3 Things About British American Tobacco Malaysia That Investors Should Know

British American Tobacco (M) Berhad (KLSE: BAT) is one of the biggest companies listed on Kuala Lumpur Stock Exchange.

The company focuses on the production and sale of cigarettes. It holds a portfolio of approximately 200 brands, including DUNHILL, PALL MALL, PETER STUYVESANT, BENSON & HEDGES, and KENT.

Here are three interesting things about the company.

Sustainable revenue and profit

In the past 10 years, BAT has grown revenue from RM 3.6 billion in 2006 to RM 4.6 billion in 2015. During the same period, net income has grown from RM 0.72 billion to RM 0.91 billion.

The company grew despite challenging business environment due to tax hikes – the most recent,which was a 40% rise in November 2015.

The latest excise hike, together with the introduction of GST, could break the winning streak of strong performances. Whether the company can continue to perform well in such an environment is still unknown.

Significant market share

According to the 2015 annual report, BAT accounted for 62.1% of the domestic legal market (Currently, the illegal market is estimated to be 36.9%).

BAT’s market share is driven by its flagship brand – DUNHILL which accounts for 46.9% of the total legal market.

PETER STUYVESANT which continued to show gains in market share in 2015, accounts for 6.4%, while PALL MALL holds a market share of 4.5%.

Majority shareholder

BAT is majority owned (50%) by British American Tobacco PLC (LON: BATS), one of the biggest cigarette company in the world.

The UK parent company, founded in 1902, is a global tobacco company with more than 200 brands sold in over 200 markets.

Thus, having such organisation as its major shareholders will give BAT significant advantages such as access to better purchasing power, management know-how, and others.

If you like what you've seen, you can get even more investing insights and analyses from The Motley Fool's weekly investing newsletter Take Stock Singapore. It's FREE, so do check it out here.

Also, like us on Facebook to follow our latest news and articles. The Motley Fool's purpose is to help the world invest, better.

The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.