British American Tobacco CFO Soraya Benchikh Steps Down

British American Tobacco announced the departure of Soraya Benchikh as Chief Financial Officer. The company is one of the world's largest tobacco producers, with a portfolio of over 200 brands, including Lucky Strike, Dunhill, and Rothmans. Net sales are distributed across the US, Americas and Europe, and Asia/Pacific/Middle East/Africa.

British American Tobacco (Malaysia) Berhad (BAT) has announced the departure of Soraya Benchikh as Chief Financial Officer (CFO). The company, a subsidiary of the global tobacco giant British American Tobacco, operates in Malaysia and is a significant player in the country's tobacco market. This move comes amidst a broader industry shift, with the company navigating regulatory changes and market evolution.

Current Valuation and Investment Opportunities

BAT Malaysia trades at a 35% discount to its intrinsic value, as estimated by discounted cash flow (DCF) analysis [1]. The stock is currently priced at MYR 4.90, offering a 12.04% dividend yield and a trailing price-to-earnings (P/E) ratio of 7.32. Analysts recommend buying the stock at MYR 4.90 with a 12-month target of MYR 6.77, highlighting its margin of safety in a regulated sector.

The company's strong fundamentals include a 48.47% return on equity (ROE), MYR 191.10 million in net income, and a stable cash flow with a high dividend yield. These attributes make BAT an attractive option for income-focused investors seeking defensive equities.

Defensive Positioning and Market Dynamics

BAT Malaysia operates in a maturing tobacco market, with heated tobacco products (HTPs) and anti-smoking alternatives driving growth. The company's flagship Dunhill brand remains resilient, with a 0.7 percentage point market share gain in 2025. However, regulatory risks, such as tobacco taxes and black market activity (currently at 54.8%), pose challenges.

The company'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 that BAT can navigate regulatory shifts without compromising its financial stability.

Investment Thesis and Risks

For value investors, BAT Malaysia offers a rare combination of undervaluation, defensive positioning, and income generation. Its low P/E ratio, coupled with a high dividend yield and strong balance sheet, creates a margin of safety in a sector often criticized for its cyclicality.

However, investors should remain cautious about regulatory changes, particularly in the vapor and HTP segments. The company's high payout ratio also leaves less room for reinvestment in innovation.

Conclusion

The departure of Soraya Benchikh as CFO is a notable change for BAT Malaysia, but it does not significantly alter the company's investment thesis. The stock'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, BAT offers a unique opportunity to capitalize on a mature business in a regulated sector.

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