Krafton is a game developer and publisher that generates most of its revenue from a single battle-royale title, 'PUBG: Battlegrounds.' Item sales on the PC version and in-app purchases in 'PUBG MOBILE,' developed in partnership with Tencent, are its core cash cows, and in the first quarter of 2026 franchise revenue from the PUBG IP alone topped ₩1 trillion for the quarter. Under a shareholder-return policy announced in February, in the first quarter it bought back about ₩200 billion of treasury stock, paid ₩99.6 billion in dividends, and canceled ₩336.2 billion of treasury stock combining newly acquired and previously held shares, and its record first-quarter results confirmed an earnings leap. What stands out recently is a long-running IP whose revenue is still growing in its ninth year, an operating margin in the 30% range, a near debt-free balance sheet, and treasury-stock cancellations; on the other hand, the concentration of most revenue in the single PUBG IP means results are sensitive to live-service traffic and to variables around the mobile partner and India policy, which are conditions to keep in mind.
At-a-glance assessment financial health · growth · profitability · valuation
- Debt ratio, current ratio and interest burden all look healthy.
- Revenue rose 22.8% year over year, and the pace is slowing (3-year trend: rising).
- Most recent quarter (Q1 2026) revenue was 56.9% higher than a year earlier.
- ROE is 10.4% (controlling-interest basis). It is above the sector average.
- Operating margin is 31.7%.
- The forward P/E sits above the sector median, reflecting elevated expectations.
Ownership & governance As of 2024-12-31
Largest shareholder Chang Byung-gyu 14.89% (individual)
Controlling bloc incl. related parties 18.72%
With the controlling bloc holding 19%, control is maintained but the free float is relatively large.
🔎 In-depth analysis
- Krafton is a game developer and publisher that generates most of its revenue from a single battle-royale title, 'PUBG: Battlegrounds.' It makes money along two main lines: on PC, item sales such as in-game outfits and weapon skins plus live service; on mobile, in-app purchases in 'PUBG MOBILE' (and the India-only BGMI) developed with Tencent are the core cash cows.
- First-quarter 2026 revenue by segment was ₩702.7 billion mobile, ₩363.9 billion PC, ₩13.8 billion console, and ₩291.0 billion other, so franchise revenue from the PUBG IP alone topped ₩1 trillion for the quarter.
- Heavy reliance on a single IP is a double-edged sword, but the essence of this company is that the IP is a long-running franchise whose revenue is, if anything, still growing in its ninth year.
- The recent closing price is ₩238,500 and the market cap is ₩11.0 trillion.
- The price sits above its 20-day line (₩233,150) and below its 60-day line (₩253,533).
- With the short- and medium-term trends diverging, direction should be viewed separately.
- The RSI (a supplementary gauge that compares upward and downward force over the past 14 days on a 0-100 scale) is 49.5, a neutral level.
- The one-month change is +2.8%, the three-month change is +2.4%, and the position versus the 52-week high is -34.8%.
- Relative strength against the KOSPI is 17 (1-99, computed from returns against the index over the past year with more weight on recent periods; higher means stronger than the market).
- That places it in roughly the top 84% of all stocks by strength.
- Over the past three months it lagged the index by 17.9%.
- When reading the chart, it helps to look at trading volume and disclosure dates together.
- On the valuation metrics, the P/E ratio (how many times one year's net profit the price represents) is 14.8x, the P/B (how many times book equity the price represents) is 1.55x, and the dividend yield is 0.95%.
- Profitability is solid, as befits a game company, with an operating margin of 31.7%, a net margin of 22.1%, and an ROE (how much is earned in a year on equity) of 10.4%.
- The balance sheet is very stable: a low debt ratio (debt relative to equity) of 32%, a current ratio of 307%, and an interest coverage ratio of 90x mean debt burden is effectively nil.
- One point to note, though, is that the 14.8x P/E here is based on last year's (2025) net profit of ₩734.8 billion.
- Because 2024 net profit had jumped sharply to ₩1.3061 trillion on items such as a smaller impairment loss and then returned to a normal level in 2025, last year's earnings are themselves closer to the low point of the swing.
- Measured against current earning power, this P/E carries an optical illusion of looking more expensive than it really is.
- Revenue trended up and to the right throughout the five years (₩1.89 trillion in 2021 to ₩3.33 trillion in 2025, growth in the mid-15% range on average).
- In 2025 revenue grew +22.8% year on year, continuing the trend.
- Operating profit and net profit appear to have turned down in 2025, at -10.8% and -43.7% respectively, but this is not a deterioration in results; it is a base effect from 2024 being unusually high on one-off factors such as a smaller impairment loss.
- The real picture shows up in 2026.
- First-quarter revenue was +56.9% year on year, operating profit +22.8%, and net profit +38.4% (₩514.1 billion), a record for any quarter, and first-quarter net profit alone already reached 70% of last year's full-year net profit.
- Content diversification and a strong live service on PUBG PC drove the growth, and mobile was firm as well.
- Because the first quarter is a seasonal peak on early-year content effects, the remaining quarters will not sustain exactly this pace, but the direction, that this year's earnings power far exceeds last year's, is clear.
- Reflecting this trajectory, the P/E on this year's expected net profit is around 10x, considerably lower in reality than the 14.8x calculated on last year's results.
- Recent disclosures center on shareholder returns and stake-related events.
- Under a shareholder-return policy announced in February, in the first quarter the company bought back about ₩200 billion of treasury stock, paid ₩99.6 billion in dividends, and canceled ₩336.2 billion of treasury stock combining newly acquired and previously held shares.
- A June 2 disclosure on the results of a treasury-stock disposition continued this flow.
- Such large-scale treasury-stock cancellation is a substantive shareholder return that raises per-share value by reducing shares outstanding.
- In early June there were numerous routine disclosures, including reports on stake changes by the largest shareholder and on executives' holdings, and a corporate governance report.
- Given the nature of a game company, there are no order disclosures such as 'single sale or supply contracts'; results, new-title live service, and the execution of shareholder returns are the real drivers of the share price.
- The strengths are clear: PUBG, a long-running IP whose revenue is still growing in its ninth year; an operating margin in the 30% range; a near debt-free balance sheet; and shareholder returns that flow through to treasury-stock cancellation.
- The record first-quarter 2026 results made the earnings leap visible, and on this year's expected earnings the valuation is lower than it looked on last year's results, so the stock sits in a band where results are improving while the share price is depressed.
- The caution is the concentration in which most revenue comes from the single PUBG IP; results are sensitive to PUBG's live-service traffic and the reception of new content, as well as to variables around the mobile partner (Tencent) and India policy.
- Ultimately, the structure is strong if PUBG's live service keeps its momentum, and the single-IP risk comes to the fore if IP traffic slows.
🔎 Valuation vs peers Undervalued
Focused on large domestic listed game developers and publishers of comparable scale and profitability.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| Netmarble | 13.93x | 0.58x | 4.14% |
| Pearl Abyss | 0.00x | 2.93x | -1.05% |
| Nexon Games | 0.00x | 2.27x | -24.26% |
Among large domestic game companies, Krafton stands out for profitability and financial stability. Netmarble has a similar P/E but low capital efficiency with an ROE of 4.1%, while Pearl Abyss and Nexon Games have weak results that make a P/E meaningless. Krafton's trailing P/E of 14.8x looks like a premium at a glance, but it is limited by being based on 2025 net profit that surged on one-off factors in 2024 and then reverted. Reflecting this year's earnings trajectory, confirmed by record first-quarter 2026 results, the P/E on expected net profit falls to around 10x, and given the 30%-range operating margin and top-tier balance sheet, the current price is judged to be in undervalued territory relative to earnings.
Price history Close · MA20 · MA60
The latest close is ₩238,500 and the market capitalization is ₩11.0 trillion. The price sits above its 20-day moving average (₩233,150) and below its 60-day moving average (₩253,533). Short-term and medium-term trends are diverging, so the direction is best read separately. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 49.5, a neutral level. The one-month change is +2.8%, the three-month change is +2.4%, and the position relative to the 52-week high is -34.8%. Relative strength versus the KOSPI is 17 (on a 1-99 scale, converted from returns against the index over the past year with more weight on recent performance; higher means stronger than the market). It is stronger than roughly 16% of all stocks. Over the past three months it lagged the index by 17.9%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
Relative performance stock vs index · start = 100
Excess return vs index · 3M -17.92% / 6M -40.32% / 12M -72.11%
Key metrics vs sector median
Valuation
The P/E is 14.98x. The P/B is 1.56x.
Enterprise value (EV)
EV = market cap + net debt. It reflects cash and debt, so it captures the real cost of the whole business that market cap alone misses; lower multiples are cheaper relative to earnings or sales.
Intrinsic value (DCF estimate)
DCF (discounted cash flow) estimate — discount rate 10.7%, initial growth 10.0%→terminal 2.0%, 10-yr forecast, free-cash-flow basis, forward earnings power normalized 1.425x. A reference range that shifts materially with assumptions.
Profitability & financials
Return on equity (ROE) is 10.4%, in line with the sector average (10.0%). The operating margin is 31.7%. The debt ratio is 31.9%, so the financial structure is stable.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $1.3B | $1.8B | $2.2B | +22.76% ↓ slower |
| Operating profit | $509.0M | $783.7M | $698.8M | -10.83% ↓ slower |
| Net profit | $394.6M | $865.6M | $487.0M | -43.74% ↓ slower |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $1.2B | $1.2B | $1.3B | $1.8B | $2.2B |
| Operating profit | $431.2M | $498.1M | $509.0M | $783.7M | $698.8M |
| Net profit | $344.6M | $331.5M | $394.6M | $865.6M | $487.0M |
| Revenue CAGR | 4-yr avg 15.25% | ||||
Revenue rose 22.8% year over year (2023 ₩1.9 trillion → 2024 ₩2.7 trillion → 2025 ₩3.3 trillion), and the three-year trend is 'rising'. That said, the pace of growth slowed from the prior year. Operating profit fell 10.8% year over year. The decline widened. Over the 5 years on record, revenue compound annual growth (CAGR) is 15.2%. The two-year revenue CAGR is 31.9%. In the most recent quarter (Q1 2026), revenue was 56.9% higher than the same period a year earlier.
Latest quarterly results Q1 2026 · vs year-ago
Technical indicators
What stands out
- ROE of 10.4% points to solid profitability.
- Revenue grew 22.8% year over year, a sign of growth.
- The balance sheet is stable in terms of debt and liquidity.
Points to watch
- The price is high versus peers, so expectations already appear priced in.
Recent news & events searched · sourced
- 2026-04-30EarningsAchieved record quarterly results in Q1 2026 with revenue of ₩1.3714 trillion and operating profit of ₩561.6 billion (revenue +56.9%, operating profit +22.8% YoY). PUBG IP franchise quarterly revenue topped ₩1 trillion (+24% YoY).Confirms entry into an earnings-leap phase. A core event suggesting this year's earnings power far exceeds last year's. Source
- 2026-06-02UpdateDisclosed a report on the results of a treasury-stock disposition. Under the February shareholder-return policy, during the first quarter it acquired ₩200 billion of treasury stock, paid ₩99.6 billion in dividends, and canceled ₩336.2 billion of treasury stock.A substantive shareholder return that raises per-share value by reducing shares outstanding. A signal of continued returns backed by financial capacity. Source
- 2026-06-01FilingDisclosed a corporate governance report and submitted the annual large-business-group status disclosure.Fulfillment of governance and routine disclosure obligations. The impact on individual results is limited, but it confirms the scale of the large-business-group affiliation. Source
- 2026-06-08FilingSubmitted a report on changes in shares held by the largest shareholder and others, and numerous reports on holdings of specified securities by executives and major shareholders.Routine reporting of stake changes. Reference information for checking governance stability. Source
Figure cross-check computed ↔ external
Recent filings
- 2026-06-08OwnershipLargest-shareholder ownership change report
- 2026-06-08OwnershipOwnership-change filing
- 2026-06-08OwnershipOfficers'/major-shareholders' holdings report
- 2026-06-08OwnershipOfficers'/major-shareholders' holdings report
- 2026-06-08OwnershipOfficers'/major-shareholders' holdings report
- 2026-06-08OwnershipOfficers'/major-shareholders' holdings report
- 2026-06-08OwnershipOfficers'/major-shareholders' holdings report
- 2026-06-08OwnershipLargest-shareholder ownership change report (amended)
- 2026-06-02TreasuryTreasury-stock disposal decision
- 2026-06-01Large-business-group status disclosure
- 2026-06-01Corporate governance report
- 2026-06-01Large-business-group status disclosure (amended)
📖 Plain-language glossary — expand if you are new to this
- P/E
- How many times a year's net profit the price is worth (lower is cheaper relative to earnings). The P/E here is on trailing (last full-year) results; for companies whose earnings swing fast (memory chips and other cyclicals/high-growth), a forward P/E on this year's expected earnings is more accurate.
- P/B
- Price relative to net assets (equity). Around 1x means it trades near book value; below 1x means below book.
- P/S
- Price relative to a year's revenue — useful for growth companies with thin earnings.
- Net debt / EV
- Net debt = interest-bearing debt − cash. Negative means more cash than debt (net cash). EV (enterprise value) = market cap + net debt, closer to what it would cost to buy the whole business.
- EV/EBIT · EV/EBITDA · EV/Sales
- Enterprise value against operating profit (EBIT), EBITDA, or revenue. Unlike P/E these reflect debt and cash; lower is cheaper relative to earnings power or sales.
- FCF / FCF yield
- Free cash flow = operating cash − capex, the cash actually left over. FCF yield = FCF ÷ market cap; higher means more cash generated per unit of market value.
- Intrinsic value (DCF)
- Future free cash flow (or, for some capex-heavy but profitable names, forecast earnings) discounted to today to estimate per-share value. Because it shifts a lot with the discount-rate and growth assumptions, it is shown as a bear/base/bull range, and the basis and assumptions are disclosed in one line beneath it.
- ROE
- How much profit the company earns in a year on its equity (%). Higher means better returns on capital.
- EPS / BPS
- Earnings per share / net assets (book value) per share.
- Operating / net margin
- Profit left from the core business / final profit after tax and interest, per unit of revenue.
- Debt ratio
- Debt relative to equity (%). Higher means more reliance on borrowing (norms vary by sector).
- Current ratio
- Assets convertible to cash within a year against debt due within a year. Above 100% leaves some short-term headroom.
- Interest coverage
- How many times operating profit covers the interest owed. Below 1x means operating profit alone struggles to cover interest.
- Dividend yield / payout ratio
- The year's dividend as a % of today's price / the share of earnings paid out as dividends.
- Revenue CAGR
- Multi-year growth expressed as a single yearly average (compound annual growth rate).
- RSI (short-term signal)
- Whether recent price action is overheated or beaten down. Above 70 is overbought, below 30 oversold.
- MA20 / MA60 (moving averages)
- The 20- and 60-day average price. Price above them signals a firmer short-term trend.
- vs 52-week high
- How far below the past year's peak the price sits now (%).
All figures are for reference only; how they read varies by sector and over time.
Sources: Korea FSC market-price API (data.go.kr), OpenDART, KRX/KIND — public data only.
Bong Stocks presents public-data-based information for reference only. It is not investment advice and contains no target prices, ratings, or buy/sell recommendations. Verify independently before making any decision.