[Click eStock] "Krafton Lowers PUBG Revenue Estimates... Target Price Down"

Daishin Securities announced on the 4th that it is lowering the target price for Krafton from 270,000 KRW to 230,000 KRW due to a downward revision of the sales estimates for the existing game Battlegrounds. However, the buy rating was maintained.

Krafton's sales for the third quarter of this year are expected to be 431.2 billion KRW, down 1% year-on-year, and operating profit is expected to be around 140 billion KRW, similar to the previous year. Both sales and operating profit are expected to slightly miss consensus estimates, with PC and mobile sales expected to be similar to the same period last year.

Lee Ji-eun, a researcher at Daishin Securities, explained, "PUBG PC is understood to have maintained both user traffic and sales levels compared to the same period last year," adding, "We expected continued growth due to content updates targeting the third quarter peak season, but it appears that the base effect of newly introduced workshop content in the third quarter of last year was significant."

She continued, "Battlegrounds Mobile is expected to see about a 10% year-on-year sales growth due to the peak season effect and the newly reflected performance in the India region, but overall mobile sales are expected to be similar to the same period last year due to the stabilization of Chinese sales and the low-spending business model structure in the India region," adding, "Marketing expenses are expected to be 27 billion KRW, influenced by content updates and the release of Defense Derby in the third quarter compared to the first half of the year when there were no new releases."

Unlike other games, the recent stock price decline despite no sharp drop in Battlegrounds' traffic and sales is analyzed to be due to the absence of new releases. However, starting next year, Krafton plans to release multiple games in addition to Black Budget, Gold Rush, and Next Subnautica, which are scheduled for release in the second half of the year.

The researcher added, "Although the target price is lowered due to the downward revision of third-quarter earnings, the current stock price level is considered an attractive range when thinking about next year," and recommended buying.

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