Ask Warren

JONBUR Research · Update note

Kakao Games · 293490 · Software

Kakao Games: Model Fair Value Estimate Cut 47% to ₩1,478 per Share

Why this report

Written after:

  • Model fair value changeModel estimate of fair value moved -47% (₩2,815 → ₩1,478 per share)Oct 22, 2026

Our model estimate of fair value for Kakao Games fell 47.5% from ₩2,815 to ₩1,478 per share on 2026-10-22, and the range between bear and bull cases widened sharply. The share price of ₩10,180 remains far above the whole range, so the gap between the market and the model has grown.

Written Oct 21, 2026 · Data as of Oct 20, 2026 · 0 views

This is not financial advice. The report does not recommend buying or selling anything.

XfWATGr/in@

What happened

The only material event is a change in our model output, not a company filing. The base estimate moved from ₩2,815 to ₩1,478 per share, a fall of 47.5%. No new filings or excerpts accompany the change, and no smaller recent events are available as background.

The model still uses trailing figures to H1 2026, so the financial inputs are the same as in the previous report: revenue of ₩384.3B, an operating loss of ₩67.0B, a net loss of ₩129.9B and free cash flow of -₩59.5B. The discount rate was trimmed slightly from 7.5% to 7.3%. The data does not explain what drove the large cut in the estimate, so we cannot say which assumption changed. The share price was ₩10,180 on 2026-10-20, up 11.1% over one month and 34.1% over three months, but down 33.3% over one year.

What it changes for the thesis

The previous report (2026-10-18) described a share price recovering ahead of any visible recovery in the numbers, with falling revenue, widening operating losses and headlines about the new title Dokkaebi's World. Nothing in the data we have changes that picture. There are no new sales figures for the game, no guidance and no new filings beyond an earnings-date notice and an IR event on 2026-10-14.

The lower estimate is consistent with the report's caution that the model, built on current losses and negative cash flow, does not assume a recovery. It does not tell us whether the new title will change the numbers. The earnings release remains the next test. Other data is broadly steady: foreign ownership is 4.7% (unchanged over 60 days), short balance is 1.5% and foreigners were small net buyers over 20 days.

What it changes for the valuation

The model now gives a base estimate of ₩1,478 per share, with a bear case of ₩837 and a bull case of ₩2,671, at a 7.3% discount rate. The previous report had ₩2,815 base, ₩2,734 bear and ₩3,137 bull at 7.5%. This is a model estimate based on the assumptions shown, not a target.

The range is much wider than before: the bear case fell by about 69%, while the bull case fell by about 15%. That signals that the estimate is highly sensitive to the inputs. At ₩10,180, the share price is about 6.9 times the base estimate and still almost 3.8 times the bull case.

Other measures are little changed: price-to-book is 0.8x, price-to-sales is 2.8x, and price-to-earnings and EV/EBITDA cannot be calculated because earnings are negative. Cash of ₩720.1B is below borrowings of ₩971.1B, whereas the previous report said cash exceeded borrowings; the figures themselves are not new, so that earlier statement should be treated with caution. Peers' price-to-book ranges from 0.5x (Netmarble) to 4.9x (Hyundai Autoever).

Closing view

The update widens an existing gap rather than adding new business information. The model now sees less value in current earnings power, while the market continues to price in some recovery that the reported numbers do not yet show. Because the cause of the cut is not visible in the data and the range is wide, the estimate should be read as a rough guide to how sensitive the valuation is. The coming earnings release is the next evidence on whether the new game shows up in revenue and losses.

This note is informational only and is not a recommendation.

Model estimate of fair value

Bear
₩837
-93%
Base
₩1,478
-88%
Bull
₩2,671
-77%

Model estimate based on the assumptions shown. Not a price target and not a buy or sell signal.

Base case of the 5-year discounted cash flow model on the stock's Valuation tab (statements TTM to H1 2026; discount rate 7.3%). Bear and Bull move the main assumptions by fixed steps. See and change the assumptions

Filings and data used

Report history

  1. Oct 21, 2026Update noteModel fair value changeKakao Games: Model Fair Value Estimate Cut 47% to ₩1,478 per Share
  2. Oct 18, 2026InitiationStart of coverage (300 largest)Kakao Games: Shares Rebound 30.8% Over Three Months While Losses Persist and Revenue Keeps Falling

Built only from jonbur's own data: prices and investor flows, filed financial statements and filings, and news headlines. Disclosed (filed) data is labelled as such. Written by AI and may contain mistakes.

This is not financial advice. The report does not recommend buying or selling anything.

Source: KRX statistical information