IF the feedback on the comment section of the popular i3 Investor platform could serve as an indicator, then it can be surmised that faith in the once bellwether British American Tobacco (M) Bhd is thinning with investors lamenting having ended up catching falling knife as they chased the stock’s downtrend.
Who could blame them as the share price of Malaysia’s only listed tobacco player which peaked at an all-time high of RM74.40 on Nov 30, 2014 is now a pale shadow of its former self as it hit an all-time low of RM5.20 yesterday (June 4) – a staggering 93% plunge.
Going a little back, The Edge attributed BAT Malaysia’s share price as having fallen to its lowest in nearly four decades – since 1987 – after the cigarette company reported a steep decline in its 1Q FY2025 profit.
Following the stock’s 11th consecutive session of decline, 20% or more than RM400 mil was wiped out from its market value on Tuesday (June 3) with BAT Malaysia ended up being Bursa Malaysia’s top loser after having nosedived 56 sen or 9.57% to RM5.29 with 2.47 million shares traded.
BAT Malaysia’s net profit fell by over 22.4% year-on-year (yoy) to RM23.27 mil for its 1Q FY2025 ended March 31, 2025 (1Q FY2024: RM29.99 mil) – the group’s lowest quarterly net profit in 20 years. Its revenue also tumbled 21.8% yoy to RM322 mil (1Q FY2024: RM411.97 mil).
On a quarter-on-quarter basis, BAT Malaysia’s net profit more halved from RM48.97 mil while its revenue also fell sharply from RM653.03 mil.
Despite the slump, BAT Malaysia declared a first interim dividend of 7.5 sen/share – its lowest in at least 20 years compared with 10 sen/share declared in 1Q FY2024.
The ‘meagre’ payout has made some investors wonder whether it is worth the risk to hold on to the stock as its defensive value has diminished substantially in the post COVID-19 period.
Commenting on the group’s 1Q FY2025 results, BAT Malaysia managing director Nedal Salem described the financial performance as having reflected a challenging operating landscape in Malaysia where the industry continued to be impacted by on-going high tobacco black market and softening demand driven by the early start of Ramadhan in 2025.
As it is incidences of illicit tobacco trade has seen a reduction to to 54.8% in January 2025 from 56.4% in January 2024 following intensified enforcement actions undertaken by the law enforcement authorities, especially the Royal Malaysian Customs Department.
“Despite the challenging operating landscape, the group’s flagship brand, Dunhill, continued to demonstrate strength, recording a 0.7 percentage point growth in market share compared to the same period last year,” observed Nedal who has been BAT Malaysia’s head honcho since Sept 1, 2021.
“This reflects Dunhill’s strength as the No. 1 brand in the country with 60 years of presence in Malaysia.”
On the Control of Smoking Products for Public Health Act 2024 and its related regulations (Act 852) that many investors feared could have adverse impact on BAT Malaysia’s business performance, Nedal added:
“We continue to view Act 852 as a crucial step in the right direction to regulate the tobacco and vapour industry in Malaysia.
“While 2025 will be a transitional year given the multiple measures that will take effect throughout the year, we’re fully prepared to navigate the phased implementation of Act 852.”
At 10.41am, BAT Malaysia was up 3 sen or 0.57% to RM5.27 with 131,400 shares traded, thus valuing the company at RM1.5 mil. – June 5, 2025
