“KT&G to return 5 trillion won to shareholders over four years; double-digit dividend growth expected” ... Kakao’s target price cut 9% despite platform growth [Stocktopia]

[Financial News] Here is a roundup of reports from major securities firms on the morning of November 6.
KT&G Corporation is expected to steadily increase its dividend per share, supported by a new shareholder-return policy and growth in its overseas cigarette business. Kakao Corp. was credited with driving third-quarter revenue growth through its platform business, but its target price was lowered. BGF Retail Co., Ltd. was seen as potentially gaining appeal as a defensive stock thanks to stable earnings and an industry recovery, despite third-quarter operating profit falling short of market expectations.
◆ KT&G (033780)— KIWOOM Securities Co., Ltd. / Researcher Park Sang-jun
- Target price: 264,000 won (raised 5.6%, from 250,000 won) | Previous day’s closing price: 194,200 won
- Investment rating: Buy (maintained)
KIWOOM Securities Co., Ltd. raised its target price for KT&G Corporation to 264,000 won, saying the company could increase dividends over the medium to long term, supported by its new shareholder-return policy and growth in its overseas cigarette business.
KT&G Corporation plans to raise its annual dividend per share (DPS) this year to at least 8,000 won. From 2027 to 2030, it plans to provide a total of 5 trillion won in baseline shareholder returns, comprising 3.8 trillion won in cash dividends and 1.2 trillion won in share buybacks and cancellations. It also plans to raise its dividend payout ratio to at least 75% by 2030.
Researcher Park Sang-jun said, “Given that four years of share buybacks and cancellations could reduce the number of shares outstanding by about 6% and that the dividend payout ratio could gradually rise, DPS could post an average annual growth rate in the double digits from 2026 to 2030.”
However, the improvement in earnings could lose momentum in the fourth quarter due to factors such as a stronger won and higher labor costs. Even so, the analysis is that dividends per share can continue to rise as the number of shares falls and the payout ratio increases.
◆ Kakao Corp. (035720)— IBK Investment & Securities / Researcher Lee Seung-hoon
- Target price: 48,000 won (cut 9.4%, from 53,000 won) | Previous day’s closing price: 32,200 won
- Investment rating: Buy (maintained)
IBK Investment & Securities lowered its target price for Kakao Corp. to 48,000 won, while noting that its platform business drove revenue growth in the third quarter.
According to IBK Investment & Securities, Kakao Corp.’s third-quarter operating profit rose 7.4% year over year to 240.3 billion won, broadly in line with market expectations. Talk Biz saw faster growth in display advertising, while Pay and Mobility also performed well. However, losses in the artificial intelligence (AI) segment widened by 18 billion won compared with a year earlier.
Kakao Corp. is pursuing a corporate spin-off that would split the company into the continuing entity Kakao X, which would handle the KakaoTalk-based platform, and newly established Kakao AI, which would handle AI, advertising and commerce.
Researcher Lee Seung-hoon said, “After the spin-off, Kakao AI will be able to focus investment on its AI business without the burden of supporting subsidiaries,” adding, “Inefficiencies in decision-making and capital allocation will also be greatly eliminated.”
The assessment is that the split will create a structure that allows the company to focus investment on its AI business.※ Talk BizThis is the business segment for advertising and commerce, including gift services, built around KakaoTalk. It is considered a key pillar of Kakao’s platform revenue.
◆ BGF Retail Co., Ltd. (282330)— Korea Investment & Securities Co., Ltd. / Researcher Myung-joo Kim
- Target price: 185,000 won (maintained) | Previous day’s closing price: 150,200 won
- Investment rating: Buy (maintained)
Korea Investment & Securities Co., Ltd. maintained its target price of 185,000 won for BGF Retail Co., Ltd., saying supply-and-demand conditions and the industry environment were favorable, despite the company’s third-quarter operating profit falling short of market expectations.
In the third quarter, same-store sales growth was sluggish in July and August due to a base effect from the distribution of consumer recovery vouchers last year. Higher depreciation expenses following the opening of the Busan logistics center and lower earnings at logistics subsidiary BGF Logis due to rising oil prices also weighed on results.
Researcher Myung-joo Kim said, “Thanks to stable earnings and an industry that has bottomed out, we expect BGF Retail Co., Ltd. to continue serving as a defensive stock in the market.” Kim forecast that same-store sales growth in the fourth quarter would be at least 1 percentage point higher than in the third quarter.
A further rise in oil prices was cited as a risk, as it could again increase pressure on the subsidiary’s earnings. However, the analysis is that convenience store stocks, which are relatively less affected by external factors, could become more attractive when stock-market volatility rises.

[email protected] Seong Min-seo Reporter