KB Securities projected on July 8 that KT&G's second-quarter performance will exceed market expectations, driven by strong sales of domestic cigarettes and heated tobacco products (NGP). As a result, the firm raised its target price for KT&G by 13.6% to 250,000 won while maintaining a 'buy' rating.
Research analyst Ryu Eun-ae stated in a report that KT&G's consolidated revenue for the second quarter is expected to reach 1.6889 trillion won, with an operating profit of 392.8 billion won, slightly above the consensus estimate of 382.6 billion won.
Ryu noted that the decline in total demand for domestic cigarettes is likely to have eased due to changes in the duty-free operator at Incheon International Airport. She also anticipated increased sales for domestic NGPs due to the change in duty-free operators and the nationwide launch of the Lil Solid 3.0.
Looking ahead, Ryu highlighted that the second half of the year will begin with an interim dividend in August, creating a strong momentum for shareholder returns. She emphasized that KT&G's appeal as a defensive stock will stand out in a volatile market.
Furthermore, she predicted that the new shareholder return policy to be announced in the second half of the year will focus on enhancing dividends, with an expected annual dividend yield of at least 3.9%. The last interim dividend record date was at the end of August, and a share buyback and cancellation plan exceeding 300 billion won is also on the horizon. Ryu expressed optimism that robust shareholder returns will help close the discount compared to similar competitors.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.