KLCI Stock - BAT / 4162 - 2010 Quarter 1

BRITISH AMERICAN TOBACCO (M) BERHAD

Listing Date: 27.10.1961
Market: MAIN
Sector: CONSUMER
Par Value: 0.50
Major Industry: Tobacco
Sub Industry: Miscellaneous Tobacco
Market Cap : 285530000*43.4 = 12,392,002,000 (Large)
NTA per share : (628007-411618)/285530 = 0.76
P/BV : 43.4/0.76 = 57.1053 (High)
Forecast P/E now : (43.4-2.36)/2.4323 = 16.87 (High)
ROE : 166.95% (High but decreasing)
DY : 2.36/43.4*100 = 5.44% (Moderate)
Fixed Asset Turnover(3 year) : (2.3172+2.414+2.4266)/3 = 2.3859 (High)
Liquidity Ratio : 818744/367545 = 2.2276 (Moderate)
Receivables Collection Period : (171917+218980)/2/(3936615/365) = 18 days (Good)
My Target Price : 38.92+2.36 = 41.28 (PE 16, EPS 2.4323, DPS 2.36)
My Decision : NOT BUY (unless price below 42)
My Comment : Revenue still low, good cash flow, high debt, navps increased
Technical Support Price : 42.4, 41.6
Risk Rating : LOW

BRITISH AMERICAN TOBACCO (M) BERHAD provides day-to-day management and administrative services to its subsidiaries, which are principally engaged in the manufacture, importation and sale of cigarettes, pipe tobaccos and cigars. The Company's portfolio includes brands, such as Dunhill, Kent, Pall Mall, Benson & Hedges and Perilly’s. Its subsidiaries include Commercial Importers and Distributors Sdn. Bhd., which is engaged in investment holding; Commercial Marketers and Distributors Sdn. Bhd., which is engaged in the marketing and importation of cigarettes, pipe tobaccos and cigars; Rothmans Brands Sdn. Bhd., which is engaged holding trademarks; The Leaf Tobacco Development Corporation of Malaya Sdn. Bhd., which is engaged in the development and purchase of tobacco leaf; Tobacco Blenders and Manufacturers Sdn. Bhd., which provides warehousing space, and Tobacco Importers and Manufacturers Sdn. Bhd., which manufactures and sells cigarettes and other tobacco related products.

My notes based on 2010 Quarter 1 report (number in '000):-
- The Group’s volumes have declined by 2.9% in comparison to the same period last year impacted by consumers down trading and high levels of illicit trade
- Kent and Pall Mall which had grown by 0.2 and 0.3 percentage points respectively. Despite consumers down trading from the premium segment, Dunhill has remained resilient and maintained its market share for the year to date February in comparison to the same period last year. Within the premium segment, Dunhill has grown its market share by 0.7 percentage points
- The Group’s revenue was 1.3% higher, as higher excise led pricing and improved product mix was only partially offset by lower sales volumes. Profit from operations declined by 5.2% in comparison to the same period last year from higher costs of Dunhill Reloc packs and, timing of marketing and overhead expenditure. These additional costs were however partially offset by productivity and cost management initiatives implemented by the Group
- Estimate next 4Q eps after 2010 Q1 result announced = 2.4323(7% drop from 2.6154), estimate PE on current price 43.4 = 16.87(DPS 2.36)
- Estimate next 4Q eps after 2009 Q4 result announced = 2.4323, estimate highest/lowest PE = 17.82/16.06 (DPS 2.36)
- Estimate next 4Q eps after 2009 Q3 result announced = 2.4323, estimate highest/lowest PE = 17.99/16.1 (DPS 2.35)
- Estimate next 4Q eps after 2009 Q2 result announced = 2.8448, estimate highest/lowest PE = 16.36/14.54 (DPS 2.65)

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