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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
Revenue4,965.70B4,258.07M
Gross Profit2,876.10B2,466.24M
Operating income1,381.50B1,184.63M
Income before tax1,462.25B1,253.88M
Net income1,035.10B887.59M
EBITDA----
Diluted EPS----
Dividends Per Share4,4003.77
Total Assets10,706.20B9,257.81M
Total liabilities1,594.40B1,378.70M
Total equity8,702.10B7,524.83M
Operating cash flow1,061.50B910.23M
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 4,965.70B
Gross Profit 2,487.04B 2,661.83B 2,709.98B 2,588.98B 2,876.10B
Operating income 1,365.89B 1,469.55B 1,426.09B 1,255.10B 1,381.50B
Income before tax 1,399.25B 1,587.33B 1,345.62B 1,318.66B 1,462.25B
Net income 1,035.71B 1,230.77B 1,163.75B 901,650.43M 1,035.10B
EBITDA 1,527.74B 1,628.24B 1,587.14B 1,405.28B --
Diluted EPS 8,222 9,755 9,217 7,141 --
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 10,706.20B
Total liabilities 2,397.85B 2,694.32B 2,151.60B 2,022.02B 1,594.40B
Total equity 6,208.90B 7,045.20B 7,772.05B 8,079.27B 8,702.10B
Operating cash flow 1,303.14B 1,547.34B 1,187.14B 857,058.47M 1,061.50B
 Dec 2015Dec 2016Dec 2017Dec 2018Dec 2019
Revenue 3,684.24M 3,881.50M 4,128.39M 4,063.10M 4,258.07M
Gross Profit 2,197.41M 2,294.30M 2,397.13M 2,352.51M 2,466.24M
Operating income 1,206.83M 1,266.65M 1,261.46M 1,140.46M 1,184.63M
Income before tax 1,236.30M 1,368.16M 1,190.27M 1,198.22M 1,253.88M
Net income 915.10M 1,060.83M 1,029.40M 819.29M 887.59M
EBITDA 1,349.83M 1,403.42M 1,403.91M 1,276.93M --
Diluted EPS 7.26 8.40 8.15 6.48 --
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 9,257.81M
Total liabilities 2,044.99M 2,230.77M 2,009.80M 1,812.17M 1,378.70M
Total equity 5,295.21M 5,833.08M 7,259.86M 7,240.79M 7,524.83M
Operating cash flow 1,151.38M 1,333.70M 1,050.09M 778.77M 910.23M

Valuation Measures

Dec 2019
PER12.46
ROA9.92%
ROE12.33%
Operating margin27.82%
Profit margin20.84%

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 (11.2%)
  • KT&G Corp. (8.0%)
  • Industrial Bank of Korea (6.9%)
  • First Eagle Investment Management LLC (6.1%)
  • DWS Investment GmbH (2.9%)
  • The Vanguard Group, Inc. (2.4%)
  • BlackRock Fund Advisors (2.4%)
  • Japan Tobacco Inc. (2.0%)
  • Thornburg Investment Management, Inc. (2.0%)
  • KT&G Corp. Employee Stock Ownership Association (2.0%)

Contact Details

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

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Competitors

  • LG Household & Health Care Ltd
  • AmorePacific Group, Inc.
  • L'Oreal SA
  • Estee Lauder Companies Inc. Class A
  • British American Tobacco p.l.c.
  • Japan Tobacco Inc.
  • Philip Morris International Inc.
  • EM-Tech. Co., Ltd.
Last Updated on 21 Feb, 2020

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