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| Krafton's version of "PlayerUnknown's Battlegrounds" for the mobile platform / Courtesy of Krafton |
More than 94 percent of Krafton's revenues come from overseas markets
By Anna J. Park
Major foreign institutional investors turned out to have joined a stock allotment subscription for the Korea-headquartered global game company Krafton's initial public offering (IPO) set for Aug. 10.
According to the investment banking industry, Wednesday, major investors including Blackrock and GIC ― previously known as Government of Singapore Investment Corporation ― are some of the big-name investors seeking to hold the game company's shares. The two investors are particularly known for their stability ― a penchant for holding shares long term ― sending affirmative signals for the company's successful IPO.
Industry sources say the company's blueprint vision of expanding into various genres and platforms, based on its most popular games, has been received positively by foreign investors. While foreign investors' stock allotment request was made possible starting Aug. 14, the first day's ordering already exceeded the entire amount allocated by 10 times.
One of the key reasons behind the firm's popularity among foreign investors is that Krafton earns more than 94 percent of its annual revenues from overseas markets. Since the company launched its mega-hit game "PlayerUnknown's Battlegrounds" back in 2017, the game has become the world's fifth-best-selling game of all time, selling more than 75 million copies for PC and console. The game is also the only game in history to top the charts in both U.S. and Chinese markets. The mobile version of the game, launched in 2018, particularly marked over 1 billion global downloads, taking the world's top mobile game spot.
Its presence is also growing rapidly in emerging markets like India, the Middle East and North Africa. The firm reached the top of the chart in both India and 15 countries in the Middle East and North Africa. Its latest mobile version drew more than an accumulative 34 million users in a week since its launch in early July. Given these emerging companies' growth potential, Krafton's increased revenues from these areas look more promising.
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| Krafton CEO Kim Chang-han, center, speaks about the company's future vision, while sitting next to Krafton Chairman Chang Byung-gyu, right, during an online press meeting, Monday. Courtesy of Krafton |
"One foreign institutional investor that I met during the overseas roadshow told me that Krafton made them consider investing in Korean listed companies for the first time," Krafton Chairman Chang Byung-gyu said during Monday's IPO press conference, adding that the game company will further grow into a global tech company, as it actively invests in the deep learning sector as well as the global entertainment industry as a whole.
"Games are the most potent media, with their precious possibility of limitless expansion into other genres," Kim Chang-han, CEO of Krafton, said in the company's latest YouTube promotional video, explaining the success stories of the company. "Krafton will continue to build its own universe with differentiated world-class creations, based on the firm's strong technology and interactive designing roles."
Krafton logged an annual revenue of 1.67 trillion won ($1.45 billion) in 2020, a 54 percent year-on-year increase from the previous year. The firm's operating profit also rose to 773.9 billion won last year, more than double from the previous year.
With the IPO, the company plans to raise 4.3 trillion won, the second-largest IPO capital raise in Korean stock market history, following only Samsung Life Insurance which raised 4.8 trillion won in 2010. About 70 percent of the raised capital will be spent on global M&As to expand the firm's business scope beyond borders.
