversion	NI	EPS
Bear (guidance low end)	₩487.6bn	70%	₩341.3bn	₩5,313
Base (guidance midpoint)	₩530.1bn	72.5%	₩384.3bn	₩5,982
Bull (guidance high end)	₩572.6bn	75%	₩429.5bn	₩6,685

Cross-check: Base EPS = 384.3 / 64.248M = ₩5,982 ✓

6.2 What the current price implies

May 12 close ₩52,800:

Scenario	EPS	Current-price PER
Bear	₩5,313	9.9×
Base	₩5,982	8.8×
Bull	₩6,685	7.9×

Current price implies PER 8.8× on the guidance midpoint. That looks low. The market discounts the multiple because of one concern: repeatability — what if 2026 earnings are a one-off Crimson Desert launch year?

6.3 PER × scenario grid (reference)

EPS scenario	PER 10×	PER 12×	PER 14×	PER 15×
Bear ₩5,313	₩53,100	₩63,800	₩74,400	₩79,700
Base ₩5,982	₩59,800	₩71,800	₩83,700	₩89,700
Bull ₩6,685	₩66,800	₩80,200	₩93,600	₩100,300

This is “EPS scenario × PER multiple” arithmetic. PER 10× is closer to “single-package one-off” framing; PER 15× requires recognition as “a studio capable of running multiple successful titles.” Which multiple the market awards depends on 2Q guidance delivery, sales persistence, and DLC / platform-extension announcements.

7. Forward price triggers — by sequence

7.1 Near-term — sell-side EPS revisions (this week to next)

With print and guidance now public, sell-side models revise. Since company guidance (₩487.6-572.6bn) sits well above the prior market expectation (~₩410bn), EPS upgrades and target-price upgrades are likely.

Price tends to respond to FY26 EPS revision magnitude more than report headlines.

7.2 May 15 — 1Q quarterly filing

The full filing on DART includes cost-line detail, revenue-recognition footnotes, and balance-sheet detail. This is the key source for distinguishing “structurally light cost” from “temporarily deferred cost.”

7.3 May 21-22 — Meritz Securities NDR (Non-Deal Roadshow)

Yeouido-based 1:1 and group meetings with domestic institutions. First major opportunity for institutional models to update post-print. Post-NDR institutional flow can reset the share-price level.

7.4 May-June — 6M unit announcement

Official latest unit count is 5M (April 15). Acceleration to 6M strengthens guidance credibility. Hitting FY26 Crimson Desert guidance (₩644.1-734.8bn) requires sustained add-on sales.

7.5 August — 2Q earnings

The single most important trigger. Delivering 2Q guidance (OP ₩129.6-176.7bn) weakens the “1Q one-off” narrative significantly. Missing the low end damages guidance credibility.

7.6 TBD — DLC / platform expansion

Pearl Abyss stated: “Researching ways to extend the game into different dimensions, including DLC.” Not a confirmed plan yet, but on-record. A paid expansion materially extends sales-cycle longevity — CD Projekt Red’s Blood and Wine expansion (Witcher 3) launched ~18 months post-base and re-extended the title’s revenue curve as a comparable reference.

Pipeline titles (DokeV in pre-production, Plan 8 in concept iteration) remain long-dated options. Premature to load them into base-case valuation.

7.7 Trigger summary

Trigger	Timing	Importance
Sell-side EPS upgrade reports	This week to next	High
1Q quarterly filing (cost notes)	May 15	High
Meritz NDR (institutional model updates)	May 21-22	High
6M unit announcement	May-June	High
2Q earnings	August	Highest
DLC / platform-extension announcement	TBD	Long-term core

8. Investment-thesis update

8.1 Prior thesis

“Crimson Desert sells more than expected, and the market is slow to price it in.”

8.2 Updated thesis

“Pearl Abyss now has 1Q numbers that confirm Crimson Desert’s commercial trajectory and FY26 guidance that partially dismantles the 1Q-one-off concern. The current price is PER 8.8× on the guidance midpoint — still low. For the market’s residual doubt (‘is this earnings stream repeatable?’) to fully clear, 2Q sales persistence, the 6M unit milestone, and post-NDR institutional re-rating need to land. The real alpha resides in the window where that doubt resolves.”

8.3 Invalidation conditions

This thesis can break:

2Q Crimson Desert revenue undershoots the company-guidance low end (₩224.2bn) → cliff narrative returns
2Q OPM collapses below 45% → cost-control failure
6M-unit milestone meaningfully delays, Steam / console rankings deteriorate → sales-persistence damage
Pure single-package monetization with no DLC / update extension → no PER expansion path
DokeV / Plan 8 development schedule slips materially → multi-IP optionality fades

9. Bottom line

Pearl Abyss 1Q26 print is strong. OP ₩212.1bn, OPM 64.6%, +48% above consensus. The bigger development is FY26 guidance — OP ₩487.6-572.6bn, and 2Q Crimson Desert revenue at plateau (-16% to +4%) rather than cliff.

As the market absorbs the numbers, sell-side EPS upgrades, the May 21-22 NDR, and post-NDR institutional repositioning can compound. Current price ₩52,800 = guidance-midpoint PER 8.8× — arithmetically low.

But “looks low” becoming “confirmed undervaluation” requires verification — whether 2Q sales hold, whether 6M lands, whether costs stay within range. That sequence is what makes ₩70K-handle a reasonable level, and DLC / platform extension is what would unlock anything above. 1Q opened the door. What’s behind the door is determined by 2Q.

FAQ

Q: Is the 1Q OPM 64.6% sustainable? A: This margin mixes three effects: (1) prior-quarter R&D expense (structural, sustainable); (2) efficient launch-quarter marketing (partly one-off); (3) revenue-recognition method shrinking the apparent fee line (structural). The company’s 2Q guidance OPM is 47.8-54.4%, lower than 1Q because of performance-bonus accrual — not because the business decelerated.

Q: Should one fully trust the company guidance? A: The company explicitly flagged “estimates under uncertain operating environment.” For the guidance to be realized: (a) Crimson Desert needs to sustain 500K+ units/month through 2H, (b) major updates need to support sales, (c) costs need to stay within the guided range. That said, this is the company’s first quantitative guidance, and the 2Q range (-16% to +4% vs. 1Q) is conservative on the upper end, both of which add credibility.

Q: Why did consensus ₩143.5bn miss actual ₩212.1bn by so much? A: The consensus median was anchored in post-launch March estimates and hadn’t fully absorbed April sales data (5M units cleared) or the cost structure. Some sell-side estimates (Shinhan ₩254.7bn, Meritz ₩275.2bn) were closer to actual but the median update was slow.

Q: Revenue -17% from prior estimate but OP +3% — how? A: Revenue recognition. Console deducts platform fees from revenue first, so revenue is lower-looking but the fee line in expenses is also smaller. Margin lifts. The same business can show 30%+ revenue divergence depending on accounting choice.

Q: Why does 2Q OP guidance fall below 1Q despite revenue being held? A: Cost rises. The company expects 2Q labor cost to roughly double vs. 1Q — performance-bonus accrual on the 1Q print. Revenue holds at -16% to +4% but expense rises, so OP comes down. Not a business deceleration.

Q: Is PER 8.8× really cheap? A: It’s low against both the Korean-market average and global game-studio peers. But the market discounts the multiple for the “repeatability” question — if Crimson Desert becomes a single-package one-off, FY26 earnings won’t recur. PER 8.8× is the multiple the market awards under that doubt.

Q: Which trigger matters most? A: August 2Q earnings. Delivering the company guidance (OP ₩129.6-176.7bn) cleanly dismantles the “1Q one-off” narrative. Intermediate checkpoints are how May 21-22 NDR-driven institutional model updates land, and how the 6M-unit announcement paces between May and June.

Q: Among DokeV / Plan 8 / DLC, which matters first? A: Short term, DLC. The company explicitly stated on-record that “DLC and ways to extend the game into different dimensions” are under research. CD Projekt Red’s Witcher 3: Blood and Wine expansion, which extended the title’s revenue curve by 18+ months, is the comparable reference. DokeV and Plan 8 remain long-dated options not yet appropriate to load into base-case valuation.

This article is for research and informational purposes only and does not constitute investment advice. 1Q26 figures are from Pearl Abyss’s KIND (KRX) regulatory filing and 1Q26 Earnings Letter. Company guidance (FY26 and 2Q) is taken from the company’s IR materials, where the company explicitly states “based on uncertain estimates and actuals may differ materially.” Revenue-recognition method (console net / PC net-of-tax) is drawn from the company’s IR Letter narrative. Cost-line figures reference the IR Letter Appendix. CCP-divestment-related discontinued-operations loss is reflected in 1Q; cash-inflow effects flow more fully into 2Q. EPS / PER / scenario-grid in the valuation section are analyst estimates and may be incorrect. Analysis can be wrong. Data cut: May 12, 2026 KST.

Disclaimer: For research and information purposes only. Not investment advice. Names cited are for analytical illustration; readers should perform their own due diligence and consult licensed advisors before any investment decision.

Next Week's Korean Earnings Preview (May 11–15) — Largest Surprise Candidate Is Pearl Abyss. Consensus ₩143.5bn vs. Likely ₩250bn+ Actual

Sun, 10 May 2026 23:55:00 +0900

🔄 Post-print update (2026-05-12): Pearl Abyss 1Q26 OP came in at ₩212.1bn, beating consensus ₩143.5bn by +48%. This post’s “highest surprise probability” call held up. Detailed analysis, company guidance, and forward triggers are covered in the 1Q26 Comprehensive write-up.

Ten major Korean listed companies report Q1 2026 earnings during May 11–15. Where is the largest gap between FnGuide consensus and likely actual? Pearl Abyss tops the list. Consensus operating profit is ₩143.5bn; some sell-side estimates run ₩254.7–₩275.2bn — a +75–92% gap. Crimson Desert sold 4 million units within 12 days of launch (March 20) and 5 million units within 26 days, with the bulk of Q1-attributable revenue landing in the period. This isn’t “modest beat” territory — it’s “consensus is structurally wrong” territory.

TL;DR

Largest surprise candidate: Pearl Abyss. FnGuide consensus 1Q26 OP ₩143.5bn vs. Shinhan Investment ₩254.7bn / Meritz Securities ₩275.2bn — +75–92% gap. Crimson Desert’s 3.0–3.8 million Q1-attributable units lump into a single quarter’s P&L.
#2: SK Innovation. Consensus OP ₩2.05tn; some sell-side runs ₩2.5tn–₩3.8tn. But the gap is largely one-time (refinery margin + inventory-revaluation gains), so the market may discount the surprise as non-recurring.
#3: Mirae Asset Securities. Q1 daily KOSPI turnover ₩45.3tn (+147% YoY). Strong earnings highly probable, but turnover is publicly observable so consensus has already adjusted — the surprise size is limited.
Lotte Chemical = downside-surprise candidate. Consensus operating loss -₩20.3bn likely understates naphtha-cost pressure (some forecasts go to -₩121.8bn loss, 6× wider). Pre-print chasing is inefficient.
KT&G has already reported. May 7 print: OP ₩364.5bn, +6.5% above consensus.
Most rational positioning. Wait for the print, then react to consensus revisions and order-flow response — rather than betting ahead of release.

1. Next week’s earnings calendar — 10 names at a glance

Date	Company	20-day return	FnGuide consensus OP	Watch point
5/11 Mon	Lotte Shopping	+28.8%	₩207.5bn	Department-store recovery durability
5/12 Tue	Mirae Asset Securities	+17.6%	₩1.357tn	Brokerage-rally validation
5/12 Tue	Hanwha Life	-0.4%	n/a	Why insurers underperform peers
5/12 Tue	Pearl Abyss	-7.1%	₩143.5bn	Crimson Desert P&L impact
5/13 Wed	SK Innovation	+11.9%	₩2.05tn	Refining surge + battery turn
5/13 Wed	KT&G	+14.2%	₩342.1bn	(reported May 7: ₩364.5bn)
5/14 Thu	Samsung F&M Insurance	+6.6%	₩846.6bn	Sector flagship; payout policy
5/15 Fri	Lotte Chemical	+9.1%	-₩20.3bn	Chemicals-recovery test; downside risk
5/15 Fri	DB Insurance	-1.9%	₩452.4bn	Relative attractiveness vs. Samsung F&M
5/15 Fri	CJ Corporation	+13.5%	₩567.2bn	Olive Young value capture

(Consensus from FnGuide. 20-day returns as of May 8.)

2. Surprise ranking — who is most likely to break consensus

2.1 What produces a true surprise

Earnings surprises require a specific structure: a publicly observable leading indicator that consensus has not yet absorbed.

Filtering the 10 names through that lens:

Observable + un-incorporated (high surprise probability):
→ Pearl Abyss (Steam unit-sales tracking real-time, sell-side updates lag)
→ Mirae Asset Securities (daily turnover disclosed, consensus assumptions trail)

Hard to observe + uncertain (direction unclear):
→ SK Innovation (refining-margin volatility, one-time inventory gains)
→ Lotte Shopping (no real-time department-store sales feed)
→ CJ Corporation (Olive Young is private, complex consolidation)

Structural headwind (downside-surprise risk):
→ Lotte Chemical (rising naphtha cost)
→ The 3 insurers (auto-insurance loss-ratio deterioration)

2.2 Composite ranking

Rank	Name	Surprise probability	Direction	Core rationale
1	Pearl Abyss	Very high	Up	Consensus ₩143.5bn vs. likely ₩250bn+
2	SK Innovation	High	Up	Refining margin + inventory gain. But one-time
3	Mirae Asset Securities	Medium-high	Up	Turnover surge clear, but already in consensus
4	Lotte Shopping	Medium	Modest up	Solid print but only ~+2% above consensus
5	CJ Corporation	Medium-low	Mixed	Olive Young positive offsets CJ CheilJedang weakness
—	Lotte Chemical	Medium	Down	Consensus -₩20.3bn loss may be too optimistic
—	Insurers (3)	Low	Neutral	Auto-insurance loss-ratio drag. Print less important than payout

3. Pearl Abyss — the largest surprise candidate

3.1 Why consensus runs so low

Pearl Abyss 1Q26 consensus OP is ₩143.5bn. Some sell-side runs much higher:

Broker	1Q26 OP estimate	Vs. consensus
Consensus (median)	₩143.5bn	—
NH Investment (early March)	₩78.6bn	-45%
Shinhan Investment	₩254.7bn	+77%
Meritz Securities	₩275.2bn	+92%

Cross-checks:

Shinhan gap = (254.7 - 143.5) / 143.5 = +77.5% ✓
Meritz gap = (275.2 - 143.5) / 143.5 = +91.8% ✓

Why the gap exists is straightforward. The consensus median includes estimates from early March / April when Crimson Desert had just launched (March 20) and unit-sales trajectory was unclear. Sales data accelerated rapidly, but broker-by-broker updates lagged. The slow-updating median is structurally lower than reality right now.

3.2 Why Crimson Desert sales matter so much

Per Pearl Abyss official disclosures:

Crimson Desert sales trajectory:
Day 1 (3/20): 2.0 million units
Day 4 (3/23): 3.0 million units
Day 12 (4/1): 4.0 million units
Day 26 (4/15): 5.0 million units

Q1-attributable sales = March 20 to March 31, ~12 days. With 4.0 million sold by April 1, Q1-attributable units run ~3.0–3.8 million.

Q1 revenue estimate (illustrative):
ASP ≈ \~₩58,000 (weighted average of Steam $44.99 + console $49.99)

3.5M units × ₩58,000 ≈ ₩203.0bn (gross)
Less 30% platform fee → net revenue \~₩142.0bn

But revenue recognition method (gross vs. net) shifts this materially.
Gross recognition produces much higher revenue; net recognition stays around the figure above.

The estimate simplifies — actuals depend on platform mix, FX, discounts, and refund rates. The core point: Crimson Desert generated a sudden large revenue print in Q1 that consensus has not fully absorbed.

3.3 The stock has already corrected — opportunity?

Pearl Abyss closed May 8 at ₩52,500, off the 52-week high of ₩71,900 (-27% from peak). 20-day return: -7.1%. Drivers: investor-attention rotation into semis, and post-rally profit-taking.

What this means: consensus is low, and the stock has corrected. “Likely-strong number into a discounted price” structurally amplifies upside reaction if the print confirms.

But “good print = good price” is not automatic. Three conditions are required for a sustained rerating:

OP ≥ ₩220bn — beat magnitude must be material
Visible 2Q sales persistence — if launch-burst gives way to sharp rolloff, the market will tag this as one-time
Forward content roadmap — what comes after Crimson Desert? 2027 revenue-cliff concern is real

3.4 Scenarios

Scenario	OP	Stock reaction
A. Beat	≥₩220bn	Short-term +10-15% bounce. Sustained move requires 2Q persistence confirmation
B. In-line	₩140-180bn	Limited reaction. 2Q sales guidance becomes the directional input
C. Miss	<₩140bn	Refund-rate / fee-structure concerns surface. Further downside. <10% probability

4. SK Innovation — large numbers, low quality

4.1 The gap structure

Consensus OP ₩2.05tn. BNK Investment runs ₩2.49tn; some sell-side reaches ₩3.8tn. Refining-segment strength (refining margin + inventory-revaluation gain on rising oil) is the driver.

The issue is earnings quality. Inventory-revaluation gains arrive when oil rises and reverse when oil falls. The market discounts non-recurring earnings. Pearl Abyss’s Crimson Desert gain is firm-specific; SK Innovation’s refining margin depends on the externally-set crude-oil price.

The battery segment remains in loss (-₩367.0bn projected). Refining strength masks the fact that the structural turn is incomplete.

Read: #2 surprise candidate by absolute size, but inferior to Pearl Abyss as an investment thesis. Even a strong print may produce a softer stock reaction if the market classifies the upside as one-time.

5. Mirae Asset Securities — strong earnings, not surprising earnings

5.1 Why earnings have to be strong

Q1 KOSPI daily turnover averaged ₩45.3tn — +147% YoY vs. ₩18.4tn. Brokerage revenue is highly turnover-sensitive: brokerage commission, margin-loan interest, and prop-trading P&L all scale with turnover.

Consensus OP at ₩1.357tn, already +39% above the early-March consensus of ₩978.2bn.

5.2 Why the surprise size is limited

Daily turnover is publicly observable, disclosed every day. Everyone knows. So even if Mirae Asset prints above consensus, the upside is more likely to come from prop-trading / asset-management gains rather than from “unexpected” data.

The stock at +17.6% over 20 days has also already absorbed the earnings-strength expectation.

Read: #3 surprise candidate. Strong print yes, surprise — limited.

6. Lotte Chemical — downside surprise risk

Consensus operating loss -₩20.3bn. Separate reporting puts the loss as wide as -₩121.8bn — 6× wider.

The driver is naphtha cost. Iran-Hormuz tension has structurally lifted naphtha pricing. Consensus may not have absorbed the cost pressure fully.

The 20-day +9.1% rally signals “chemicals-bottom” speculative buying. If the print misses, those positions exit.

The Daesan NCC 1.1Mt facility’s 3-year shutdown (restructuring) is a positive medium-term signal but unrelated to the Q1 print.

Read: pre-print chasing is inefficient. Wait for the loss-magnitude clarification, then assess the second-half turn case.

7. Insurers / retailers / holdcos — earnings aren’t the main variable

7.1 Samsung F&M / DB Insurance

Insurance stocks aren’t moved by Q1 OP surprises. Auto-insurance loss ratio at 85.2% (above the 80% break-even) is a sector-wide drag. Stock direction is set by dividend / buyback / K-ICS solvency — not the print itself.

Samsung F&M reports May 14, DB Insurance May 15.

7.2 Lotte Shopping

Consensus OP ₩207.5bn. Separate forecast ₩212.4bn. Gap +2.4%. Solid number, not a surprise. 92% of profit is department stores; the stock is up +28.8% over 20 days. Department-store durability and discount-store / online loss compression matter more than the headline OP figure.

7.3 CJ Corporation

CJ’s stock isn’t priced on consolidated OP — it’s priced on Olive Young’s intrinsic value. Olive Young is private, so the CJ public stock carries an implied discount. K-content / inbound tourism boosts Olive Young revenue, but CJ CheilJedang amino-acid weakness offsets. Stock direction comes from Olive Young-related disclosures or structural changes, not from OP surprises.

8. Cross-reference — same-week US earnings

Date	Name	Why it matters
5/13 US AMC	Cisco	Network-equipment demand; AI-datacenter capex direction
5/14 US AMC	Applied Materials	Semiconductor-equipment orders; China-export-control impact

Applied Materials (5/14) overlaps with the US-China summit (5/14–15). Semiconductor-equipment earnings + summit outcome land in the same week — meaning Korean semiconductor SUMs face two simultaneous catalysts. Detailed summit-scenario analysis: US-China Summit (May 14–15) Korean Investor’s Guide.

9. Practical priority — what to track next week

Priority	Name	Date	Verdict	Key
1	Pearl Abyss	5/12 Tue	Most important	OP ≥₩220bn, 2Q sales persistence, revenue-recognition method
2	SK Innovation	5/13 Wed	Turn validation	OP ≥₩2tn, but one-time discount likely
3	Mirae Asset Securities	5/12 Tue	Brokerage-cluster spread	Turnover beneficiary confirmed, ROE / capital policy
4	Samsung F&M	5/14 Thu	Insurance flagship	Print less important than payout policy
5	Lotte Chemical	5/15 Fri	Largest risk	Loss may widen. No chasing

9.1 Core principle

Wait for the print, react after — don’t bet ahead. The reasoning is simple:

Pearl Abyss: whether OP exceeds ₩220bn is verified on May 12. 1–2 days of patience yields certainty.
SK Innovation: one-time vs. structural classification requires reading the release. Cannot be inferred pre-print.
Lotte Chemical: loss magnitude is unknown until May 15.

Exception: existing positions (Pearl Abyss for those already long) are reasonable to hold through the print. Selling on speculation ahead of a likely-strong print risks not being able to re-enter cleanly.

10. Bottom line

The largest 1Q26 earnings-surprise candidate among next week’s 10 Korean reports is Pearl Abyss. Consensus OP ₩143.5bn vs. likely ₩250bn+ actual. Crimson Desert sold 4 million units in 12 days post-launch, and the bulk of Q1-attributable revenue lands in Q1.

But “good print = good price” isn’t automatic. With the stock already off -27% from the 71,900-won peak to 52,500 won, a sustained rerating requires OP ≥₩220bn AND visible 2Q sales persistence. SK Innovation has the largest absolute upside but most of it is one-time (inventory revaluation). Mirae Asset Securities is strong-but-known. Lotte Chemical carries downside-surprise risk.

The rational positioning: don’t bet ahead of the print — react after. A strong print on Tuesday can still be bought on Wednesday. A weak print is a bullet you didn’t take.

FAQ

Q: Why Pearl Abyss as #1? A: Largest gap between consensus median (₩143.5bn) and broker estimates (₩254.7-₩275.2bn) at +75-92%. Crimson Desert sold 4 million units in 12 days post-launch, with the bulk landing in Q1 P&L. Stock is already -27% from peak, so a confirmed beat has the highest upside reaction probability.

Q: Should I buy Pearl Abyss if the print is strong? A: Not automatically. Three conditions for a sustained move: OP ≥₩220bn (material beat), visible 2Q sales-persistence (no sharp rolloff), and a forward content roadmap (post-Crimson Desert). Without all three, the market can tag the print as one-time.

Q: Why is SK Innovation lower priority despite the larger absolute number? A: The size is bigger (₩2.5-₩3.8tn potential vs. ~₩250bn for Pearl Abyss), but quality is lower. Refining-margin and inventory-revaluation gains are non-recurring. The market typically doesn’t assign elevated multiples to one-time earnings, so even strong prints may produce muted stock reactions.

Q: Why is Lotte Chemical the most dangerous name? A: Consensus operating loss -₩20.3bn vs. some forecasts running -₩121.8bn — 6× difference. Iran-Hormuz tension lifted naphtha cost structurally, and consensus may understate this. The stock is up +9.1% over 20 days on “chemicals-bottom” speculation, so a wider-than-expected loss could trigger fast unwinding.

Q: Why won’t Mirae Asset Securities surprise even with strong earnings? A: Daily turnover is publicly observable. Consensus has already revised up +39% (₩978.2bn → ₩1.357tn). The stock has rallied +17.6% over 20 days. The information that drives the print is already in the price.

Q: How should one approach insurance names? A: Insurance stocks are not Q1 OP-driven. Auto-insurance loss ratio (85.2%, above the 80% break-even) is a sector drag. Stock direction is set by dividend, buyback, and K-ICS solvency policy.

Q: How does this connect to US earnings the same week? A: Cisco (5/13, networking demand) and Applied Materials (5/14, semi-equipment orders + China-export-control impact) report. Applied Materials overlaps with the US-China summit (5/14-15) — meaning Korean semi-SUMs face two simultaneous catalysts in a single week.

This article is for research and informational purposes only and does not constitute investment advice. Earnings calendar based on Kiwoom Securities’ May 2026 Research Calendar; actual reporting dates should be confirmed via DART filings. Consensus from FnGuide; individual broker estimates (Shinhan, Meritz, NH, BNK, etc.) cited from the respective firm’s reports. Pearl Abyss Crimson Desert unit-sales figures are from Pearl Abyss official disclosures; Q1-attributable units are estimates. Revenue recognition method (gross vs. net) materially shifts implied financials. KT&G already reported on May 7. Analysis can be wrong. Data cut: May 10, 2026 KST.