[Click eStock] "Krafton, New Game Momentum to Be Reflected in Second Half"

NH Investment & Securities Report

[Asia Economy Reporter Minji Lee] NH Investment & Securities maintained a buy rating and a target price of 400,000 KRW for Krafton on the 15th, expecting new game momentum to be reflected from the second half of the year.

Krafton's first-quarter revenue is analyzed to have reached 488.7 billion KRW, and operating profit 182.8 billion KRW, representing increases of 10.1% and 325.3% respectively compared to the previous quarter. Operating profit is expected to exceed the market consensus of 187.8 billion KRW.

Mobile revenue is expected to increase by 17.6% from the previous quarter to 357.2 billion KRW. Due to the peak season effect in the Chinese market in Q1, sales of ‘HwaPyeongJeongYeong’ rose, and ‘PUBG Mobile’ also showed a recovery trend, increasing compared to the previous quarter. Traffic is gradually rising due to the promotional effect of 'PUBG: NewState,' which reflected a full quarter of sales.

PC game revenue is expected to decrease by 3% from the previous quarter to 111.5 billion KRW. Although Battlegrounds transitioned from paid sales to free-to-play and there was a reward item event, the items have been gradually consumed, and recovery is expected from Q2. Jaemin Ahn, a researcher at NH Investment & Securities, analyzed, “Personnel expenses (78.9 billion KRW) due to last quarter’s performance bonuses and marketing costs (29 billion KRW), which had significantly increased due to new releases, are stabilizing, leading to an improvement in operating profit.”

The first half of the year is a momentum gap period with no new releases. Q1 performance was favorable due to the Chinese Lunar New Year peak season, and information about new releases scheduled for the second half is expected to be gradually disclosed. The highly anticipated ‘Callisto Protocol’ is expected to be released within the year without delay. Researcher Jaemin Ahn said, “The developer mentioned on Twitter that development is in the final stages,” adding, “Related videos and information will be released soon, and momentum related to this will gradually appear from the second half of the year.”

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