Feeling someone( maybe GLC) is buying BAT. Many big Cap stocks are being dumped bcos of LockDown and next Qr results are going very South...BAT results is actually getting Better with LockDown. Surely Runners for GLC are Not blind not to see it
over the last few months : checking on social media channels and a roadside area where mall working smokers usually smoke (as a sample) - i notice less complaints about unable to get illicit cigarette stock as well as more illegal boxes on the floor. therefore I do not expect this quarter to be better than last year's quarter. Delighted if proven wrong though!
Maybe next 2 days results will be Out. BAT profit (hence Dividend ) should depends on Premium Cigs rather than KYO and RothMans ( competing with illegal and Local Brands ) Local Brands that did not pay Taxes are replacing Cigs from Indonesia ( due to Raging Covid there ) However Local Brands Cost are moving rapidly Up due to small manufacturing scale.
Imported premium Brand( illegal) has plunge 70% not bcos of very effective Checking but rather the logistics is Killing their profit rapidly.
Killing illegal Premium Brands would provide a Cushion for Falling demand of BAT premium Brand due current economic situation.
My estimate a QoQ increase from 8--10% Or 27% increase YoY ----Maybe RM 69mil profit
There is a critical shortages of Bangla and Indon in Malaysia. Therefore i think illegal Cigs Runners are also in shortages ( Road side store need people to Sell and daily Delivery--cannot store large quantity )-----BAT Legal Stores are less likely affected by labor shortages, but Sales will also drop due LockDown / no job----That why i think low ends like KYO and Rothsman will suffer while Premium Cigs will still survived ( profit margin for Premium Cigs is almost 2X KYO )
QoQ and YoY numbers are within expectation----I didnT finished last Quarter Dividend yet ( no where to spend ) I believe BAT is a True Arabian Horse in 2021 / 22 ( Out Standing in all earnings aspect and always fall within Expectation )
How is this qr not good...1/6 FMCO we get better profit than 1Q2Q3Q201Q21 and only a little short of 4Q20. Notably margin has increased by a bit, and is at the highest since 4Q19. This shows premium segment gain
I think in August BAT will import Vape for Distribution ( pay 10% Sales Tax ) Quarter Results for 2nd Half of 2021 will Change very Radically ( 1--1.5mil Malaysia Vape users ) Each Vaper will spend about RM150 or 300 per month ( about 450 / 900 per Qr ) If I take the High side, RM900 * 1.5m, Malaysian Vapers spend about 1.35Bil / Quarter----If BAT can capture 50%---------It is 675mil Extra Reveenue / Quarter---However Vape is also very competitive Market----I have No idea what BAT's profit Margin yet But it will be PROFIT
As for Vape Manufacturing License which BAT is dying to get----Parliament Debate and Standard selection is required. However I believe Malaysian Gov will select British Standard----Guess what BAT is already Manufacturing Vape in England
Although the arrival( distribution ) of Heat-Not-Burn (HNB) product is plan for End 2021 launching But bcos of Covid, maybe it will be delay---HNB is next big, big product after Vape. As a matter of fact 45% of Japanese smokers already switch from Burning Raw Tobacco leaves to HNB. Current patent lawsuit (HNB) between 2 Giants ( Philip Morris vs BAT ) show that HNB will replace Traditional Smoking Method sooner than expected
Without a Doubt, BAT will Capture huge Malaysia market share of Both VAPE and HNB bcos BAT already Got a International Followings for Vape and HNB, about 9millions. Whatever Malaysia market share BAT lost after Gov banned public smoking will return back in 2022 ---about 1.0Billion plus Revenue per quarter Or 70 cents Dividend ( finger Crossed )
Although the arrival( distribution ) of Heat-Not-Burn (HNB) product is plan for End 2021 launching But bcos of Covid, maybe it will be delay---HNB is next big, big product after Vape. As a matter of fact 45% of Japanese smokers already switch from Burning Raw Tobacco leaves to HNB. Current patent lawsuit (HNB) between 2 Giants ( Philip Morris vs BAT ) show that HNB will replace Traditional Smoking Method sooner than expected
Without a Doubt, BAT will Capture huge Malaysia market share of Both VAPE and HNB bcos BAT already Got a International Followings for Vape and HNB, about 9millions. Whatever Malaysia market share BAT lost after Gov banned public smoking will return back in 2022 ---about 1.0Billion plus Revenue per quarter Or 70 cents Dividend ( finger Crossed )
major concern 1. lockdown smoker smoke less at home sinve Jun till now end Jul. 2. covid drags on, consumer pocket dried up 3. c3 and c4 expire in aug. these 2 are big one. 4. fighting illigal cig = fighting corruption. 5. parliament in a mess, bo lat for any law changes include vape regulation. vape legalised = hell break loose, all illigal business sudden all became legal. the list goes on..
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
JJchan
7,182 posts
Posted by JJchan > 2021-07-09 18:02 | Report Abuse
When Qwek Len Chan ( owner of Hong Leong )wants to Buy, he always send HLG to drop
the price First. I built many ceramic Tile production lines for Him