KT&G hits record stock high on shareholder-friendly moves, stronger tobacco business

KT&G's solar-powered tobacco manufacturing plant in Yeongju, North Gyeongsang Province / Courtesy of KT&G

By Ko Dong-hwan

• Published Jul 23, 2025 1:55 PM KST

Analysts forecast bright business outlook

KT&G, Korea’s leading tobacco and e-cigarette manufacturer, has reached a record stock high, driven by sustained domestic market dominance and overseas growth opportunities.

The company’s stock peaked at 144,000 won ($104) on July 14, marking a surge of over 50 percent from this year’s low of 87,300 won.

KT&G attributes its record-high stock price to its shareholder-friendly policies and robust market expansion worldwide. Stock market analysts also remain positive about the company’s outlook, citing its proactive dividend strategy that is in line with the Lee Jae Myung administration’s drive to encourage private investment.

According to KT&G, its record stock value came in the wake of the Lee administration’s inauguration last month, which helped boost investor sentiment and began addressing corporate valuation uncertainties inherited from the previous Yoon Suk Yeol government. The company described the current investment-friendly trend as a long-term 'money move,' contrasting it with the debt-fueled, overheated market of 2021, driven by pandemic-related instability.

KT&G’s dividend payout ratio has exceeded 50 percent — significantly higher than the typical 35 percent seen in high-dividend stocks — which the company says has played a key role in attracting investor interest.

Share buybacks have been another key element of KT&G’s shareholder return strategy under its value-up initiative. In the first quarter, the company repurchased 2.5 percent of its total outstanding shares, worth 360 billion won. It plans to carry out similar measures in the second half of the year.

KT&G also expects a boost in domestic sales from the government’s rollout of 13 trillion won in livelihood recovery consumption coupons, which are being distributed to citizens.

An analyst at KB Securities said the company has revised its growth outlook for the domestic e-cigarette market from -6.6 percent to 6 percent, citing the anticipated market stimulus effect of the consumption coupons.

“After the government issued emergency subsidy funds to citizens during COVID-19 in 2020, the market saw an annual growth of 8.4 percent. The coupons are also allowed to be used at convenience stores nationwide, where e-cigarettes constitute a key revenue source,” the analyst said.

Last year, KT&G posted record sales of 5.9 trillion won and an operating profit of 1.2 trillion won. In the first quarter, its overseas sales volume, sales value and operating profit surged by 23 percent, 54 percent and 312 percent, respectively.

The company earlier this year completed a manufacturing plant in Kazakhstan and expanded another facility in Turkey.