1. KT&G Q1 2025 Earnings and Share Buyback Announcement

KT&G continued its growth trajectory in Q1 2025, with revenue increasing by 15.4% year-on-year to KRW 1.49 trillion. The steady growth of the tobacco business and the strong performance of the real estate business were the main drivers. However, operating profit decreased by 1.2% to KRW 118.8 billion due to cost burdens and increased marketing expenses. In this context, KT&G has decided on a KRW 300 billion share buyback, actively working to enhance shareholder value. This is expected to have a positive impact on stock prices by reducing the number of outstanding shares and increasing earnings per share (EPS).

2. Why is the Share Buyback Significant?

A share buyback involves a company repurchasing its own shares and then retiring them. This has the effect of reducing the number of outstanding shares, thereby increasing the value per share. KT&G’s share buyback sends the following positive signals to shareholders:

  • • Enhanced Shareholder Value: Increased EPS and book value per share (BPS) lead to higher per-share value.
  • • Improved Investor Sentiment: A proactive shareholder return policy enhances investor confidence and improves investment sentiment.
  • • Strengthened Financial Structure: Increased capital efficiency can lead to improvements in the financial structure.

These positive effects are likely to act as momentum for stock price increases.

3. Investment Strategies and Considerations

KT&G’s share buyback decision enhances its investment appeal from a long-term perspective. However, investors should consider the following factors before making investment decisions:

  • • Macroeconomic Environment: Macroeconomic variables such as interest rates, exchange rates, and international oil prices can impact KT&G’s performance.
  • • Regulatory Risks: The tobacco business is sensitive to regulatory changes, so it is essential to monitor relevant policy changes.
  • • Competitive Landscape: The intensifying competition in the domestic and international tobacco markets needs to be continuously monitored.

It is crucial to consider these factors comprehensively and make prudent investment decisions.