April 25, 2024

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[THE INVESTOR] KT&G will gain momentum in the latter half as its e-cigarette business expands and exports recover, said KB Investment and Securities on June 7, maintaining a “buy” recommendation and 120,000 won (US$112.41) target price. 

Sales of its e-cigarettes will reach 1.54 billion units and market share will rise to 22 percent. In the fourth quarter it will cross break-even point expansion of sales channels. Delay in price negotiations with distributors in Middle East and Central Asia has dragged down its first-quarter cigarette exports by 40.4 percent, but has recovered, and combined exports in will increase 17.3 percent in the second quarter from the same period last year, said analyst Park Ae-ran.

Meanwhile KT&G’s high dividends are attractive, which account for approximately 4.1 percent at its current stock price. Slow earnings during the transition period, when demands shift to e-cigarettes, was expected and already has been reflected on its stock price, said Park, adding that its current stock price has declined 12.6 times its price-earnings ratio and is likely to regain. 

By Hwang You-mee (glamazon@heraldcorp.com)