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Consumer Non-Durables

KT&G Corp.

  • 106,000.00 KRW
  • +500.00
  • +0.47%
  • South Korea
    Aug 16, 2018
  • Ticker
    KRX(033780)
  • Prev. close
    105,500
  • Market cap (KRW)
    14,484.35B
  • Market cap (USD)
    12,818.58M
  • Shares
    137.29M

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 2017 KRWUSD
Revenue4,667.19B4,128.39M
Gross Profit2,709.98B2,397.13M
Operating income1,426.09B1,261.46M
Income before tax1,345.62B1,190.27M
Net income1,163.75B1,029.40M
EBITDA1,587.13B1,403.91M
Diluted EPS9,2178.15
Dividends Per Share4,0003.53
Total Assets9,975.90B9,318.48M
Total liabilities2,146.14B2,004.71M
Total equity7,772.05B7,259.86M
Operating cash flow1,189.76B1,052.40M
Currency in KRWCurrency in USD

Historical Data

 Dec 2013Dec 2014Dec 2015Dec 2016Dec 2017
Revenue 3,821.69B 4,112.85B 4,169.83B 4,503.27B 4,667.19B
Gross Profit 2,074.12B 2,214.94B 2,487.04B 2,661.83B 2,709.98B
Operating income 1,013.33B 1,171.87B 1,365.89B 1,469.55B 1,426.09B
Income before tax 880,358.21M 1,154.66B 1,399.25B 1,587.33B 1,345.62B
Net income 570,667.34M 825,605.72M 1,035.71B 1,230.77B 1,163.75B
EBITDA 1,190.67B 1,333.92B 1,527.74B 1,628.24B 1,587.13B
Diluted EPS 4,533 6,558 8,222 9,755 9,217
Dividends Per Share 3,200 3,400 3,400 3,600 4,000
Total Assets 7,074.95B 7,418.66B 8,673.35B 9,812.08B 9,975.90B
Total liabilities 1,709.47B 1,710.58B 2,397.85B 2,694.32B 2,146.14B
Total equity 5,274.95B 5,630.60B 6,208.90B 7,045.20B 7,772.05B
Operating cash flow 629,180.15M 815,659.51M 1,303.14B 1,547.34B 1,189.76B
 Dec 2013Dec 2014Dec 2015Dec 2016Dec 2017
Revenue 3,490.89M 3,907.11M 3,684.24M 3,881.50M 4,128.39M
Gross Profit 1,894.58M 2,104.13M 2,197.41M 2,294.30M 2,397.13M
Operating income 925.62M 1,113.25M 1,206.83M 1,266.65M 1,261.46M
Income before tax 804.15M 1,096.90M 1,236.30M 1,368.16M 1,190.27M
Net income 521.27M 784.30M 915.10M 1,060.83M 1,029.40M
EBITDA 1,087.60M 1,267.19M 1,349.83M 1,403.42M 1,403.91M
Diluted EPS 4.14 6.22 7.26 8.40 8.15
Dividends Per Share 2.92 3.22 3.00 3.10 3.53
Total Assets 6,703.89M 6,749.45M 7,397.00M 8,123.93M 9,318.48M
Total liabilities 1,619.82M 1,556.27M 2,044.99M 2,230.77M 2,004.71M
Total equity 4,998.29M 5,122.68M 5,295.21M 5,833.08M 7,259.86M
Operating cash flow 574.71M 774.85M 1,151.38M 1,333.70M 1,052.40M

Valuation Measures

Dec 2017
PER12.53
ROA11.76%
ROE15.70%
Operating margin30.55%
Profit margin24.93%

Key executives

  • President, Chief Executive Officer & Director: Bok-In Baek
  • Managing Director & Head-Finance: Gyeong-Bo Kang
  • Managing Director, Head-Research & Development: Chang-Hyo Lee
  • Director & Vice President: Heung-Ryeol Kim
  • Vice President & Head-Sales: Hyeon-Jin Kim

Shareholders

  • National Pension Service of Korea (9.6%)
  • KT&G Corp. (8.0%)
  • Industrial Bank of Korea (6.9%)
  • First Eagle Investment Management LLC (5.2%)
  • Deutsche Asset Management Investment GmbH (3.0%)
  • BlackRock Fund Advisors (2.1%)
  • KT&G Corp. Employee Stock Ownership Association (2.1%)
  • Japan Tobacco Inc. (2.0%)
  • The Vanguard Group, Inc. (2.0%)
  • Thornburg Investment Management, Inc. (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

  • AmorePacific Group, Inc.
  • LG Household & Health Care Ltd
  • Estee Lauder Companies Inc. Class A
  • Yuyu Pharma, Inc.
Last Updated on 16 Aug, 2018

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