Hana Securities on the 31st said Krafton has reentered a structural growth phase in both PC and mobile traffic for its flagship intellectual property (IP) PUBG: Battlegrounds. It also assessed that the company is relatively insulated from the ongoing, prolonged war issues. It maintained a Buy rating and a target price of 420,000 won. Krafton's previous day's closing price was 250,500 won.
Hana Securities projected that Krafton will beat consensus (the market average estimate) with fourth-quarter consolidation revenue of 1.2471 trillion won and operating profit of 433.4 billion won.
In addition, first-quarter PC revenue was estimated at 311.0 billion won, down 3.9% year over year.
Lee Jun-ho, a Hana Securities researcher, said, "The reason PC revenue decreased year over year is the base effect from 'Enjoy.'"
For the flagship PUBG: Battlegrounds, it analyzed that concurrent users are increasing. The researcher said, "Based on Steam for PUBG on PC, the average number of concurrent users in the first quarter was 300,000, up 6.1% from the previous quarter," adding, "It rebounded for the first time in four quarters."
According to the researcher, Krafton achieved a peak concurrent user count of 1.34 million through login events, showing continued user engagement. In particular, the average number of concurrent users in March was 340,000, a record high.
Meanwhile, first-quarter mobile revenue was estimated at 596.3 billion won, up 12% year over year and 104.1% quarter over quarter.
The researcher said, "Tencent revealed in February that the daily active users (DAU) of 'Peacekeeper Elite' surpassed 90 million, which is more than a 12.5% increase from last year's Lunar New Year level of 80 million," adding, "We expect double-digit growth in China based on traffic."
For this year on a consolidation basis, it expected revenue of 4.6894 trillion won, up 41% year over year. Operating profit was forecast at 1.2773 trillion won, up 21.1% from a year earlier.
The researcher analyzed, "With the traffic of the PUBG IP and the first-quarter results, doubts about the IP will be resolved," adding, "The PUBG IP has already evolved perfectly into a platform on mobile, building a growth structure, and this success formula now applies to PC."
In addition, the new title "Subnautica 2" is expected to overcome litigation and launch in early access in May. Hana Securities estimated first-year sales after the launch of Subnautica 2 at 3 million copies.
The researcher explained, "We judge that PUBG IP traffic on both PC and mobile has reentered a structural growth phase, and if results extend through the mode launch, it is expected to paint a picture beyond 2024," adding, "It is also relatively free from geopolitical issues such as the recently prolonged war."