[Click eStock] "Krafton, Strong Traffic for Flagship Game IP... Target Price Up"

Target Price Raised from 400,000 KRW to 450,000 KRW

Korea Investment & Securities has raised the target price for Krafton from 400,000 KRW to 450,000 KRW, expecting traffic growth centered on games from its subsidiary studio PUBG this year. The investment rating was maintained at 'Buy.'

Krafton recorded sales of 617.6 billion KRW in the fourth quarter of last year, an increase of about 15% compared to the same period the previous year, and operating profit of 215.4 billion KRW, up 31%. Operating profit fell short of market expectations for the first time in five quarters since Q4 2023 due to increased commission payments related to hosting PGC. Ho-yoon Jung, a researcher at Korea Investment & Securities, analyzed, "PC game sales amounted to 232.6 billion KRW, a 39.2% increase year-on-year. Although sales decreased compared to Q3, user traffic and sales have stabilized following the launch of the Londo map." He added, "Mobile game sales rose 5.7% to 362.2 billion KRW. Although China's 'Hwapyeongjeongyeong' was somewhat sluggish due to the off-season, PUBG Mobile and BGMI sales remained relatively solid."

Despite the Q4 results falling short of market expectations, there is an opinion that there is no need for concern. Researcher Jung explained, "Since 2023, the competitive landscape in the survival genre on both PC and mobile has eased, positively impacting PUBG's traffic. Also, Hwapyeongjeongyeong, which was significantly weak in Q4 last year, has shown sales growth following the Londo map update on the 14th of last month." He added, "This shortfall in Krafton's market expectations does not justify a downward revision of earnings estimates for 2025."