Global asset management giant BlackRock has increased its stake in KT&G, signaling growing confidence among foreign investors in the South Korean tobacco and consumer products company's long-term growth prospects and shareholder return policies.
According to a regulatory filing on Thursday, BlackRock raised its ownership in KT&G to 6.15% from 5.01%, acquiring an additional 467,350 shares over the past several months. The investment was reported as a passive holding for investment purposes.
The move follows a similar increase by U.S.-based Capital Group, which recently expanded its stake in KT&G to 7.21%. As a result, foreign investors now own more than 51% of the company's outstanding shares, highlighting strong international interest in the stock.
Market observers attribute the growing investment appetite to KT&G's improving earnings performance, expanding overseas operations, and commitment to shareholder-friendly policies.
KT&G reported first-quarter consolidated revenue of 1.70 trillion won ($1.24 billion) and operating profit of 364.5 billion won, up 14.3% and 27.6%, respectively, from a year earlier.
The company's overseas cigarette business was a key growth driver. Revenue and operating profit from the segment increased 24.6% and 56.1%, respectively, supported by strategic price adjustments and stronger sales in international markets.
Industry analysts said global institutional investors are increasingly favoring companies with stable cash flows, resilient earnings, and attractive shareholder return programs amid ongoing market uncertainty.
KT&G has long been recognized as one of Korea's leading dividend-paying companies. The company is expected to announce a new shareholder return policy later this year, including enhanced dividend plans, further strengthening investor expectations.
The company has also intensified communication with overseas investors through non-deal roadshows (NDRs) and investor relations activities led by Chief Executive Officer Bang Kyung-man and other senior executives. These efforts are believed to have contributed to stronger confidence among global investors.
Analysts noted that KT&G's overseas expansion strategy has become increasingly important as growth opportunities in the domestic tobacco market remain limited. The company has been expanding its presence in key international markets across Asia, the Middle East and Central Asia while improving profitability through localized marketing and pricing strategies.
A KT&G official said the recent stake increases by global asset managers demonstrate the capital market's confidence in the company's long-term vision and growth strategy.
"The expanded investments by global asset management firms reflect trust in KT&G's future growth potential and execution of its long-term business plans," the official said. "We will continue to enhance corporate value through profit growth in our core businesses, particularly overseas tobacco operations, while maintaining industry-leading shareholder return policies."
