The stock price of KRAFTON, which entered the '1 trillion club' in operating profit, is in a downward trend. This appears to be a result of forecasts from securities firms indicating that significant growth in earnings this year will be challenging.

KRAFTON Yeoksamo Office. /Courtesy of KRAFTON

According to the Korea Exchange on the 12th, at 9:22 a.m. on that day, KRAFTON was trading at 342,000 won, down 33,000 won (8.80%) from the previous trading day.

KRAFTON announced on the 11th, the day before, that it recorded annual consolidated sales of 2.7098 trillion won last year, a 41.8% increase from the previous year. Operating profit achieved during the same period rose 54% to 1.1825 trillion won.

It is the first time since its founding that KRAFTON's annual operating profit has exceeded 1 trillion won. The record high last year is attributed to the continuous growth of the 'PUBG: Battlegrounds' intellectual property. Sales over the past five years have shown an average annual increase of 20%.

However, market forecasts indicated that expanding KRAFTON's valuation would be difficult. Domestic and foreign securities firms have downgraded their investment recommendations. Shinhan Investment Corp. adjusted its investment recommendation for KRAFTON from 'Trading Buy' to 'Neutral' in a report released that day.

Research Institute analyst Kang Seok-oh noted, "The stock price rose on expectations of earnings and new titles, reaching the target price," adding, "Without proof of development and publishing capabilities through new titles other than Battlegrounds (PUBG), it will be difficult for the valuation to expand."

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