Samsung Securities said on the 5th that for KRAFTON to see a valuation increase, it needs visibility on new releases and a recovery in profit growth. It maintained its Buy rating but lowered the target price by 2.6% to 380,000 won from 390,000 won. KRAFTON's previous day's closing price was 279,000 won.
Samsung Securities said that in the third quarter, KRAFTON's platform Steam game "PUBG: Battlegrounds" posted high growth, but profit growth slowed.
This year's third-quarter revenue rose 21% from a year earlier, beating the consensus by 2.7%, but operating profit grew only 7.5% year over year, missing the consensus by 4.8%.
PC division revenue increased 29% year over year thanks to three intellectual property (IP) collaborations for PUBG. Mobile division revenue rose 14.8% from a year earlier on the back of the Neptune acquisition effect and revenue growth of the Chinese version of Battlegrounds, "Game for Peace."
Oh Dong-hwan, an analyst at Samsung Securities, said, "Revenue growth was solid and stock-based compensation fell due to the share price decline, but operating profit missed the consensus because outsourcing costs related to new title development and the revenue mix of the PC division increased, driving up app fees."
In the fourth quarter as well, the operating profit growth rate is expected to remain in the single digits year over year. For Steam's PUBG, collaborations with Porsche and a fashion brand are scheduled, so growth of more than 20% versus a year earlier is expected, but ahead of the Lunar New Year, a decline in revenue for China's Game for Peace is being observed. It also noted continuing increases in development costs related to new titles.
The results of expanded investment in new titles are also expected to emerge starting in 2027. In 2026, new titles such as "Subnautica 2" and "Palworld Mobile" are slated for release, and many new titles secured through equity investments are planned to begin full-scale launches from 2027.
Oh said, "However, because development of AAA games has not yet been disclosed, a full recovery in new-title momentum will take time," adding, "For valuation to rise, visibility into the next titles and a recovery in profit growth are needed."