KLCI Stock - BAT / 4162 - 2010 Quarter 2

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*43.86 = 12,523,345,800 (Very Large)
NTA per share : (637520-411618)/285530 = 0.79 (Increased)
P/BV : 43.86/0.79 = 55.519 (Decreased)
Forecast P/E now : (43.86-2.36)/2.4323 = 17.06 (High)
ROE : 161.05% (Decreased)
DY : 2.36/43.86*100 = 5.38% (Moderate)
Fixed Asset Turnover(3 year) : (2.2503+2.6417+2.3942)/3 = 2.4287 (High)
Liquidity Ratio : 894501/415173 = 2.1545 (Decreased)
Receivables Collection Period : (174121+163473)/2/(3952841/365) = 15 days (Better)
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 QbQ decreasing but profit recover some from it lowest profit, good cash flow, high debt and increased, navps increasing
Technical Support Price : 42.5
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 2 report (number in '000):-
- The Group’s volumes had declined by 1.6% for the six months to 30 June in comparison to the same period last year impacted by consumers down trading and high levels of illicit trade in tandem with the decline in industry volumes
- The Group has however performed commendably within the contracted industry recording a year to date May market share of 60.3%, up 0.3 percentage points as compared to the same period last year. This growth was delivered by the Group’s Global Drive Brands, Kent and Pall Mall. The Group continues to lead the premium segment of the market with Dunhill, Kent and Benson & Hedges, owning 73.9% of this segment for the year to date May
- For the six months to 30 June, the Group’s revenue was 1.5% higher compared to year 2009, from higher excise led pricing, partially offset by unfavourable pack size mix due the ban on packs less than 20 sticks and lower sales volumes. Profit from operations declined by 6.2% in comparison to the same period last year from lower volumes, higher costs of Dunhill Reloc packs and, timing of marketing and overhead expenditure
- Estimate next 4Q eps after 2010 Q2 result announced = 2.4323(7% drop from 2.6154), estimate PE on current price 43.86 = 17.06(DPS 2.36)
- Estimate next 4Q eps after 2010 Q1 result announced = 2.4323(7% drop from 2.6154), estimate highest/lowest PE = 17.53/16.31 (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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