Krafton Inc., South Korean label behind globally-popular survival shooting game “PlayerUnknown’s Battlegrounds,” has embarked on the process of initial public offering (IPO) that could bring a mega game stock with value of over 30 trillion won ($25.7 billion) to the main Korean bourse.

Krafton has invited securities companies at home and abroad to submit their IPO outline proposal by Oct. 12, according to investment bank industry sources on Thursday. The game developer hopes to join the Kospi next year.

Krafton took off as Bluehole in 2007. The company is best known for online multiplayer battle royale game “PlayerUnknown’s Battlegrounds” that delivered $100 million revenue in just 13 weeks of its global release in 2017. The mega-hit game was developed by PUBG Corp., formerly Ginno Games, which Krafton took over in 2015.

Krafton could be the biggest in Korean IPO pipeline next year, with analysts projecting its value to go up at least 30 trillion won when it goes public based on its earnings and the price-to-earnings ratio of its local peer game stocks Netmarble and NCSoft hovering at about 30 times.

Krafton came second to Nexon in its performance this year with its earnings tripled from last year. It reported operating profit of 513.7 billion won and 405 billion won in net profit on a consolidated basis in the first half, up 295.8 percent and 256.1 percent, respectively from a year earlier. Revenue jumped 95 percent to 887.2 billion won.

“The company’s value is estimated at between 30 trillion won and 35 trillion won by reflecting its projected earnings for this year alone,” said a market expert. “The value could even go up above 40 trillion won when pricing begins,” the expert added.

Some market analysts predict its IPO alone could reach up to 10 trillion won.

Krafton’s IPO has been much anticipated for a while as the company needs not only to raise funds for new game development but also to provide its investors chance to cash on the company.

The company’s largest shareholder is Krafton Chairman Chang Byung-gyu, who controls a total 41 percent stake when combined with shares held by his close affiliates. Chinese game giant Tencent is the second largest shareholder with 10 percent. Other key stakeholders include private equity funds KNET Investment Partners, Premier Partners, and Altos Ventures.

By Kang Woo-seok and Cho Jeehyun

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]