Netmarble Neo, the development unit of South Korea’s top gaming company Netmarble, has scrapped its plan to go public, on the back of its lackluster performance and underperforming gaming stocks listed on the local market, according to investment banking sources on Friday.

The company withdrew its preliminary application for an initial public offering a day earlier, which was submitted to the Korea Exchange in June.

Blaming “stagnant market situation” for the thwarted plan, a Netmarble official said it would make another attempt later, "when we can get a proper valuation from the market.”

It had aimed to float its shares on the main board Kospi in the latter half of this year to become Netmarble’s first subsidiary to make a stock market debut.

“Through the global launch of Second Country: Cross Worlds in the first quarter next year, we are looking forward to making new achievements in the global market.”

Both the industry and potential investors were readying themselves to welcome Netmarble Neo as one of the leading stocks in the gaming sector. The company’s unlisted stocks were traded as high as 185,000 won ($156.27) per share as of June 24, but following the news of its IPO withdrawal, the price has plunged to 16,450 won on Friday.

Meanwhile, Netmarble Neo saw its sales plunge 12.6 percent on-year to 44.2 billion won in the first half of this year, while its operating profit dipped 42.6 percent on-year to 17.3 billion won.