[Click eStock] "Krafton Relies on New Release Performance... Target Price Lowered"

[Asia Economy Reporter Lee Myunghwan] SK Securities announced on the 28th that it maintains a buy rating on Krafton but lowers the target price from 400,000 KRW to 300,000 KRW. This is due to the suspension of services in India for existing releases and the impact of Chinese regulations. However, it also analyzed that the performance depends on the new release scheduled for next month.

Krafton's sales in the third quarter of this year recorded 433.8 billion KRW, down 17% year-on-year, and operating profit was 162.3 billion KRW, down 7%. SK Securities pointed out that PC game sales increased by 48% compared to the previous quarter as the game-specific currency "G-coin" was exhausted following the transition of the flagship title "Battlegrounds" PC version to free-to-play.

However, the major mobile title "Hwapyeongjeongyeong" fell short of sales expectations despite the peak season due to the contraction of the Chinese game market. It also diagnosed that uncertainty has increased due to the suspension of the Battlegrounds mobile version service in India.

SK Securities' analysis is that the performance depends on the new release "The Callisto Protocol," which Krafton plans to launch next month. This is because the growth of existing game sales has slowed due to regulations on the Chinese game market and the suspension of services in India. Since there are no clear anticipated titles for next year yet, it is expected that performance fluctuations will be significant depending on the sales of The Callisto Protocol. Considering the cumulative sales of 4 million units of a similar game, "Dead Space," SK Securities estimates the first-quarter sales of The Callisto Protocol at 1.5 million units and cumulative sales at 5 million units.

Researcher Lee Sojung of SK Securities stated, "Sales growth is possible through content expansion of existing games, and since the evaluation of the new title The Callisto Protocol is positive, we maintain a buy rating."

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