[THE INVESTOR] KT&G will benefit from the increase in price of Philip Morris Korea’s e-cigarettes, said Kiwoom Securities on Dec. 18, maintaining a “buy” recommendation and raising the target price to 157,000 won (US$143.93) from 146,000 won.
"The price increase of Heets for IQOS will be favorable for KT&G in the mid-term in expanding its share in the e-cigarettes market and in the long-term, in making room to raise its own prices," said analyst Park Sang-jun in a report.
KT&G employees demonstrate how to use Lil.
KT&G unveiled its heat-not-burn device Lil last month. Fiit is the tobacco exclusively designed for the device that will be distributed nationwide from the beginning of next year. Lil is expected to attain a 5 percent market share in the second quarter, according to the analyst.
Similar to its competitors, Fiit will enjoy low taxes and will be launched through duty-free channels, and its average price in the domestic market will rise between 2-3 percent a year, said Park.
The expectations for growth of the tobacco company may rise significantly from the new product, added the analyst.