[Edaily Reporter Kwon Oh Seok ] NH INVESTMENT & SECURITIES announced on the 7th that it is maintaining its “Buy” rating on #KT&G Corporation and raising its target price from 220,000 won to 230,000 won.

Joo Young-hoon, an analyst at NH INVESTMENT & SECURITIES, stated, “The company is implementing one of the most generous shareholder return policies in the country. It conducted a large-scale cancellation of previously held treasury shares in the first half of the year, and plans to continue buying back and canceling treasury shares in the second half.” He added, “Furthermore, the upward revision of the dividend per share is another factor boosting market sentiment.”
He continued, “In addition to shareholder returns, attention should be paid to the strong earnings momentum driven by the overseas cigarette business,” adding, “As a company that has secured both stability and growth potential, it offers high investment appeal amid increased stock market volatility.”
Second-quarter consolidated revenue and operating profit came in at 1.7016 trillion won (+9.9% year-over-year) and 414.5 billion won (+18.5%), respectively, exceeding market consensus. Research Analyst Ju said, “While the overall decline in total demand in the domestic cigarette market continued, the rate of decline moderated (-1.2%), and we assess that the company performed well by increasing its market share.”
He added, “Overseas cigarette sales have seen increases in volume, revenue, and profit for nine consecutive quarters, and we view the strengthening of the business portfolio centered on overseas operations positively.” He further explained, “In the health food segment, revenue increased across all domestic channels due to ‘Family Month’ events and individual brand campaigns, but overseas revenue declined due to inventory adjustments in the Chinese distribution channel.”
Furthermore, the analyst noted, “Regarding operating profit, the significant rebound (+61.3%) largely reflects the impact of increased sales in high-margin domestic channels, so this is not a cause for concern,” and added, “In the real estate sector, both revenue and operating profit are continuing to show stable growth as the completion rates of major development projects rise.”