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Investing.com - HSBC initiated coverage on Krafton Inc (KS:259960) with a Buy rating and a price target of KRW500,000.00, according to a research note released Wednesday.
The South Korean gaming company’s share price has declined approximately 15% from its peak in May 2025, while the KOSPI index has gained 22% during the same period. HSBC indicates this pullback follows a significant rise in Krafton’s share price earlier in 2024, which was driven by increased player numbers and higher revenue.
The research firm notes that while user traffic is now plateauing, particularly on PC platforms, it believes the negative factors are already reflected in the current stock price. HSBC identifies four positive factors supporting its bullish outlook, including potential for user base expansion and the company’s PUBG 2.0 plan to improve graphics and content diversity.
HSBC also highlights that Krafton’s monetization is outpacing user growth, and the company has potential to reduce its reliance on its flagship PUBG title through new game development. The firm projects non-PUBG intellectual property will contribute 8% of game revenue by 2027, up from 5% in 2024.
The investment bank considers Krafton’s current valuation attractive despite the recent share price decline, supporting its Buy recommendation and KRW500,000.00 price target.
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