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Consumer Non-Durables

KT&G Corp.

Company Background

KT&G was founded as Korea Monopoly by the South Korean government in 1987. It was later privatized and listed on the South Korean stock market in 1999. It took its current name in 2002. The ginseng business was spun off to form a wholly owned subsidiary, Korea Ginseng.

Because KT&G produces tobacco and ginseng, one might expect the company name to stand for Korea Tobacco & Ginseng; however, it officially stands for Korea Tomorrow & Global.

KT&G no longer gets direct investment from the government; instead, government-affiliated small and midsize banks and national pension funds own stakes in it. It is known in South Korea as a company in which foreign investors have sizable interests.

The bulk of the company's earnings come from its tobacco business, which sells brands such as Esse, Bohem, This and Pine. The South Korean cigarette market has been contracting over the medium term as a smoking ban has been expanded both indoors and outdoors due to health concerns, and prices were raised sharply in 2015.

Sales abroad, on the other hand, are on the rise. The company is boosting exports and producing tobacco in Indonesia, Turkey, Russia and Iran.

KT&G also sells ginseng-based health food and beverages. Ginseng is commonly used as an ingredient for pharmaceuticals.

Business Summary

KT&G Corp. engages in the manufacture and sale of tobacco products. It operates through the Tabacoo and Real Estate Business Divisions. The Tobacco Division manufactures and distributes raw materials needed in production of tobacco. The Real Estates division offers rentals, sales, and housing development. The company was founded on April 1, 1987 and is headquartered in Daejeon, South Korea.

Financial Highlights

Dec 2019 KRWUSD
Revenue4,963.20B4,255.93M
Gross Profit2,810.45B2,409.95M
Operating income1,381.64B1,184.76M
Income before tax1,460.99B1,252.79M
Net income1,036.47B888.77M
EBITDA1,564.44B1,341.50M
Diluted EPS8,207.827.03
Dividends Per Share4,4003.77
Total Assets10,712.09B9,262.91M
Total liabilities2,006.16B1,734.76M
Total equity8,650.56B7,480.27M
Operating cash flow1,097.13B940.78M
Currency in KRWCurrency in USD

Historical Data

 Dec 2015Dec 2016Dec 2017Dec 2018Dec 2019
Revenue 4,169.83B 4,503.27B 4,667.19B 4,471.51B 4,963.20B
Gross Profit 2,487.04B 2,661.83B 2,709.98B 2,588.98B 2,810.45B
Operating income 1,365.89B 1,469.55B 1,426.09B 1,255.10B 1,381.64B
Income before tax 1,399.25B 1,587.33B 1,345.62B 1,318.66B 1,460.99B
Net income 1,035.71B 1,230.77B 1,163.75B 901,650.43M 1,036.47B
EBITDA 1,527.74B 1,628.24B 1,587.14B 1,405.28B 1,564.44B
Diluted EPS 8,222 9,755 9,217 7,141 8,207.82
Dividends Per Share 3,400 3,600 4,000 4,000 4,400
Total Assets 8,673.35B 9,812.08B 9,981.36B 10,155.10B 10,712.09B
Total liabilities 2,397.85B 2,694.32B 2,151.60B 2,022.02B 2,006.16B
Total equity 6,208.90B 7,045.20B 7,772.05B 8,079.27B 8,650.56B
Operating cash flow 1,303.14B 1,547.34B 1,187.14B 857,058.47M 1,097.13B
 Dec 2015Dec 2016Dec 2017Dec 2018Dec 2019
Revenue 3,684.24M 3,881.50M 4,128.39M 4,063.10M 4,255.93M
Gross Profit 2,197.41M 2,294.30M 2,397.13M 2,352.51M 2,409.95M
Operating income 1,206.83M 1,266.65M 1,261.46M 1,140.46M 1,184.76M
Income before tax 1,236.30M 1,368.16M 1,190.27M 1,198.22M 1,252.79M
Net income 915.10M 1,060.83M 1,029.40M 819.29M 888.77M
EBITDA 1,349.83M 1,403.42M 1,403.91M 1,276.93M 1,341.50M
Diluted EPS 7.26 8.40 8.15 6.48 7.03
Dividends Per Share 3.00 3.10 3.53 3.63 3.77
Total Assets 7,397.00M 8,123.93M 9,323.58M 9,101.18M 9,262.91M
Total liabilities 2,044.99M 2,230.77M 2,009.80M 1,812.17M 1,734.76M
Total equity 5,295.21M 5,833.08M 7,259.86M 7,240.79M 7,480.27M
Operating cash flow 1,151.38M 1,333.70M 1,050.09M 778.77M 940.78M

Valuation Measures

Dec 2019
PER11.42
ROA9.93%
ROE12.39%
Operating margin27.83%
Profit margin20.88%

Key executives

  • President, Chief Executive Officer & Director: Bok-In Baek
  • Managing Director & Head-Finance: Gyeong-Bo Kang
  • Senior Managing Director, Head-R&D: Chi-Beom Oh
  • Vice President & Head-Sales: Hyeon-Jin Kim
  • Director & Vice President: Heung-Ryeol Kim

Shareholders

  • National Pension Service of Korea (12.6%)
  • KT&G Corp. (9.6%)
  • First Eagle Investment Management LLC (7.4%)
  • Industrial Bank of Korea (6.9%)
  • DWS Investment GmbH (2.8%)
  • The Vanguard Group, Inc. (2.5%)
  • BlackRock Fund Advisors (2.0%)
  • KT&G Corp. Employee Stock Ownership Association (2.0%)
  • International Value Advisers LLC (0.6%)
  • Polaris Capital Management LLC (0.6%)

Contact Details

  • Website:http://www.ktng.com
  • Address: 71 Beotkkot-gil, Daedeok-gu, Daejeon, 34337, South Korea
  • Phone: +82.42.939.5000

Related Companies

  • KT&G Social Welfare Foundation
  • JR REIT XVIII
  • KGC Life Engine Co. Ltd.
  • JR REIT VIII Co., Ltd.
  • JR REIT V Co., Ltd.
  • KGCYebon Corp.
  • Renzoluc Pte Ltd.
  • PT Trisakti Purwosari Makmur
  • Taea Industrial Co. Ltd.
  • Somang Cosmetics Co., Ltd.
  • Korea Ginseng Corp.
  • KT&G Corp. Employee Stock Ownership Association
  • Yungjin Pharm. Co., Ltd.

Competitors

  • LG Household & Health Care Ltd
  • AmorePacific Group, Inc.
  • Estee Lauder Companies Inc. Class A
  • L'Oreal SA
  • Daewon Pharmaceutical Co., Ltd
  • Greencross WellBeing Corporation
  • HLSCIENCE CO.LTD
  • EM-Tech. Co., Ltd.
Last Updated on 20 Oct, 2020

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