A033780: Buybacks And Rising Dividends Will Support Future Upside

Analysts have maintained their fair value estimate for KT&G at ₩171,700, reflecting only marginal model tweaks to the discount rate, revenue growth, profit margin, and future P/E assumptions that were not sufficient to justify a change in the target price.

What's in the News

• Completed a share repurchase tranche of 1,896,107 shares, or 1.76% of outstanding stock, for approximately KRW 260 billion under the September 23, 2025 buyback program (Buyback Tranche Update).
• Entered a global strategic collaboration framework with Altria to pursue long term growth in modern oral nicotine, non nicotine products, and operational efficiencies in traditional tobacco, including a joint move into Another Snus Factory and its LOOP brand (Strategic Alliances).
• Raised the minimum annual dividend to KRW 6,000 per share, an increase of KRW 600 year on year (Dividend Increases).
• Issued 2025 guidance targeting double digit growth in both revenue and operating profit (Corporate Guidance, 2025).
• Expanded the ESSE superslim brand into Bulgaria, building on recent launches across major European markets through a manufacturing and distribution partnership with KTI and local distributor Tobacco Trade (Business Expansions).

Valuation Changes

• Fair Value Estimate remains unchanged at approximately ₩171,700 per share, indicating no material impact from the updated assumptions.
• The Discount Rate edged down slightly from about 7.73% to 7.71%, reflecting a marginally lower perceived risk profile.
• Revenue Growth is essentially flat at roughly 5.09% per year, with only a negligible downward adjustment.
• The Net Profit Margin has risen slightly from about 19.13% to 19.14%, implying a modestly more optimistic view on profitability.
• The Future P/E dipped marginally from around 14.75x to 14.74x, suggesting a very small reduction in the valuation multiple applied to future earnings.