KLCI Stock - BAT / 4162 - 2012 Quarter 1

BRITISH AMERICAN TOBACCO (M) BERHAD

My notes based on 2012 quarter 1 report (number in '000):-
- Revenue grew by 5.1% compared to same period last year in line with higher domestic volume as well as higher sub-contract manufacturing revenue. Gross profit however only increased by 3.1% mainly due to reversal of 14s machine impairment in Q1’ 2011 (RM11.6 million) and higher variable costs in 2012 coupled with higher distributor margin quantum this quarter following the change in the Group’s distribution model in Q3’ 2011. With the change from Company-owned to exclusive third party distributorship, the Group incurs a higher distributor margin to third party (hence lower gross profit) but this is mostly offset in lower own distribution costs

- Profit before tax increased by 8.8% than FY11Q1, higher than the increase in gross profit, mainly due to lower spend in marketing and distribution costs as explained above, as well as timing of brand related activities

- While the Group’s volume grew by 6.9% as compared to the previous quarter, profit before tax increased by 14.3% mainly due to absence of the one-off impact on merchandising assets from change in accounting policy in Q4’ 2011 (RM15 million), as well as lower marketing expenses due to timing of brand activities

- Estimate next 4Q eps after 2012 Q1 result announced = 431735*1.7/285530 = 2.7636, estimate PE on current price 55.4 = 19.02(DPS 2.85)
- Estimate next 4Q eps after 2011 Q4 result announced = 438386*1.8/285530 = 2.5705, estimate highest/lowest PE = 21.04/19.02 (DPS 2.76)
- Estimate next 4Q eps after 2011 Q3 result announced = (0.6173+0.6449)*2*1.05 = 2.6506, estimate highest/lowest PE = 18.77/15.45 (DPS 2.76)
- Estimate next 4Q eps after 2011 Q2 result announced = 1.2703*2 = 2.5406, estimate highest/lowest PE = 17.43/15.74 (DPS 2.7)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.6254*4 = 2.5016, estimate highest/lowest PE = 18.43/17.2 (DPS 2.4)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.5977*4*0.95 = 2.2713, estimate highest/lowest PE = 20.36/18.67 (DPS 2.41)
- Estimate next 4Q eps after 2010 Q2 result announced = 2.4323(7% drop from 2.6154), estimate highest/lowest PE = 19.56/16.8 (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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