KT&G (033780) 🔎 In-depth
KOSPI · Price as of 2026-08-06 · Updated 2026-08-09
KT&G sells tobacco and health-functional foods side by side. At home and abroad it offers cigarettes (conventional tobacco) and next-generation products such as lil, and through its subsidiary KGC (Korea Ginseng Corporation) it also makes CheongKwanJang red-ginseng products. In the first quarter of 2026, overseas cigarettes delivered their highest quarterly revenue on record, lifting group operating profit 27.6% year over year to ₩364.5 billion, while net profit rose 46.7%. What stands out lately is that export cigarettes and next-generation tobacco are driving earnings growth, and a strong shareholder-return program that retires a meaningful share of outstanding stock is improving dividend and per-share metrics; the flip side is that much of the growth leans on overseas sales and price increases, so a swing in exchange rates, foreign regulation, or softer demand could slow the pace.
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30-second brief
Pulled directly from the computed values below — not a separately written opinion.
What do the SourceComputedEstimateReading tags mean?
Source filings and exchange data · Computed calculated from public data · Estimate our own unverified projection · Reading drafted automatically, then rule-checked. See AI & Automation.
Core valuation metric
This stock's effective sub-sector is “Food & Beverage” (Retail, Consumer Goods & Food), a type typically read first through P/E.
Food and beverage sits close to daily necessities, so demand is fairly steady and earnings tend to be stable. The less a business's profits fluctuate, the more directly you can weigh them against the price, which makes trailing P/E — based on earnings already realized — the first metric.
Price against earnings alone becomes unstable when earnings swing. Reading it together with price against assets helps gauge the downside.
This note explains how each sector is typically valued and is educational context only, not investment advice.
At-a-glance assessment financial health · growth · profitability · valuation
- Debt ratio, current ratio and interest burden all look healthy.
- Revenue rose 11.3% year over year, and the pace is quickening (3-year trend: rising).
- Most recent quarter (Q1 2026) revenue was 14.2% higher than a year earlier.
- ROE is 13.1% (controlling-interest basis). It is above the sector average.
- Operating margin is 20.9%.
- A sector-metric and in-depth research verdict — see “Valuation vs peers” below for the basis.
Ownership & governance As of 2025-12-31
Largest shareholder Industrial Bank of Korea 8.06% (corporate)
Controlling bloc incl. related parties 8.06%
With the controlling bloc holding 8%, ownership is dispersed, leaving room for control-related or activist dynamics.
🔎 In-depth analysis Reading
KT&G makes money from three broad businesses. The first is tobacco. At home it sells cigarettes such as ESSE and Raison, and it also exports cigarettes to markets across Asia-Pacific, Eurasia, and the Middle East. Overseas cigarettes have recently become the core driver of results. The second is next-generation products (NGP). This covers 'lil', a device that heats rather than burns tobacco leaf, along with its dedicated sticks, and it is growing quickly both at home and abroad. The third is health-functional foods, where subsidiary KGC (Korea Ginseng Corporation) makes CheongKwanJang red ginseng and products such as Cheonnok and Everytime. On top of this sits an asset business that puts the company's real estate holdings to use. In short, the structure layers a growth axis of export cigarettes and next-generation tobacco, plus a red-ginseng consumer business, on top of the stable cash generation of tobacco.
The latest close is ₩182,700 and the market capitalization is ₩19.0 trillion. The price sits above its 20-day moving average (₩178,285) and above its 60-day moving average (₩179,078). It holds above both its short- and medium-term moving averages, so the trend looks healthy. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 55.6, a neutral level. The one-month change is -0.4%, the three-month change is +4.2%, and the position relative to the 52-week high is -3.3%. Relative strength versus the KOSPI is 55 (on a 1-99 scale, converted from returns against the index over the past year with more weight on recent performance; higher means stronger than the market). It is stronger than roughly 55% of all stocks. Over the past three months it outpaced the index by 23.0%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
The P/E ratio (how many times one year's earnings the share price represents) is 17.40x and the P/B (the price relative to book net assets) is 2.04x. ROE (how much the company earns in a year on its equity) is 11.8%, a solid level for a large consumer-goods company. The operating margin is a fairly high 20.4% and the net margin is 16.6%. The debt ratio (debt relative to equity) is a low 52%, so the balance sheet is sound. With an interest-coverage ratio (how many times operating profit can cover interest) of 12x, the debt burden is not heavy. On an enterprise-value basis, net debt (total borrowings minus cash) is about ₩929.7 billion, EV/EBIT (a P/E-equivalent that also reflects debt) is 14.1x, and EV/EBITDA (enterprise value against pre-depreciation profit) is 11.7x. The dividend yield is 3.5% and the payout ratio (the share of net profit paid out as dividends) is 57.6%, giving the dividend clear appeal.
Revenue grew in each of the past five years, reaching ₩6.58 trillion in 2025, up 11.3% year over year. Operating profit also rose 13.0% to ₩1.34 trillion. That said, 2025 net profit slipped 6.5% to ₩1.09 trillion, but this reflects a high base after net profit had surged 29% in 2024, not a deterioration in the underlying business. If anything, the trend clearly improved entering 2026. First-quarter revenue rose 14.3% to ₩1.70 trillion and operating profit rose 27.6% to ₩364.5 billion. Net profit jumped 46.7% to ₩378.2 billion. In particular, overseas cigarettes posted their highest quarterly revenue on record (₩559.6 billion), sending their operating profit up 56%, while next-generation products (NGP) grew 51.5%. Factoring in this earnings recovery and the large-scale buyback retirement, the valuation on this year's earnings comes out below the 16x figure calculated on last year's results. In other words, on a forward basis the stock is not as expensive as last year's numbers make it look.
In February 2026, KT&G carried out a large-scale retirement of treasury stock (reducing the share count to raise per-share value). This brought forward the buyback-retirement target set in its 2024-2027 corporate value-up plan, and the company said it would follow up with a new shareholder-return policy that strengthens dividends in the second half. In May it disclosed first-quarter 2026 results, with overseas cigarettes and next-generation tobacco driving growth and group operating profit up 27.6%. Also in May there was a disclosure of a business suspension involving a subsidiary, but the impact on group-wide results is limited. Through June, disclosures on treasury-share trust transactions continued, showing that the shareholder-return program is being executed as planned.
KT&G is a company that layers a growth axis of export cigarettes and next-generation tobacco on top of the stable cash generation of tobacco. A key strength is that its announced corporate value-up plan is actually being carried out. It targets 15% ROE by 2027, a total of ₩3.7 trillion in shareholder returns, and retirement of a meaningful share of outstanding stock, much of which it has already delivered ahead of schedule. First-quarter 2026 results dovetailed with this direction, with earnings clearly improving. The favorable case holds when price increases and higher volumes for overseas cigarettes and the expansion of next-generation tobacco continue; in that case, low debt, a high dividend, and earnings growth all work together. The cautionary case is the reverse. Because much of the growth leans on overseas sales, an adverse move in exchange rates or wobbling regulation and demand in key export regions could slow the pace of growth. It is also worth bearing in mind that the domestic tobacco market itself is mature and hard to grow meaningfully.
🔎 Valuation vs peers Fairly valued
Compared against large domestic consumer staples (stable, cash-generative consumer businesses such as tobacco and health-functional foods); because KT&G combines tobacco, red ginseng, and next-generation tobacco in a near-monopoly domestic position, directly comparable listed peers are limited, so it is viewed through the lens of staples with similar dividend and cash-flow characteristics.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| KT&G | 17.40x | 2.04x | 13.05% |
A P/E of 16.4x and a P/B of 1.9x on last year's results are neither especially cheap nor especially expensive for a stable large-cap consumer-goods name. While 2025 net profit looked lower because of a high base, first-quarter 2026 operating profit rose 27.6% and net profit 46.7%, so earnings are growing again. On this year's earnings, which reflect that trajectory, the valuation comes out below last year's numbers. Add the large-scale retirement that reduces the share count, and per-share earnings improve. Taken together, weighing defensive cash flow, a high dividend, and the earnings recovery, the current valuation can be seen as a reasonable, fair level. Conversely, if overseas growth slows, the growth premium could fade.
Price history Close · MA20 · MA60
The latest close is ₩182,700 and the market capitalization is ₩19.0 trillion. The price sits above its 20-day moving average (₩178,285) and above its 60-day moving average (₩179,078). It holds above both its short- and medium-term moving averages, so the trend looks healthy. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 55.6, a neutral level. The one-month change is -0.4%, the three-month change is +4.2%, and the position relative to the 52-week high is -3.3%. Relative strength versus the KOSPI is 55 (on a 1-99 scale, converted from returns against the index over the past year with more weight on recent performance; higher means stronger than the market). It is stronger than roughly 55% of all stocks. Over the past three months it outpaced the index by 23.0%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
Relative performance stock vs index · start = 100
Excess return vs index · 3M +23.00% / 6M -7.16% / 12M -28.19%
Key metrics Computed vs whole-market median
Valuation
The P/E of 17.40x is above the whole-market median (12.97x). The P/B of 2.04x is above the whole-market median (0.84x).
Enterprise value (EV)
EV = market cap + net debt. It reflects cash and debt, so it captures the real cost of the whole business that market cap alone misses; lower multiples are cheaper relative to earnings or sales.
Intrinsic value (DCF estimate) Estimate
Model output — not a price target. This is what the formula returns under the assumptions below, not a view on where the share price should go.
DCF (discounted cash flow) estimate — discount rate 9.2%, initial growth 10.0%→terminal 2.0%, 10-yr forecast, earnings-based. A reference range that shifts materially with assumptions.
Profitability & financials
Return on equity (ROE) is 13.1%, above the whole-market average (3.0%). The operating margin is 20.9%. The debt ratio is 57.9%, so the financial structure is stable.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $4.1B | $4.2B | $4.6B | +11.35% ↑ faster |
| Operating profit | $820.1M | $835.1M | $943.9M | +13.03% ↑ faster |
| Net profit | $634.1M | $818.9M | $765.8M | -6.49% ↓ slower |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $3.7B | $4.1B | $4.1B | $4.2B | $4.6B |
| Operating profit | $940.2M | $890.5M | $820.1M | $835.1M | $943.9M |
| Net profit | $686.5M | $713.6M | $634.1M | $818.9M | $765.8M |
| Revenue CAGR | 4-yr avg 5.92% | ||||
Revenue rose 11.3% year over year (2023 ₩5.9 trillion → 2024 ₩5.9 trillion → 2025 ₩6.6 trillion), and the three-year trend is 'rising'. The pace of growth also quickened from the prior year. Operating profit rose 13.0% year over year. Profit is growing at an accelerating pace. Over the 5 years on record, revenue compound annual growth (CAGR) is 5.9%. The two-year revenue CAGR is 5.9%. In the most recent quarter (Q1 2026), revenue was 14.2% higher than the same period a year earlier.
Latest quarterly results Source Q1 2026 · vs year-ago
Technical indicators Computed
What stands out
- The dividend yield, at 3.3%, is on the high side.
- ROE of 13.1% points to solid profitability.
- Revenue grew 11.3% year over year, a sign of growth.
- The balance sheet is stable in terms of debt and liquidity.
Points to watch
- The price is high versus peers, so expectations already appear priced in.
Recent news & events searched · sourced
- 2026-02-12UpdateCompletion of large-scale treasury-stock retirement — delivering the buyback-retirement target in the corporate value-up plan ahead of schedule and reducing the outstanding share countThe lower share count raises per-share earnings and per-share value and strengthens confidence in shareholder returns (medium-term positive). Source
- 2026-05-07EarningsQ1 2026 consolidated results — revenue ₩1,703.6 billion (+14.3%), operating profit ₩364.5 billion (+27.6%), overseas cigarettes at record quarterly revenue and next-generation tobacco up 51.5%Confirms an earnings recovery led by overseas and next-generation tobacco and improving forward earnings (short- to medium-term positive). Source
- 2026-05-15FilingFiling of the Q1 2026 quarterly report — detailed disclosure of revenue and profit by segment and of the financial positionAllows the detailed composition of results to be checked and reconfirms financial soundness (neutral to positive). Source
- 2026-06-09FilingReport on the status of treasury-stock trust agreements — buybacks under the shareholder-return program are being executed as plannedConfirms continued execution of shareholder returns (medium-term positive). Source
Figure cross-check computed ↔ external
| Metric | Computed | External | Status | Source |
|---|---|---|---|---|
| Q1 2026 operating profit | ₩364.5 billion | ₩364.5 billion | Confirmed | link |
| Q1 2026 revenue | 1₩703.6 billion | 1₩703.6 billion | Confirmed | link |
| Corporate value-up plan (ROE and scale of shareholder returns) | base | 2027 ROE 15% , ₩3.7 trillion , approx. 20% | Confirmed | link |
| Internal estimate of 2026 net profit | approx. ₩1.28 trillion(forward PER approx. 14x) | — | Unverified | link |
Recent filings Source
- 2026-06-09OwnershipOwnership-change filing
- 2026-06-04OwnershipOwnership-change filing
- 2026-05-29Large-business-group status disclosure
- 2026-05-29Large-business-group status disclosure (amended)
- 2026-05-29Corporate governance report
- 2026-05-28Large-business-group status disclosure
- 2026-05-27OwnershipOwnership-change filing
- 2026-05-15PeriodicQuarterly report
- 2026-05-12Business suspension
- 2026-05-08OwnershipOwnership-change filing
- 2026-05-07Disclosure
- 2026-05-07EarningsFair-disclosure notice
📖 Plain-language glossary — expand if you are new to this
- P/E
- How many times a year's net profit the price is worth (lower is cheaper relative to earnings). The P/E here is on trailing (last full-year) results; for companies whose earnings swing fast (memory chips and other cyclicals/high-growth), a forward P/E on this year's expected earnings is more accurate.
- P/B
- Price relative to net assets (equity). Around 1x means it trades near book value; below 1x means below book.
- P/S
- Price relative to a year's revenue — useful for growth companies with thin earnings.
- Net debt / EV
- Net debt = interest-bearing debt − cash. Negative means more cash than debt (net cash). EV (enterprise value) = market cap + net debt, closer to what it would cost to buy the whole business.
- EV/EBIT · EV/EBITDA · EV/Sales
- Enterprise value against operating profit (EBIT), EBITDA, or revenue. Unlike P/E these reflect debt and cash; lower is cheaper relative to earnings power or sales.
- FCF / FCF yield
- Free cash flow = operating cash − capex, the cash actually left over. FCF yield = FCF ÷ market cap; higher means more cash generated per unit of market value.
- Intrinsic value (DCF)
- Future free cash flow (or, for some capex-heavy but profitable names, forecast earnings) discounted to today to estimate per-share value. Because it shifts a lot with the discount-rate and growth assumptions, it is shown as a bear/base/bull range, and the basis and assumptions are disclosed in one line beneath it.
- ROE
- How much profit the company earns in a year on its equity (%). Higher means better returns on capital.
- EPS / BPS
- Earnings per share / net assets (book value) per share.
- Operating / net margin
- Profit left from the core business / final profit after tax and interest, per unit of revenue.
- Debt ratio
- Debt relative to equity (%). Higher means more reliance on borrowing (norms vary by sector).
- Current ratio
- Assets convertible to cash within a year against debt due within a year. Above 100% leaves some short-term headroom.
- Interest coverage
- How many times operating profit covers the interest owed. Below 1x means operating profit alone struggles to cover interest.
- Dividend yield / payout ratio
- The year's dividend as a % of today's price / the share of earnings paid out as dividends.
- Revenue CAGR
- Multi-year growth expressed as a single yearly average (compound annual growth rate).
- RSI (short-term signal)
- Whether recent price action is overheated or beaten down. Above 70 is overbought, below 30 oversold.
- MA20 / MA60 (moving averages)
- The 20- and 60-day average price. Price above them signals a firmer short-term trend.
- vs 52-week high
- How far below the past year's peak the price sits now (%).
All figures are for reference only; how they read varies by sector and over time.
Sources: Korea FSC market-price API (data.go.kr), OpenDART, KRX/KIND — public data only.
Bong Stocks presents public-data-based information for reference only. It is not investment advice and contains no target prices, ratings, or buy/sell recommendations. Verify independently before making any decision.