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The Korea Herald
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THE INVESTOR
March 29, 2024

Stocks & Bonds

[EQUITIES] ‘KT&G to pick up from Q3’

  • PUBLISHED :August 01, 2018 - 10:13
  • UPDATED :August 01, 2018 - 10:13
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[THE INVESTOR] KT&G’s earnings will improve from the third quarter, said Mirae Asset Daewoo on Aug. 1, maintaining a “buy” recommendation and 135,000 won (US$120.86) target price. 




As per its earnings report, operating profit in the second quarter declined 15.7 percent on-year to 325.8 billion won and revenue by 3.7 percent to 1.12 trillion won. It remained slow as expected but e-cigarettes sector reached break-even point as sales increased while fixed costs decreased, said analyst Baek Un-mok forecasting that its future stock price hinges on sales of e-cigarettes, market share and the timeline of turnaround. 

Its electronic cigarettes Fiit will expand its market share from last year’s 2.9 percent to 21.6 percent this year and 31.1 percent next year, to reach 35.0 percent in 2020. It will be able to make profit in the latter half this year when it sells over 200 million cigarettes, according to the analyst.

The tobacco company’s stock price is rising from the anticipation that its earnings have hit the bottom in the second quarter. Rise in sales of e-cigarettes, strong sales of red ginseng, development of a site in Suwon and high dividend rate will sustain the rebound, he added.

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

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