[Click eStock] "Krafton, H2 New Releases Boost Valuation Appeal"

DB Financial Investment Report

[Asia Economy Reporter Minji Lee] DB Financial Investment maintained its buy rating and target price of 310,000 KRW for Krafton on the 15th.

It is expected that the second quarter sales will be 467.4 billion KRW and operating profit 155.6 billion KRW, representing a 2% increase and an 11% decrease respectively compared to the same period last year. The second quarter results are forecasted to fall short of market expectations of 475.9 billion KRW and 173.8 billion KRW, respectively.

Hwang Hyun-joon, a researcher at DB Financial Investment, said, “There are no special factors other than an increase in commission fees due to new releases and other influences,” adding, “PC traffic increase from the free-to-play transition at the beginning of the year has not yet been reflected in sales, and mobile sales are predicted to have decreased due to the off-season effect.”

The key point to watch for sales this year is the release of The Callisto Protocol in December. In the second half of the year, new game lineups such as Project M, Black Budget, and Windless are expected to be concretized, which will positively affect future earnings estimates and stock prices. Researcher Hwang explained, “Peacekeeper Elite, released in May 2019, is still showing solid performance,” and added, “Although New State’s results are underwhelming, a turnaround is expected through repositioning marketing and other efforts.”

In the second half of the year, profit levels are expected to be maintained by the Battlegrounds series. Expectations are anticipated to rise with the monitoring of the December anticipated release and strengthening of the next lineup. Researcher Hwang said, “Due to recent stock price weakness, this year’s earnings valuation is below the peer group average PER of 22 times,” and added, “The valuation attractiveness is sufficient, so a buy is recommended.”

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