[Into the Stocks] Expanding 'Krafton'... Growing Expectations for New Game Performance and Creation of a Complex Cultural Space

Stock Prices Show Rapid Recovery This Month... Up 9.03% Since the 7th
New Release Expected to Generate 3.6 Billion KRW Daily Sales Next Year
Q3 Operating Profit Likely to Exceed Forecasts

[Asia Economy Reporter Gong Byung-sun] Krafton’s stock price, which was embroiled in overvaluation controversy at the time of its listing, has been rapidly recovering since October. Attention is focused on whether the performance of upcoming new releases and the creation of a complex cultural space will serve as momentum for the stock price increase.

As of 9:19 a.m. on the 21st, Krafton recorded 494,000 KRW, up 1.44% (7,000 KRW) from the previous day. Although the KOSPI fluctuated in October and the stock price fell to 448,000 KRW on the 6th, it has quickly recovered. While the KOSPI rose 3.83% since the 7th, Krafton increased by 9.03%.

Krafton was a stock that suffered from overvaluation controversy when it was listed on August 10. When the public offering price was set at 498,000 KRW, investors criticized that the price was set too high for a game company with only one successful game, ‘Battlegrounds.’ In fact, Krafton’s opening price on the listing day was 448,500 KRW, about 10% lower than the public offering price.

However, the stock price quickly recovered to the public offering price level following news of the release of the new game ‘Battlegrounds: New State.’ On September 1, the closing price exceeded 500,000 KRW for the first time. Since the previous title ‘Battlegrounds’ was already very popular, expectations that the new release would also be successful were reflected. In fact, the pre-registrations for ‘Battlegrounds: New State’ exceeded 40 million, an overwhelming number compared to previous games.

The future stock price is expected to depend on the performance of the new release. The securities industry has a positive outlook on ‘Battlegrounds: New State.’ Korea Investment & Securities estimated the average daily sales of ‘Battlegrounds: New State’ next year at 3.6 billion KRW. This is not far behind Odin, which ranked first in game sales on Google Play Korea with an average daily sales of 4 billion KRW in August.

The solid earnings supporting the stock price are also strong. The securities market outlook exceeds the market consensus of 183.5 billion KRW operating profit for Krafton in the third quarter of this year. Meritz Securities estimates Krafton’s operating profit at 213.5 billion KRW, 16.35% above consensus, and Korea Investment & Securities estimates 209.3 billion KRW, 14.06% higher. Kim Dong-hee, a researcher at Meritz Securities, explained, “Both the existing Battlegrounds PC and mobile games are still performing well,” adding, “The operating profit margin remains in the 40% range, indicating good profitability.”

In the mid to long term, Krafton is expected to focus on providing a complex cultural experience beyond simple games. On the 18th, Krafton announced through a public disclosure that it had been selected as the preferred negotiation partner for the purchase of Emart’s Seongsu-dong headquarters building. The purpose of the purchase is to create a complex cultural space beyond a simple office space.

The previous day, Chairman Jang Byung-gyu of Krafton said at the Korea Startup Forum’s 5th anniversary online conference, “Krafton has been thinking about how to differentiate the spaces needed for the gaming and creative industries from other companies,” adding, “We will create new workspaces and cultures.”

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