BAT Finance Chief Benchikh Steps Down Amidst Global Tobacco Giant's Operations

British American Tobacco (BAT) announced that its finance chief, Benchikh, has stepped down. The company is a tobacco producer that sold 505 billion cigarettes in 2024, with a portfolio of over 200 brands including Lucky Strike, Dunhill, and Rothmans. Its net sales are distributed across the United States, Americas and Europe, and Asia/Pacific/Middle East/Africa.

British American Tobacco (BAT) has announced the departure of its finance chief, Benchikh. The company, a leading tobacco producer, reported selling 505 billion cigarettes in 2024, with a portfolio of over 200 brands including Lucky Strike, Dunhill, and Rothmans. BAT's net sales are distributed across the United States, Americas, Europe, and Asia/Pacific/Middle East/Africa.

The departure of the finance chief comes as BAT continues to navigate a challenging market landscape. Despite the industry's long-term headwinds from health trends, BAT has maintained a strong position in the market. The company's focus on premium segments and its parent company's global "Build a Smokeless World" strategy provide a roadmap for adaptation.

In Malaysia, British American Tobacco (Malaysia) Berhad (KLSE:BAT) has been a cornerstone of the tobacco industry. The company's robust fundamentals include a 48.47% ROE, MYR 191.10M net income, and a 12.04% dividend yield. A discounted cash flow (DCF) analysis estimates BAT's intrinsic value at MYR 7.54 per share, with the current price of MYR 4.90 implying a 35% discount [1].

Analysts recommend buying BAT at MYR 4.90 with a MYR 6.77 12-month target, emphasizing its margin of safety in a regulated sector. The stock's P/B ratio of 3.37 indicates that the market values its equity at a premium to book value, reflecting confidence in its intangible assets and brand strength.

The Malaysian tobacco market is evolving, with heated tobacco products (HTPs) and anti-smoking alternatives driving growth. While BAT Malaysia is phasing out its Vuse vapor products in Q3 2025 due to regulatory changes, its flagship Dunhill brand remains a dominant force. Dunhill's 60-year heritage and 0.7 percentage point market share gain in 2025 highlight its resilience in a competitive landscape.

Regulatory risks, such as tobacco taxes and black market activity (currently at 54.8%), remain challenges. However, BAT's debt-to-equity ratio of 1.35 is manageable, with an interest coverage ratio of 9.97 and a debt-to-free cash flow ratio of 4.09. These metrics suggest the company can navigate regulatory shifts without compromising its financial stability.

Investors should remain cautious about regulatory changes, particularly in the vapor and HTP segments. The black market's persistence also poses a threat to volume growth. Additionally, the company's high payout ratio, while attractive for dividends, leaves less room for reinvestment in innovation.

BAT's current valuation represents a compelling entry point for investors seeking high-quality, income-generating equities with a defensive edge. With a 35% discount to intrinsic value, a 12.04% yield, and a track record of operational excellence, the stock offers a unique opportunity to capitalize on a mature business in a regulated sector.

Investment Recommendation: Buy for income-focused investors with a 3–5 year horizon, with a stop-loss at MYR 4.00 to mitigate downside risk.

References:
[1] https://www.ainvest.com/news/british-american-tobacco-malaysia-berhad-compelling-play-defensive-sector-2508/