Krafton Shares Post Strongest Gains in Nearly Two Years

By Kwanwoo Jun

Krafton's shares posted their sharpest gains in nearly two years as traders cheered the company's quarterly earnings beat.

Shares of the South Korean videogame developer rose 13% to close at 331,000 won ($241.54) on Tuesday--their sharpest daily percentage increase since Nov. 11, 2022--outperforming the stock benchmark Kospi's 0.1% rise.

The developer of the survival shooter game "PlayerUnknown's Battlegrounds," known as PUBG, on Monday reported that both operating and net profit more than doubled to 332.10 billion won and 341.40 billion won, respectively, for the April-June quarter, beating street views. Revenue rose 83% on the year to a quarterly record of 707.00 billion won.

The above-consensus results prompted Nomura on Tuesday to raise its annual earnings-per-share forecast for Krafton by 48% for 2024, with the flagship PUBG game pegged as the main driver of earnings growth. Nomura analyst Angela Hong said in a research note that she expects Krafton's share price to continue to get a boost in the next six months, especially from its mobile-based PUBG monetization and new game releases, including "Dark and Darker Mobile" in the final quarter of 2024 and "inZOI" in 2025.

Korea Investment & Securities analysts H.Y. Jung and Yerim Kim on Tuesday also raised their net-profit estimate for Krafton by 29% for 2024 and by 12% for 2025, citing strong gamer traffic at its PUBG game. Its monthly active users rose 40% on the year and its playing users more than doubled in the second quarter, they noted.

Both Nomura and Korea Investment & Securities lifted their targets for the stock by 25% and 21%, respectively, to 400,000 won, and maintained buy ratings.

Write to Kwanwoo Jun at kwanwoo.jun@wsj.com

(END) Dow Jones Newswires

August 13, 2024 03:57 ET (07:57 GMT)

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