Tobacco Giant Struggles with Market Challenges

  • British American Tobacco (Malaysia) shares fell after reporting lower first-quarter profit
  • Higher operating expenses, inflationary pressures, and higher cost of vapor products contributed to the decline in net profit
  • Quarterly revenue increased by 5.6% to MYR412.0 million
  • Hong Leong Investment Bank downgraded BAT Malaysia to sell from hold and cut its target price
  • Affin Hwong Investment Bank also trimmed the target price and maintained a sell rating on the stock

British American Tobacco (BAT) Malaysia’s shares dropped by 7.1% following the announcement of a lower first-quarter profit, which fell to MYR30.0 million from MYR40.3 million last year. The decline was attributed to increased operating expenses, inflationary pressures, and higher costs for vapor products. Despite achieving significant sales milestones with their vape brand Vuse, the company’s non-combustible offerings contribute limitedly to overall sales compared to combustible tobacco. Hong Leong Investment Bank downgraded BAT Malaysia to ‘sell’ from ‘hold’, and Affin Hwang Investment Bank also reduced its target price and maintained a sell rating on the stock.

Factuality Level: 8
Factuality Justification: The article provides accurate information about British American Tobacco (Malaysia)’s financial performance, including profit decline, revenue increase, and analyst reactions to the results. It also discusses the challenges faced by the company in the vape market. However, it lacks personal opinions or sensationalism.
Noise Level: 3
Noise Justification: The article provides relevant information about British American Tobacco (Malaysia)’s financial performance and market analysis from analysts’ perspectives, but it lacks in-depth analysis or exploration of long-term trends or possibilities. It does not hold powerful people accountable nor explore consequences on those who bear the risks. The article also could provide more actionable insights for readers.
Public Companies: British American Tobacco (Malaysia) (BAT Malaysia)
Key People: Sam Jun Kit (Analyst at Hong Leong Investment Bank), Peggie Wong Pei Chi (Analyst at Affin Hwang Investment Bank)

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Financial Relevance: Yes
Financial Markets Impacted: British American Tobacco (Malaysia) shares
Financial Rating Justification: The article discusses British American Tobacco (Malaysia)’s lower first-quarter profit, which led to a drop in its share price and downgrades from analyst firms. This impacts the company’s financial performance and stock value, making it relevant to financial topics.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the article.

Reported publicly: www.marketwatch.com