Krafton shares rebound on new game timetable

[Source: Krafton Inc.]

Shares of South Korean game developer Krafton Inc. are finally showing signs of bottoming out after being halved from last year’s IPO price on growing expectations for a successful launch of a new game in December.

Shares of Krafton, Korea’s largest game maker by market share, closed 6.13 percent higher at 268,500 won ($213) on Tuesday, a sharp rebound from its lowest peak of 233,000 won in the end of April. The gain was led by foreign and institutional buying that each purchased 30 billion won and 9.5 billion won. Shares of Krafton were trading 0.37 percent higher at 269,500 won on Wednesday morning.

The surge came after the company detailed out the release of new console game “The Callisto Protocol” on Dec. 2 at an event last week, which can ease the company’s excessive reliance on online multiplayer battle royale game “PUBG: Battlegrounds.”

DAOL Investment & Securities on Tuesday upped its target stock price for Krafton from 350,000 won to 420,000 won and raised investment opinion from “buy” to “strong buy” on revived growth momentum and popular games.

“Krafton is projected to sell 1.2 million units in December,” said Kim Ha-jung, a researcher at DAOL. “The estimate is not that aggressive given sales of “Dead Space” series.”

The Callisto Protocol, a single-player survival horror game, comes from the mind of Glen Schofield, video game artist and creator of Dead Space.

Kim said that Krafton’s mobile sales will remain strong in the second quarter ending June given steady mobile sales in April. The game publisher will continue growth after the third quarter on increased collaboration with popular brands and K-pop.

Industry insiders noted that game stocks in general are currently undervalued after the plunge in their stock prices from early this year.

Last month, foreigners bought 83.2 billion won worth of shares in Krafton, 38.7 billion won in Pearl Abyss, and 28.2 billion won in Netmarble.

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