KB Securities noted on the 3rd that KRAFTON's performance in the first quarter of this year (January to March) is projected to exceed market expectations (consensus). It maintained an investment opinion of 'Buy' and a target price of 450,000 won. KRAFTON's last trading day's closing price was 347,000 won.
Lee Seon-hwa, a Research Institute at KB Securities, said, "PC sales are expected to reach 285.6 billion won, up 17.2% from the same period last year," and added, "The success of the Lunar New Year festival event held in January and post-8th anniversary event is expected to bring KRAFTON's flagship game, PUBG, to a peak of 1.35 million concurrent users on the Steam platform."
She continued, "Mobile sales are estimated to rise 24% from a year ago to 498.8 billion won," and noted, "The global peak season for PUBG and the release of new maps, along with collaboration content with India's representative car 'Mahindra', are showing positive results."
KB Securities estimates that KRAFTON will record a consolidated revenue of 804.6 billion won and an operating profit of 404.5 billion won in the first quarter. This represents an increase of 20.8% and 30.3%, respectively, compared to the same period last year. The operating profit is 9% above the market expectation of 371.6 billion won.
The Research Institute expects that the operating profit margin will record 50.3%, an improvement of 3.6 percentage points (p) during the same period, attributing it to operational leverage effects resulting from growth.
It is also positive that KRAFTON is expected to defend its stock bottom through its own share buyback and cancellation. KRAFTON plans to buy back approximately 330 billion won worth of its own shares by June 26. The Research Institute explained, "If 60% of the acquired shares are canceled, the 12-month forward earnings per share (EPS) is expected to improve by 1.2%."