[Click eStock] Core Business Growth and Shareholder Return Expectations... KT&G Target Price Raised

Hyundai Motor Securities Raises KT&G Target Price to 240,000 Won

On July 23, Hyundai Motor Securities maintained its "buy" investment rating for KT&G, citing both the company’s stable core business and high expectations for shareholder returns. The target share price was raised from 2.3 million won to 2.4 million won.

Hyundai Motor Securities projected KT&G’s consolidated second-quarter revenue at 1.6907 trillion won, up 9.2% year-on-year, with operating profit growing 14.4% to 400.4 billion won—figures expected to meet market consensus.

Second-quarter tobacco revenue is forecast to rise by 11.8% year-on-year, while operating profit is expected to increase by 15.5%. Domestic cigarette sales are projected to edge down by 0.2% from a year earlier. For new growth products (NGP, e-cigarettes), revenue is expected to grow by 5.4%, as market share expands due to increased market penetration and the launch of new products.

Overseas tobacco sales are expected to surge by 23.1% compared to the previous year. Researcher Ha Heeji from Hyundai Motor Securities stated, "Despite an unstable external environment, strong growth in the overseas tobacco segment is continuing," adding, "In the second quarter, both the average selling price (ASP) and sales volume are expected to continue to increase."

The health supplements division’s second-quarter revenue is expected to rise by 2.5% year-on-year, while operating profit is forecast to soar by 53.2%. Ha noted, "Although sales benefited from promotional events related to Family Month in Korea, the decline in sales in the Chinese market is somewhat disappointing."

He further explained, "While the core business, driven by overseas cigarettes, remains robust, expectations of an increase in the dividend per share and the likely announcement of additional shareholder return policies such as new share buybacks are the main reasons behind the target price increase."

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