[%eoOY%] 
Research by HLIB
Hold (Maintain) - TP of RM9.22

"Lower sales volume"

BAT’s FY23 core PAT of RM193.1m (-31.5% YoY) was within ours but below consensus forecasts, accounting for 95% and 93% of full-year forecasts, respectively. Notably, despite a 1% decline in illicit market share, legal combustible volume for FY23 experienced a decline as the returned volume shifted towards the e-cigarette category. We anticipate this trend to persist, potentially limiting BAT’s combustible cigarette sales rebound if the illicit market share, currently at 55.6%, regains traction. Given the lack of robust earnings streams from new segments to fill the void left by the combustible cigarette segment, we opine that BAT’s earnings outlook remains challenging. We maintain HOLD recommendation with an unchanged TP of RM9.22 (WACC: 9.5%; TG:
0.0%).

Analyst:
Sam Jun Kit
[%bEmL%]

$KLSE-BAT 
Research by HLIB
Hold (Maintain) - TP of RM9.22

"Lower sales volume"

BAT’s FY23 core PAT of RM193.1m (-31.5% YoY) was within ours but below consensus forecasts, accounting for 95% and 93% of full-year forecasts, respectively. Notably, despite a 1% decline in illicit market share, legal combustible volume for FY23 experienced a decline as the returned volume shifted towards the e-cigarette category. We anticipate this trend to persist, potentially limiting BAT’s combustible cigarette sales rebound if the illicit market share, currently at 55.6%, regains traction. Given the lack of robust earnings streams from new segments to fill the void left by the combustible cigarette segment, we opine that BAT’s earnings outlook remains challenging. We maintain HOLD recommendation with an unchanged TP of RM9.22 (WACC: 9.5%; TG:
0.0%).

Analyst:
Sam Jun Kit
jksam@hlib.hongleong.com.my

$BAT / 4162 (BRITISH AMERICAN TOBACCO (MALAYSIA) BERHAD)