British American Tobacco (Malaysia) Berhad (KLSE:BAT) - Share price, News & Analysis

BAT fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	2/6
Past Performance	3/6
Financial Health	2/6
Dividends	2/6

BAT Stock Overview

British American Tobacco (Malaysia) Berhad manufactures, imports, and sells cigarettes, pipe tobaccos, cigars, and other tobacco products primarily in Malaysia.

Rewards

Trading at 49% below our estimate of its fair value

Earnings are forecast to grow 4.8% per year

Risk Analysis

Debt is not well covered by operating cash flow

Dividend of 8.91% is not well covered by earnings or forecast to be in the next 3 years

British American Tobacco (Malaysia) Berhad Competitors

Price History & Performance

Summary of all time highs, changes and price drops for British American Tobacco (Malaysia) Berhad
Historical stock prices
Current Share Price	RM11.00
52 Week High	RM15.24
52 Week Low	RM11.00
Beta	0.70
1 Month Change	-13.11%
3 Month Change	-11.86%
1 Year Change	-22.75%
3 Year Change	-61.81%
5 Year Change	-74.67%
Change since IPO	-21.43%

Recent News & Updates

May 30

British American Tobacco (Malaysia) Berhad's (KLSE:BAT) Dividend Is Being Reduced To RM0.17

The board of British American Tobacco (Malaysia) Berhad ( KLSE:BAT ) has announced that the dividend on 24th of June...

Shareholder Returns

	BAT	MY Tobacco	MY Market
7D	-4.3%	2.3%	-1.2%
1Y	-22.8%	-7.1%	-8.7%

Return vs Industry: BAT underperformed the MY Tobacco industry which returned -7.1% over the past year.

Return vs Market: BAT underperformed the MY Market which returned -8.7% over the past year.

Price Volatility

Is BAT's price volatile compared to industry and market?
BAT volatility
BAT Average Weekly Movement	2.7%
Tobacco Industry Average Movement	4.0%
Market Average Movement	5.5%
10% most volatile stocks in MY Market	11.4%
10% least volatile stocks in MY Market	2.9%

Stable Share Price: BAT is less volatile than 75% of MY stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: BAT's weekly volatility (3%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1912	400	Nedal Salem	https://www.batmalaysia.com

British American Tobacco (Malaysia) Berhad manufactures, imports, and sells cigarettes, pipe tobaccos, cigars, and other tobacco products primarily in Malaysia. It markets its products under the Dunhill, Peter Stuyvesant, Rothmans, KYO, Pall Mall, Kent, and Benson & Hedges brand names. The company was founded in 1912 and is headquartered in Kuala Lumpur, Malaysia.

British American Tobacco (Malaysia) Berhad Fundamentals Summary

How do British American Tobacco (Malaysia) Berhad's earnings and revenue compare to its market cap?
BAT fundamental statistics
Market Cap	RM3.14b
Earnings (TTM)	RM274.04m
Revenue (TTM)	RM1.10b

11.5x

P/E Ratio

2.9x

P/S Ratio

Is BAT overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
BAT income statement (TTM)
Revenue	RM1.10b
Cost of Revenue	RM436.87m
Gross Profit	RM661.94m
Other Expenses	RM387.90m
Earnings	RM274.04m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.96
Gross Margin	60.24%
Net Profit Margin	24.94%
Debt/Equity Ratio	205.4%

How did BAT perform over the long term?

See historical performance and comparison

Dividends

8.9%

Current Dividend Yield

98%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is BAT undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for BAT?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for BAT. This is calculated by dividing BAT's market cap by their current preferred multiple.
What is BAT's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	RM3.14b

BAT key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	3.5x
Enterprise Value/EBITDA	9.3x
PEG Ratio	2.4x

Price to Earnings Ratio vs Peers

How does BAT's PE Ratio compare to its peers?

BAT PE Ratio vs Peers

The above table shows the PE ratio for BAT vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	20.5x

Forward PE

Price-To-Earnings vs Peers: BAT is good value based on its Price-To-Earnings Ratio (11.5x) compared to the peer average (20.5x).

Price to Earnings Ratio vs Industry

How does BAT's PE Ratio compare vs other companies in the Tobacco Industry?

Price-To-Earnings vs Industry: BAT is good value based on its Price-To-Earnings Ratio (11.5x) compared to the Asian Tobacco industry average (12.5x)

Price to Earnings Ratio vs Fair Ratio

What is BAT's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

BAT PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	11.5x
Fair PE Ratio	17.8x

Price-To-Earnings vs Fair Ratio: BAT is good value based on its Price-To-Earnings Ratio (11.5x) compared to the estimated Fair Price-To-Earnings Ratio (17.8x).

Share Price vs Fair Value

What is the Fair Price of BAT when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: BAT (MYR11) is trading below our estimate of fair value (MYR21.55)

Significantly Below Fair Value: BAT is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: BAT is poor value based on its PEG Ratio (2.4x)

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Future Growth

How is British American Tobacco (Malaysia) Berhad forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

4.8%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: BAT's forecast earnings growth (4.8% per year) is above the savings rate (3.6%).

Earnings vs Market: BAT's earnings (4.8% per year) are forecast to grow slower than the MY market (9.9% per year).

High Growth Earnings: BAT's earnings are forecast to grow, but not significantly.

Revenue vs Market: BAT's revenue (4.8% per year) is forecast to grow slower than the MY market (5.2% per year).

High Growth Revenue: BAT's revenue (4.8% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: BAT's Return on Equity is forecast to be very high in 3 years time (74.6%).

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Past Performance

How has British American Tobacco (Malaysia) Berhad performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-21.7%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: BAT has high quality earnings.

Growing Profit Margin: BAT's current net profit margins (24.9%) are higher than last year (23.1%).

Past Earnings Growth Analysis

Earnings Trend: BAT's earnings have declined by 21.7% per year over the past 5 years.

Accelerating Growth: BAT's earnings growth over the past year (7.8%) exceeds its 5-year average (-21.7% per year).

Earnings vs Industry: BAT earnings growth over the past year (7.8%) underperformed the Tobacco industry 10%.

Return on Equity

High ROE: Whilst BAT's Return on Equity (76.59%) is outstanding, this metric is skewed due to their high level of debt.

Discover strong past performing companies

Financial Health

How is British American Tobacco (Malaysia) Berhad's financial position?

Financial Health Score

2/6

Financial Health Score 2/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: BAT's short term assets (MYR878.2M) do not cover its short term liabilities (MYR970.7M).

Long Term Liabilities: BAT's short term assets (MYR878.2M) exceed its long term liabilities (MYR13.6M).

Debt to Equity History and Analysis

Debt Level: BAT's net debt to equity ratio (187.4%) is considered high.

Reducing Debt: BAT's debt to equity ratio has increased from 91.5% to 205.4% over the past 5 years.

Debt Coverage: BAT's debt is not well covered by operating cash flow (16.1%).

Interest Coverage: BAT's interest payments on its debt are well covered by EBIT (22.9x coverage).

Balance Sheet

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Dividend

What is British American Tobacco (Malaysia) Berhad current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

8.91%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: BAT's dividend (8.91%) is higher than the bottom 25% of dividend payers in the MY market (2.15%).

High Dividend: BAT's dividend (8.91%) is in the top 25% of dividend payers in the MY market (4.91%)

Stability and Growth of Payments

Stable Dividend: BAT's dividend payments have been volatile in the past 10 years.

Growing Dividend: BAT's dividend payments have fallen over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its high payout ratio (97.9%), BAT's dividend payments are not well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (248.7%), BAT's dividend payments are not well covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

1.5yrs

Average management tenure

CEO

Nedal Salem (51 yo)

0.67

Tenure

RM1,893,551

Compensation

Mr. Nedal Louay Salem has been a Managing Director at British American Tobacco (Malaysia) Berhad since October 13, 2021 and also serves as its Non-Independent Executive Director since September 1, 2021. He...

CEO Compensation Analysis

Compensation vs Market: Nedal's total compensation ($USD430.45K) is about average for companies of similar size in the MY market ($USD439.35K).

Compensation vs Earnings: Insufficient data to compare Nedal's compensation with company performance.

Leadership Team

Experienced Management: BAT's management team is not considered experienced ( 1.5 years average tenure), which suggests a new team.

Board Members

Experienced Board: BAT's board of directors are considered experienced (3.3 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/25 00:00
End of Day Share Price	2022/06/24 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31