Target Price Raised from 460,000 KRW to 470,000 KRW,
“On the 20th, Samsung Securities raised the target price for Krafton from 460,000 KRW to 470,000 KRW. This adjustment comes as sales and user numbers for ‘PUBG: Battlegrounds’ are gradually increasing, along with growing anticipation for new releases. The investment opinion remains ‘buy’.”,
Analyst Donghwan Oh of the securities firm explained, “Marking its 8th anniversary since release, the Steam (game platform) version of PUBG has exceeded 900,000 concurrent users, a record high since the COVID-19 pandemic.”
He added, “The annual supercar collaboration, previously held once a year, will be increased to twice, and collaborations with celebrities and fashion brands are also planned. The introduction of a UGC (user-generated content) system is expected to ensure stable growth for the PUBG intellectual property (IP).”
Krafton recently held an online showcase to reveal the pricing and key content of its new game, InZOI. InZOI allows users to indirectly experience unexpected situations and various life stories through the character ‘Zoi’. It shares similarities with the Sims series. The early access price is set at $39.99, while the domestic release price is 44,800 KRW. Purchasers during the early access period will receive all DLC (downloadable content) and updates for free.
Regarding InZOI, Analyst Oh commented, “Considering that the Sims 4 offers expansion packs for a fee, InZOI’s pricing is reasonable. It is expected to enhance its completeness through updates over approximately a year-long early access period and attract users.”
He continued, “The realistic graphics reflecting Korean sentiments and high degree of freedom based on artificial intelligence (AI) are strengths. Considering the strategy of gradually completing the content after release, InZOI’s sales are expected to gradually increase.”
Concerning the stock price, the analyst noted, “The early success of InZOI could increase the volatility of Krafton’s stock price. However, PUBG’s sales and traffic are on the rise. With the expected release of Subnautica 2 and Blind Spot later in the year, the anticipation for new releases remains valid. Krafton’s stock price is expected to exhibit a long-term upward trend.”
Krafton’s first-quarter performance is anticipated to exceed market expectations. Analyst Oh stated, “Although the fourth-quarter performance was poor, first-quarter sales are projected to increase by 23% year-on-year due to the Chinese New Year effect of Peacekeeper Elite (Chinese version of PUBG), the large March update for mobile PUBG, and the 8th-anniversary update effect for Steam PUBG.”
He also projected, “Marketing expenses and labor costs related to InZOI will increase, but operating profit is expected to rise by 25% year-on-year, supported by the sales growth.”