Corporate Logo(source: krafton.com)
Krafton (259960) shares remain undervalued, according to a brokerage report, which argued that the company’s current valuation does not fully reflect the value of its flagship PUBG (PlayerUnknown’s Battlegrounds) intellectual property (IP).
On September 2, Hana Securities released a report titled “Bargain Sale,” reiterating a “Buy” rating on Krafton with a target price of 530,000 won.
As of 12:02 p.m. on September 2, the stock was trading at 332,000 won, up 0.3% from the previous session.
Lee Jun-ho, an analyst at Hana Securities, stated, “The current share price does not capture the full value of PUBG IP, which is still in a structural growth phase, nor does it include the value of the development pipeline. We recommend a strong overweight strategy with an upside potential of more than 50%.”
Hana Securities highlighted the rebound in traffic for “PUBG Mobile” and the growth potential of user-generated content (UGC) modes being introduced in the PC version of Battlegrounds. According to the firm, Tencent revealed in its second-quarter earnings that the Chinese version of “PUBG Mobile,” known as “Peacekeeper Elite,” saw its average daily active users (DAU) rise more than 30% year-on-year, while the Extraction Mode surpassed 37 million DAUs.
Lee noted, “Content updates are accelerating this growth. Collaborations with Porsche in July and Nezha 2 in August appear to have boosted both revenue and traffic. We expect these collaborations to further accelerate traffic growth in China during the third quarter.”
He particularly pointed to Tencent’s announcement that participation in the “WoW” UGC mode for “PUBG Mobile” is increasing. As a precursor to UGC being implemented in the PC version of Battlegrounds, this suggests the potential for a broader platform strategy in the future.
“Global titles like Roblox and Fortnite have already demonstrated the immense potential of UGC,” Lee added. “In major PUBG markets such as Korea, China, and India, there is still no dominant UGC game. If PUBG IP can provide UGC modes on both PC and mobile, it could generate far greater revenue and traffic on a quarterly basis than developing and launching new titles.”
He continued, “While the absence of major new releases in the near term and performance fluctuations tied to large content updates have led the market to trade Krafton based on PUBG’s update cycle, the rebound in mobile traffic suggests that a strategy similar to the PC traffic growth phase in early 2024 is warranted. With generative AI enabling active UGC creation and mode development, we expect this to become a new growth driver.”
*[KOSPI]Krafton(259960) is a global game company engaged in game development and publishing business, servicing 21 games including <Battleground>, <New State Mobile>, and <Subnautica>. The market capitalization is 15.711 trillion won(as of September 1, 2025, closing price).
Corporate Logo(source: krafton.com)
Krafton (259960) shares remain undervalued, according to a brokerage report, which argued that the company’s current valuation does not fully reflect the value of its flagship PUBG (PlayerUnknown’s Battlegrounds) intellectual property (IP).
On September 2, Hana Securities released a report titled “Bargain Sale,” reiterating a “Buy” rating on Krafton with a target price of 530,000 won.
As of 12:02 p.m. on September 2, the stock was trading at 332,000 won, up 0.3% from the previous session.
Lee Jun-ho, an analyst at Hana Securities, stated, “The current share price does not capture the full value of PUBG IP, which is still in a structural growth phase, nor does it include the value of the development pipeline. We recommend a strong overweight strategy with an upside potential of more than 50%.”
Hana Securities highlighted the rebound in traffic for “PUBG Mobile” and the growth potential of user-generated content (UGC) modes being introduced in the PC version of Battlegrounds. According to the firm, Tencent revealed in its second-quarter earnings that the Chinese version of “PUBG Mobile,” known as “Peacekeeper Elite,” saw its average daily active users (DAU) rise more than 30% year-on-year, while the Extraction Mode surpassed 37 million DAUs.
Lee noted, “Content updates are accelerating this growth. Collaborations with Porsche in July and Nezha 2 in August appear to have boosted both revenue and traffic. We expect these collaborations to further accelerate traffic growth in China during the third quarter.”
He particularly pointed to Tencent’s announcement that participation in the “WoW” UGC mode for “PUBG Mobile” is increasing. As a precursor to UGC being implemented in the PC version of Battlegrounds, this suggests the potential for a broader platform strategy in the future.
“Global titles like Roblox and Fortnite have already demonstrated the immense potential of UGC,” Lee added. “In major PUBG markets such as Korea, China, and India, there is still no dominant UGC game. If PUBG IP can provide UGC modes on both PC and mobile, it could generate far greater revenue and traffic on a quarterly basis than developing and launching new titles.”
He continued, “While the absence of major new releases in the near term and performance fluctuations tied to large content updates have led the market to trade Krafton based on PUBG’s update cycle, the rebound in mobile traffic suggests that a strategy similar to the PC traffic growth phase in early 2024 is warranted. With generative AI enabling active UGC creation and mode development, we expect this to become a new growth driver.”
*[KOSPI]Krafton(259960) is a global game company engaged in game development and publishing business, servicing 21 games including <Battleground>, <New State Mobile>, and <Subnautica>. The market capitalization is 15.711 trillion won(as of September 1, 2025, closing price).