KUALA LUMPUR (April 24): Maybank Investment Bank Bhd Research has maintained its Hold rating on British American Tobacco (Malaysia) Bhd with a target price of RM50.40 and said the company’s RM194.5 million 1Q12 core net profit (+9% YoY, +14% QoQ) accounted for 25% and 26% of its own and consensus forecasts respectively.
“Despite beaten-down ELPC market share and declining illicit cigarette consumption, the industry remains vulnerable to regulatory risks e.g. tax hikes and other legal sanctions. BAT's valuations have also overtaken its fundamentals; at 20x 2012 PER, it is trading at more than 1SD above its mean PER of 17x.
“We maintain our Hold call with an unchanged DCF-based TP of RM50.40 for its decent dividend yield of 4.4% and defensive earnings,” the research house said in a note Tuesday.
“Despite beaten-down ELPC market share and declining illicit cigarette consumption, the industry remains vulnerable to regulatory risks e.g. tax hikes and other legal sanctions. BAT's valuations have also overtaken its fundamentals; at 20x 2012 PER, it is trading at more than 1SD above its mean PER of 17x.
“We maintain our Hold call with an unchanged DCF-based TP of RM50.40 for its decent dividend yield of 4.4% and defensive earnings,” the research house said in a note Tuesday.
