[Click eStock] "KT&G, Positive Domestic Top-Level Shareholder Return Policy"

NH Investment & Securities analyzed on the 12th that KT&G's shareholder return policy will have a positive effect on corporate value. They maintained a 'Buy' investment rating and a target price of 110,000 KRW.

Juyeong Hoon, a researcher at NH Investment & Securities, stated, "KT&G disclosed its mid-to-long-term (2024?2026) shareholder return plan at the end of last year," adding, "The plan includes a total dividend payout of 1.8 trillion KRW, including a progressive increase in dividends per share (DPS) over the next three years, a share repurchase program worth 1 trillion KRW, and a share cancellation equivalent to 15% of the total issued shares (7.5% from newly acquired shares and 7.5% from existing holdings)." He continued, "This is one of the highest-level shareholder return policies domestically and will positively impact corporate value."

For the fourth quarter of 2023 on a consolidated basis, sales are forecasted at 1.4635 trillion KRW, and operating profit at 187.7 billion KRW. Compared to the same period in 2022, sales increased by 4%, but operating profit decreased by 7%. The researcher noted, "While the burden of rising tobacco manufacturing costs continues, costs related to infrastructure construction in the real estate sector have occurred, slightly missing market expectations."

The domestic tobacco sector continues to experience about a 1% decline in total cigarette demand, but growth is expected compared to the previous year due to increased duty-free channel sales driven by the recovery of overseas travel demand. In the case of electronic cigarettes, the nationwide launch of the new product, Lil Hybrid 3.0, has been completed, maintaining its position as the market leader in share. The overseas tobacco sector is also continuously growing in cigarettes. The KGC segment is expected to recover double-digit growth rates in scale due to the recovery of duty-free channel sales.

This content was produced with the assistance of AI translation services.