[Click e-Stock] "KT&G Offers Top Investment Appeal in Korea for Shareholder Returns"

NH Investment & Securities stated on January 9 that KT&G offers the highest level of investment appeal in Korea in terms of shareholder returns.

In 2025, KT&G repurchased its own shares worth 560 billion won and completed the cancellation of 6.0% of its total outstanding shares by combining these repurchased shares with its previously held treasury stock.

Joo Younghoon, a researcher at NH Investment & Securities, explained, "We estimate that share repurchases and cancellations will continue at a similar scale in 2026, and with the minimum dividend per share raised to 6,000 won, KT&G's investment appeal in terms of shareholder returns remains the highest in Korea."

He added, "While the existing business, especially overseas cigarettes, is performing well, 2026 is expected to see a full-scale expansion into new business areas through ASF (Another Snus Factory), a nicotine pouch company acquired last year. This further enhances KT&G's investment attractiveness in both performance and dividends."

KT&G's sales and operating profit for the fourth quarter of last year are projected at 1.6031 trillion won and 244.6 billion won, respectively. These figures represent increases of 3% and 15.1% year-on-year, meeting market expectations.

Joo noted, "Domestic cigarette sales are inevitably set to decline due to the timing difference of the Chuseok holiday, which led to some shipments being reflected in the third quarter. However, excluding this timing issue, the sales trend remains at a normal level, so there is no cause for concern."

He continued, "The health supplement segment is likely to see sales declines both domestically and overseas due to shrinking market demand. However, as the company is working to reduce cost ratios and expenses, operating profit margins are expected to show a slight improvement compared to the same period last year."

Joo maintained a 'Buy' rating on KT&G with a target price of 170,000 won.