Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Event-Driven

<ul>
<li>In this insight, we discuss the alpha generation through companies that have been buying back their shares in the Korean stock market in July and August 2024.</li>
<li>On average, the share buyback announcements by 46 companies represented 2% of outstanding shares.</li>
<li>Major companies that have announced share buybacks in Korea in the past two months include KT&amp;G, Mirae Asset Securities, and POSCO Holdings. </li>
</ul>


In this insight, we discuss the alpha generation through companies that have been buying back their shares in the Korean stock market in July and August 2024.
On average, the share buyback announcements by 46 companies represented 2% of outstanding shares.
Major companies that have announced share buybacks in Korea in the past two months include KT&amp;G, Mirae Asset Securities, and POSCO Holdings. 


Alpha Generation Through Share Buybacks in Korea: Bi-Monthly (July and August 2024)

Equity Bottom-Up

<ul>
<li>In this insight, we provide an update of KT&amp;G Corporation (033780 KS) which is a strong candidate for outperformance amid increased signs of market fears. </li>
<li>We continue to believe that there is an increasing probability of cigarette price hikes in Korea in 2H24. Last time that KT&amp;G hiked its cigarette prices was in January 2015.</li>
<li>The company's shareholder return policy is to provide cash dividends of 1.8 trillion won and share buyback/cancellations worth 1 trillion won from 2024 to 2026. </li>
</ul>


In this insight, we provide an update of KT&amp;G Corporation (033780 KS) which is a strong candidate for outperformance amid increased signs of market fears. 
We continue to believe that there is an increasing probability of cigarette price hikes in Korea in 2H24. Last time that KT&amp;G hiked its cigarette prices was in January 2015.
The company's shareholder return policy is to provide cash dividends of 1.8 trillion won and share buyback/cancellations worth 1 trillion won from 2024 to 2026. 


KT&G: A Strong Candidate for Outperformance Amid Increased Signs of Market Fears

<ul>
<li>KT&amp;G announced that it will buy back 3.47 million shares (2.5% of outstanding shares) and cancel them. This would be the first share cancellation for KT&amp;G in 14 years. </li>
<li>If the company's DPS is 5,200 won for 2023 fiscal year, this would represent dividend yield of 6.2% at current prices.</li>
<li>Although we have a positive view on KT&amp;G's share buyback and cancellation of 3.47 million shares, the company could do much more to improve its shareholder returns to its shareholders. </li>
</ul>


KT&amp;G announced that it will buy back 3.47 million shares (2.5% of outstanding shares) and cancel them. This would be the first share cancellation for KT&amp;G in 14 years. 
If the company's DPS is 5,200 won for 2023 fiscal year, this would represent dividend yield of 6.2% at current prices.
Although we have a positive view on KT&amp;G's share buyback and cancellation of 3.47 million shares, the company could do much more to improve its shareholder returns to its shareholders. 


KT&G: First Shares Cancellation in 14 Years

<ul>
<li>On 3 November, KT&amp;G announced that it will buy back 350 billion won worth of common shares (3.7 million shares).</li>
<li>KT&amp;G has mentioned that it could increase its DPS by at least 200 won in 2022. Assuming DPS of 5,000 won in 2022 would suggest a dividend yield of 5.3%. </li>
<li>KT&amp;G had another solid results in 3Q 2022 slightly beating the consensus sales and operating profit estimates.</li>
</ul>


On 3 November, KT&amp;G announced that it will buy back 350 billion won worth of common shares (3.7 million shares).
KT&amp;G has mentioned that it could increase its DPS by at least 200 won in 2022. Assuming DPS of 5,000 won in 2022 would suggest a dividend yield of 5.3%. 
KT&amp;G had another solid results in 3Q 2022 slightly beating the consensus sales and operating profit estimates.


KT&G Announces a Share Buyback Worth 350 Billion Won

<ul>
<li>On 26 October, a Singaporean private equity firm called Flashlight Capital Partners started to go activist on KT&amp;G demanding that the company spin-off its ginseng business to improve shareholder value.</li>
<li>While a spin-off of the ginseng business is not likely near term, the company could buyback more shares and sell more non-core assets which could soothe Flashlight Capital Partners.</li>
<li>Back in June 2022, we wrote a prescient insight called<em> KT&amp;G Is a Prime Candidate for Corporate Activism in Korea. </em>
</li>
</ul>


On 26 October, a Singaporean private equity firm called Flashlight Capital Partners started to go activist on KT&amp;G demanding that the company spin-off its ginseng business to improve shareholder value.
While a spin-off of the ginseng business is not likely near term, the company could buyback more shares and sell more non-core assets which could soothe Flashlight Capital Partners.
Back in June 2022, we wrote a prescient insight called KT&amp;G Is a Prime Candidate for Corporate Activism in Korea. 



Flashlight Capital Partners Goes Activist on KT&G

South Korea

KT&G Corporation processes, produces, and sells cigarettes and other tobacco products.  The Company, through its subsidiaries, manufactures ginseng products such as red ginseng tea and herbal medicines.  KT&G is also involved in real estate development of its former factory sites.

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KT&G Corporation (033780 KS)

KT&G: A Strong Candidate for Outperformance Amid Increased Signs of Market Fears

In this insight, we provide an update of KT&G Corporation (033780 KS) which is a strong candidate for outperformance amid increased signs of market...

Douglas Kim

KT&G: First Shares Cancellation in 14 Years

KT&G announced that it will buy back 3.47 million shares (2.5% of outstanding shares) and cancel them. This would be the first share cancellation...

Douglas Kim

Flashlight Capital Partners Goes Activist on KT&G

On 26 October, a Singaporean firm called Flashlight Capital Partners started to go activist on KT&G demanding that the company spin-off its ginseng...

Douglas Kim

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Alpha Generation Through Share Buybacks in Korea: Bi-Monthly (July and August 2024)

We discuss the alpha generation through companies that have been buying back their shares in the Korean stock market in July and August 2024.

Douglas Kim

KT&G: A Strong Candidate for Outperformance Amid Increased Signs of Market Fears

In this insight, we provide an update of KT&G Corporation (033780 KS) which is a strong candidate for outperformance amid increased signs of market...

Douglas Kim

KT&G: First Shares Cancellation in 14 Years

KT&G announced that it will buy back 3.47 million shares (2.5% of outstanding shares) and cancel them. This would be the first share cancellation...

Douglas Kim

KT&G Announces a Share Buyback Worth 350 Billion Won

On 3 November, KT&G announced that it will buy back 350 billion won worth of common shares (3.7 million shares). KT&G had another solid results in...

Douglas Kim

Flashlight Capital Partners Goes Activist on KT&G

On 26 October, a Singaporean firm called Flashlight Capital Partners started to go activist on KT&G demanding that the company spin-off its ginseng...

Douglas Kim