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KT&G Corporation - KTCIY STOCK NEWS

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KT&G Corporation (KRX:033780), known for its tobacco, ginseng, and herbal products, has recently faced an ISS recommendation to vote against its Board of Directors' proposals. KT&G expressed concerns about ISS' reliance on data provided by dissident shareholder Flashlight Capital Partners, impacting overseas business performance analysis. Additionally, ISS' recommendations against CEO nominee Kyung-man Bang and other candidates raise questions on CEO selection impartiality and Board-endorsed Outside Candidate director candidacy. KT&G emphasizes rigorous CEO selection processes and inconsistencies between ISS' recommendations and its proxy voting guidelines. Furthermore, discussions between ISS, FCP, and KT&G raised concerns over export business profitability data discrepancies, misinformation, and interactions. KT&G seeks to engage constructively with stakeholders, address concerns, and ensure shareholder value.

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KT&G announced its 38th Annual General Meeting (AGM) scheduled for March 26, 2025, at the KT&G Human Resources Development Institute in Daejeon, South Korea. The meeting agenda includes approval of financial statements, partial amendments to articles of incorporation, appointment of directors, and director remuneration cap.

The Board recommended COO and Senior Executive VP Sang-Hak Lee as an inside director candidate, citing his role as CFO and contributions to increased profitability and establishment of shareholder policies. For outside director positions, Kwan-Soo Shon and Jee-Hee Lee have been nominated for another term. Shon, who served as CEO of CJ Logistics, has also been nominated as an audit committee member, while Lee, the CEO of W.WORKS, currently chairs the sustainability committee.

KT&G stated they are actively communicating with shareholders about strengthening business competitiveness and shareholder return plans while working to maximize stakeholder interests and corporate value.

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KT&G reported strong financial results for 2024, with consolidated revenue reaching KRW 5.91 trillion (up 0.8% YoY) and operating profit of KRW 1.185 trillion (up 1.5% YoY). Under new CEO Kyung-man Bang's leadership, the tobacco segment showed impressive growth with revenue of KRW 3.906 trillion (up 8.1%) and operating profit of KRW 1.082 trillion (up 10.7%).

The company's global cigarette sales achieved a 10.3% YoY growth, with revenue reaching a record KRW 1.45 trillion. The Next Generation Product segment also showed positive trends, with domestic stick sales of 6.15 billion (up 7.7%) and global sales of 8.34 billion (up 1.5%).

KT&G announced significant shareholder returns, including immediate cancellation of treasury shares worth KRW 360 billion, planned share repurchases of KRW 300 billion, and total shareholder returns of KRW 1.1 trillion or higher for 2025. The company achieved a 12.2% ROE in 2024 and set growth targets of 5%+ for revenue and 6%+ for operating profit in 2025.

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KT&G (KRX: 033780) celebrated the expansion of its Türkiye factory with a $60 million investment, installing two new high-tech manufacturing facilities. The expanded facility, now 25,000 square meters, features four cigarette-making machines with an annual capacity of 12 billion sticks. The expansion created 60 new jobs, bringing total employment to over 200 people.

The Türkiye factory, KT&G's first overseas facility established in 2008, will serve as a core manufacturing hub for exports to Northern African and Latin American markets. This expansion is part of KT&G's strategy to become a 'Global Top-tier' company, focusing on Next Generation Products, overseas cigarettes, and health functional foods. The company aims to increase its global revenue proportion to 50% by 2027.

KT&G's total investment in Türkiye now reaches $110 million, with additional factories under construction in Indonesia and Kazakhstan. The company operates through six global corporations and various branches worldwide.

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KT&G (KRX:033780) has received strong credit ratings from major global agencies, with S&P assigning 'A-(Stable)' and Moody's assigning 'A3(Stable)' ratings. These ratings, which indicate high credit quality and very low credit risk, place KT&G among top-rated Korean companies excluding public enterprises and financial institutions.

The ratings reflect KT&G's dominant position in Korea's tobacco market, stable profit generation, and low financial leverage ratio. The agencies highlighted the company's success in Next Generation Products (NGP) and its diverse portfolio including ginseng products. They also noted KT&G's global expansion through new factories in Indonesia and Kazakhstan.

This follows the company's domestic 'AAA(Stable)' ratings from Korea's three major rating agencies in June 2023. KT&G maintains its commitment to financial stability and investment in core businesses as part of its 'leap to a Global Top-tier' vision.

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JungKwanJang, Korea's leading red ginseng brand, has introduced two new products at Sprouts Farmers Market: 'Everytime Immune Support' and 'Korean Red Ginseng Extract Vital Tonic'. The company is expanding its presence in the US market with immunity and energy-focused supplements. The brand holds a 46.6% share in the global ginseng retail market and ranks first in herbal health supplements. The products align with 2024's health food trends focusing on botanical ingredients and energy functionality, with studies showing 48% of US consumers trust plant-based ingredients. JungKwanJang is also conducting scientific research at its Fullerton R&D center and offering BFCM promotions across various retail channels.

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A study by Professor Narayanan Parameswaran's team at Michigan State University revealed that red ginseng effectively promotes bone and intestinal health through microbiota balance. The research, presented at the Korea Ginseng Society International Conference, showed that red ginseng consumption improved barrier function and bone density in mice with disrupted intestinal microflora. The study demonstrated increased diversity of beneficial intestinal bacteria and reduced leaky gut syndrome symptoms. Additionally, Korea's Ministry of Food and Drug Safety recently recognized red ginseng's ability to help control blood sugar levels, as proven through clinical research by JungKwanJang, the leading global ginseng retail brand for 10 consecutive years.

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KT&G announced its 'Corporate Value-up Plan', targeting a 15% ROE by 2027, up from the current 10%. The company plans to return KRW 3.7 trillion to shareholders through 2027, including KRW 2.4 trillion in cash dividends and KRW 1.3 trillion in share buybacks. The plan includes streamlining Capex investment from KRW 3.5 trillion to KRW 2.4 trillion, while maintaining expected returns. KT&G will secure KRW 1 trillion through restructuring low-yield assets and plans to cancel 20% of outstanding shares by 2027. For 2023, the company approved an additional KRW 150 billion share buyback and cancellation, bringing total shareholder returns above 100%.

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KT&G reported strong Q3 2024 financial results with consolidated revenue of KRW 1.636 trillion and operating profit of KRW 415.7 billion, up 2.2% year-on-year. The company's three core businesses achieved record-high quarterly revenue exceeding KRW 1 trillion. The tobacco business revenue reached KRW 1.0478 trillion, up 7.7%, with operating profit growing 23.6% to KRW 333 billion. Overseas cigarette revenue surged 30.5% to KRW 419.7 billion. The company announced a Corporate Value-up Plan targeting 15% ROE by 2027 and additional shareholder returns, including KRW 150 billion share cancellation in 2024.

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Korea Ginseng Corp. US (KGCUS), also known as JungKwanJang, is celebrating the International Day of Charity and Chuseok with two major campaigns. The first is a Tesla Model 3 Giveaway with over 180 prizes, including luxury massage chairs and premium ginseng products. The sweepstakes runs from August 1, 2024, to January 31, 2025, with the first phase ending on September 30, 2024.

The second initiative is the 'Give the Gift of Health' campaign, partnering with Sprouts. For every ginseng product sold in September, JungKwanJang will donate an equal product to those in need. This campaign aligns with the company's commitment to wellness and philanthropy. JungKwanJang's Korean red ginseng, known for its health benefits, is promoted as an ideal gift for the Chuseok season and for maintaining health during colder months.

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KT&G (KTCIY) reported strong Q2 2024 financial results, with revenue up 6.6% to KRW 1.424 trillion and operating profit surging 30.6% to KRW 321.5 billion. The growth was primarily driven by robust performance in the Overseas Cigarette business, which saw revenue soar 35.3% to a record KRW 359.1 billion. The domestic NGP business also grew, with revenue up 10.8% and operating profit increasing 42.8%. KT&G reaffirmed its commitment to shareholder value, announcing an interim dividend of KRW 1,200 and plans to buy back and cancel 3.61 million shares worth KRW 350 billion. The company projects full-year revenue growth of 2.5-3%, with operating profit expected to remain flat.

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FAQ

What recent recommendation did ISS make about KT&G Corporation's Board of Directors' proposals?

ISS recommended voting against KT&G Corporation's Board of Directors' proposals.

Why did KT&G Corporation express concerns about ISS' recommendation?

KT&G Corporation expressed concerns about ISS' reliance on data provided by dissident shareholder Flashlight Capital Partners, impacting overseas business performance analysis.

What were the concerns raised regarding ISS' recommendations against CEO nominee Kyung-man Bang and other candidates?

KT&G Corporation raised concerns about inconsistencies between ISS' recommendations and its proxy voting guidelines, highlighting the rigorous CEO selection processes and Board-endorsed Outside Candidate director candidacy.

What issues were identified in the discussions between ISS, FCP, and KT&G Corporation?

KT&G Corporation raised concerns over export business profitability data discrepancies, misinformation, and interactions between ISS, FCP, and the company.

How does KT&G Corporation plan to address the concerns and engage with stakeholders?

KT&G Corporation seeks to engage constructively with stakeholders, address concerns, and ensure shareholder value through transparent discussions.
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232.56M
Tobacco Manufacturing
Manufacturing
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South Korea
Daejeon