Stock Name: BAT
Company Name: BRITISH AMERICAN TOBACCO (M)
Research House: OSK
Company Name: BRITISH AMERICAN TOBACCO (M)
Research House: OSK
OSK Research has raised the revenue and net earning estimates of British American Tobacco (M) Bhd (BAT) by three per cent and five per cent respectively, upon updating the forecasts and tobacco industry volume.
Nevertheless, it said, BAT would continue to see its sales volume decline but this would be partially offset by higher selling prices.
"High excise duties will continue to cut into profits as we see net earnings falling 8.9 per cent year-on-year.
"Upon revising our earnings estimates on updating our forecasts, we raise our target price for BAT to RM41.00," OSK said in a note today.
It, however, maintained its 'sell' call on the company.
In a filing to Bursa Malaysia, BAT reported a lower pre-tax profit of RM959.181 million for financial year ended Dec 31, 2010 from RM1.005 billion previously.
Revenue, however, was higher at RM3.965 billion from RM3.923 billion previously.
Meanwhile, MIDF Research, in a note, has trimmed BAT's net profit forecast for this year after fine-tuning the expenses to incorporate an additional five per cent to cost from the Dunhill Reloc and also the premium lost with the ban of small packs as BAT has about 40 per cent exposure in this segment amid an increase in export volumes.
MIDF said this year was expected to be challenging with concern over the expected increase in excise duty in the upcoming budget and worsening situation with regards to illicit trading.
"The Asean Free Trade Area is expected to see a flood of foreign cigarettes that will increase competition in the market," it said.
ECMLibra Investment Research has revised the target price of BAT upwards to RM43.80 with the rolling-over to financial year 2011 earnings.
"However, we are cautious in our upgrade to 'hold' due to the negative headwinds from BAT''s steeper-than-industry-average loss of market share, expected spike in illicit trade following the steep duty increase last year," it said in a note. -- Bernama
Nevertheless, it said, BAT would continue to see its sales volume decline but this would be partially offset by higher selling prices.
"High excise duties will continue to cut into profits as we see net earnings falling 8.9 per cent year-on-year.
"Upon revising our earnings estimates on updating our forecasts, we raise our target price for BAT to RM41.00," OSK said in a note today.
It, however, maintained its 'sell' call on the company.
In a filing to Bursa Malaysia, BAT reported a lower pre-tax profit of RM959.181 million for financial year ended Dec 31, 2010 from RM1.005 billion previously.
Revenue, however, was higher at RM3.965 billion from RM3.923 billion previously.
Meanwhile, MIDF Research, in a note, has trimmed BAT's net profit forecast for this year after fine-tuning the expenses to incorporate an additional five per cent to cost from the Dunhill Reloc and also the premium lost with the ban of small packs as BAT has about 40 per cent exposure in this segment amid an increase in export volumes.
MIDF said this year was expected to be challenging with concern over the expected increase in excise duty in the upcoming budget and worsening situation with regards to illicit trading.
"The Asean Free Trade Area is expected to see a flood of foreign cigarettes that will increase competition in the market," it said.
ECMLibra Investment Research has revised the target price of BAT upwards to RM43.80 with the rolling-over to financial year 2011 earnings.
"However, we are cautious in our upgrade to 'hold' due to the negative headwinds from BAT''s steeper-than-industry-average loss of market share, expected spike in illicit trade following the steep duty increase last year," it said in a note. -- Bernama
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