J.P. Morgan South Korea FTM 24 Jun 26 Krafton; Korea Shipbuilding; Korea Economics and More

Research evidence excerpt

J.P. Morgan South Korea FTM 24 Jun 26 Krafton; Korea Shipbuilding; Korea Economics and More

Asia Pacific Equity Research

South Korea First to Market 24 June 2026

Top Stories

Krafton (Stanley Yang) (259960 KS, OW)

Inflection point: De-rating to Re-rating: New IPs unlock upside, Accumulate

We believe Krafton’s ~3-year de-rating cycle is largely behind it, driven previously by a ‘single-IP’ discount and non-core

expansion strategy. The share price setup now looks favourable for a re-rating, in our view, supported by resilient PUBG

monetization and an increasingly visible multi-title new IP launch cycle. We expect Krafton’s pre-launch share price momentum

to begin in 2H26, c.12 months ahead of a multi-title launch cycle starting from 2027 (Palworld Mobile, etc). We also highlight

Krafton’s attractive pre-rally profile: trading at 9.7x 2026 P/E (vs 6.0x 2028 P/E), a resilient PUBG IP growth cycle, rising new IP

contribution, and a supportive shareholder return policy. Maintain OW and top Korea gaming pick with Dec-26 PT of W410K

(14.1x target 2027E P/E).

Korea Shipbuilding (Simon Han)

Canada CPSP countdown; sentiment washed out, but risk/reward improving

Canada is expected to name a preferred bidder by end-June for its next-generation submarine procurement, with market

speculation around a delay and/or a split award still in play. The contest is framed as Team Korea vs. TKMS, with the headline

differentiations increasingly framed as a trade-off between industrial cooperation, delivery time, NATO interoperability/common-

fleet benefits, and technology transfer. Into the decision, share price performance suggests markets are leaning towards a

neutral-to-negative outcome for Korea (Hanwha Ocean and HHI down 18-19% over 5 days vs. KOSPI -6% while TKMS is