The new cess of a half sen for every cigarette stick sold to be borne by the manufacturer will not change British American Tobacco's earnings forecast, according to Kenanga Research.

The stockbroking research firm has recommended to 'maintain hold with unchanged target price of RM40.10' for the company's shares.

'The impact on financial year's bottomline is only cess two per cent decrease to RM766.8 million (RM780.2 million without cess) as the new tax is only effective for the remaining four months of this year,' Kenanga said.

'We believe the bottomline impact is moot given that any duty and/or excise hikes are usually passed on to end customers, leaving tobacco manufacturers' bottomline intact,' it said. -- Bernama