[Click eStock] "Krafton Undervalued Considering PUBG Growth... Target Price Raised"

On April 2, SK Securities stated that considering the growth of Krafton's PUBG (Battlegrounds) this year, the company is currently undervalued. As such, SK Securities raised its target price to 360,000 won while maintaining a "Buy" investment opinion. The firm also forecasted that Krafton’s first-quarter results would exceed market expectations.

Hyoji Nam, a researcher at SK Securities, said, "Due to PUBG (Battlegrounds) performance that exceeded expectations, we revised our first-quarter operating profit estimate upward by 34.3%, and reflecting the PUBG roadmap released last month, we also raised our annual profit estimate by 11.2%." She conveyed these remarks accordingly.

Although the second quarter is typically an off-season, traffic is expected to continue trending upward due to the release of the Contender (character enhancement) system and the new mode Xenopoint this month, followed by further content updates and the launch of the Payday mode in May.

Nam predicted, "Related costs are expected to decrease from the first half of this year as lawsuits and mode development are completed, and the effects of new mode launches will continue throughout the year, supporting solid growth for PUBG." She added, "As of March 31, approximately 200 billion won worth of treasury shares had been repurchased, but additional buybacks and cancellations are also anticipated."

According to SK Securities’ forecast, Krafton's first-quarter results are expected to post sales of 1.25 trillion won (up 43.6% year-on-year), operating profit of 441.4 billion won (down 3.5%), and net profit attributable to controlling shareholders of 334.2 billion won (down 1.1%).

This is because a significant increase in sales is expected due to first-quarter events. PC platform revenue is projected to reach 349.4 billion won, up 9.0% year-on-year. The New Year's rerun (re-release) event in January had a favorable effect, and the ninth-anniversary event last month, which included a supercar resale, led to an increase in PU (paying users). Last month, PCU (peak concurrent users) reached 1.34 million, marking a record-high level of traffic.

Mobile platform revenue is expected to increase 9.6% year-on-year to 583.6 billion won. The Chinese version of the battle royale game, 'Game for Peace,' which saw a ranking drop in the fourth quarter last year due to a lack of content, experienced an increase in DAU (daily active users) to as high as 9,000 through the New Year and Lunar New Year map updates and a Ferrari collaboration.

Operating expenses are expected to increase by 95.2% year-on-year to 813.8 billion won, as approximately 40 billion won in labor costs related to the implementation of the "voluntary resignation selection program" will be reflected at once. From the second quarter, the labor cost burden is expected to decrease.

This content was produced with the assistance of AI translation services.