Global asset management giant Capital Group has significantly expanded its portfolio, acquiring a substantial stake exceeding 5 percent in leading South Korean tobacco company KT&G. This strategic investment further solidifies KT&G’s appeal among prominent international shareholders.
KT&G officially announced in a recent regulatory filing that Capital Research and Management Company, the investment management division of Capital Group, had secured a 5.61 percent ownership stake through a series of purchases completed on April 22 and May 4.
This significant acquisition positions Capital Group firmly among KT&G’s elite cadre of major foreign shareholders, which also includes financial powerhouses such as BlackRock, First Eagle Investment Management, and Singapore’s sovereign wealth fund, GIC.
Following this news, KT&G shares surged to a record high of 183,500 won ($125), marking its first close above the 180,000 won threshold. This remarkable performance reflects sustained foreign investor interest and buying activity in Korean equities, with foreign ownership of KT&G’s outstanding shares now reaching an impressive 45.5 percent.
This heightened investor interest aligns with KT&G’s robust financial performance, significantly bolstered by surging overseas cigarette sales.
For the first quarter, KT&G reported an impressive 14.3 percent year-on-year rise in revenue, reaching 1.7 trillion won, alongside a significant 27.7 percent increase in operating profit to 364.5 billion won. The company explicitly attributed this strong growth to its rapidly expanding international business, reiterating its steadfast commitment to delivering enhanced shareholder returns, including prospects for higher dividends.
An analyst from NH Investment & Securities commented, “KT&G is well-positioned to continue providing industry-leading shareholder returns, potentially through further share buybacks and cancellations in the second half, especially as its robust overseas cigarette sales persist.”
