Hanwha Investment & Securities noted on the 23rd that KRAFTON's second-quarter performance is expected to be a bit of a breather this year. This is attributed to the off-season of its flagship title, PlayerUnknown's Battlegrounds, and the base effect from last year's strong performance. However, there is sufficient upside potential as major events for PlayerUnknown's Battlegrounds and the new title 'Subnautica 2' early access are scheduled for the second half.
KRAFTON's second-quarter revenue is projected to be 672.5 billion won, with an operating profit of 222.2 billion won. The operating profit is expected to fall somewhat short of the market consensus of 313.3 billion won. A revenue decline of around 10% is anticipated in the institutional sector for PC games. This is due to a lack of increase in average revenue per user (ARPU) attributed to the PlayerUnknown's Battlegrounds 8th anniversary event and the collaboration effect with New Jeans.
Kim So-hye, a researcher at Hanwha Investment & Securities, stated, 'The second-quarter results are somewhat disappointing, but the monthly active user (MAU) levels have been maintained even during the recent traffic off-season,' adding, 'I expect a rebound in the revenue growth trend due to the planned collaboration events in the second half.'
She added, 'While the early access for Subnautica 2 is also scheduled for the second half, it is still early to speculate on specific information and expectations related to the new title,' noting, 'Confirming the rebound of existing PlayerUnknown's Battlegrounds until the third quarter is a priority.'
KRAFTON's target stock price remains at the previous 440,000 won, and the investment opinion continues to be 'buy.'