April 26, 2024

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[THE INVESTOR] KT&G’s cigarette exports will return to normal and e-cigarette sales will increase in the latter half, said Mirae Asset Daewoo on June 26, maintaining a “buy” recommendation and 135,000 won (US$121.15) target price. 

Exports of cigarettes in the second quarter declined only 1.3 percent on-year, overcoming the 44 percent plunge in the previous quarter, as it has successfully negotiated with its Middle East partner. Exports are bound to increase now, said analyst Baek Un-mok.

Sales of e-cigarettes will expand as it streamlines production. Its e-cigarette unit will reach break-even point in the fourth quarter with monthly sales of 200 million. The firm has started developing its site in Suwon into a living complex and for the next five years will maintain over 1.5 trillion won annual revenue and operating margin of between 40-50 percent, said the analyst. 

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