Company Name: JT INTERNATIONAL BHD
Research House: MIDF
Financial results of JT International Bhd, the second largest tobacco manufacturer in Malaysia, are within expectation for the first half of the current financial year, say research firms.
OSK Research Sdn Bhd attributed the 19.6 per cent increase in JTI's total market share to its flagship value-for-money cigarette brand, Winston.
JTI also declared a first interim dividend of 15 sen per share, less 25 per cent tax, which is half of OSK's full-year estimated 30 sen per share.
"We are maintaining our dividend estimates as we are keeping our expectations in line with the management guidance of not declaring any special dividend for this financial year," it said in a research note.
However, JTI's second quarter financial year 2010 earnings before interest tax (EBIT) margin was 15.1 per cent lower compared with 16.2 per cent previously due to higher marketing expenditure incurred in the second quarter.
Earnings in the first half of this year were higher by 13.3 per cent to RM71.3 million as compared with RM63 million previously.
"The increase in both revenue and earnings were mainly driven by higher sales volume and higher cigarette prices," it said in its research note.
With an estimated long-term maintainable dividend per share of 33 sen and a required return of 6.16 per cent, MIDF said it will maintain its "Neutral Buy" with a target price of RM5.36. - Bernama