"Sidecars Triggered, Yet a New High?"... The Identity of 'This Stock' That Defied the Market Plunge

KT&G Hits Record High, Surpassing KRW 200,000
Driven by Strong Q3 Earnings and Expectations for Shareholder Returns

On the 5th, while the stock market plunged and sell-sidecars (temporary suspensions of sell orders) were triggered on both the KOSPI and KOSDAQ markets, KT&G climbed above 200,000 won during the session to set a new 52-week high. The move is seen as reflecting expectations for solid earnings and strong shareholder returns.

As of 1:24 p.m. that day, KT&G shares were trading at 195,100 won, up 1.61% from the previous day. At around 10:27 a.m., they rose as high as 201,000 won, setting a new record.

Expectations for strong earnings and shareholder returns following the completion of major overseas facility investments are seen as having supported investor sentiment.

In a report published on the 15th, Korea Investment & Securities estimated KT&G's third-quarter consolidated operating profit at 515 billion won, up 11% from the same period a year earlier. This is 4% above the market consensus. Revenue was projected to rise 4.8% to 1.915 trillion won. Both figures would be quarterly records.

Overseas tobacco operations are expected to lead the earnings improvement. Korea Investment & Securities projected that overseas cigarette sales would increase 10% on higher sales volumes and prices, while the average selling price (ASP) would rise 4%. By contrast, domestic cigarette sales are forecast to decline 4%. Estimated operating profit by segment was 411.3 billion won for tobacco, 73.1 billion won for health functional foods, and 29.4 billion won for real estate.

Choi Goun, a researcher at Korea Investment & Securities, said, "Rather than the impact of exchange rates, investors should focus on the competitiveness of the products and the growth of the overseas business." Choi added, "In a period of heightened uncertainty in the stock market, the company is attractive simply as a reliable defensive stock."

With major overseas facility investments now complete, cash flow is improving, and expectations for shareholder returns are also seen as growing. KT&G held a ceremony on the 6th to mark the start of operations at its new factory in Pasuruan, Indonesia. The company says that, following the completion of a new factory in Kazakhstan in April 2025 and the launch of operations at the Indonesian facility, a substantial portion of the 2.4 trillion won in overseas facility investments announced in November 2024 has now been completed.

Earlier, in April, KT&G canceled all 10,866,189 of its treasury shares, worth approximately 180 billion won at the market price at the time. The company then decided on September 22 to repurchase and cancel treasury shares worth approximately 360 billion won. It plans to acquire 2,071,346 shares, equivalent to about 2% of its total shares outstanding, by December 22 and cancel all of them.

The interim dividend this year was 2,000 won per share, up 600 won from 1,400 won last year. KT&G plans to announce a new medium- to long-term shareholder return policy in the fourth quarter, focusing on strengthening dividends.

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