FREE Special Report: Duterte’s smoking ban and impact on LTG, SEVN, RRHI

PinoyInvestor’s Special Reports cover our partner brokers’ expert analysis on a range of topics affecting the stock market. These may include economic updates, sector analyses, upcoming IPOs, and more! Learn how you can use this report in the PinoyInvestor guide.

 

Our Partner Broker’s Analysis

Last May 16, President Rodrigo Duterte signed Executive Order 26 banning smoking in all public places, stationary or mobile. It also puts the establishment’s person-in-charge liable if smoking is tolerated in public places. Violators of the EO will be punished according to applicable penalties under the Republic Act 9211 or the Tobacco Regulation Act of 2003.

Designated Smoking Areas (DSA) will have to be properly regulated and are strictly identified for each type of establishment, and completely banned in some areas. Smokers will not be easily deterred by this, as their addiction will prompt them to look for DSAs or alternatives.

Nevertheless, it may have an effect on tobacco companies such as Philip Morris Fortune Tobacco Co. (PMFTC), which is integrated in LT Group (LTG) and on convenience store owners such as 7-11 Philippine Seven Corp. (SEVN) and Robinsons Retail Holdings Inc. (RRHI).

These companies have already registered lower cigarette sales. Casinos and bars were not specified in the EO, and will likely be unaffected by this.

 

Our Partner Broker’s Recommendation

On Robinsons Retail Holdings Corp. (RRHI): We maintain our fair value Target Price at PHP 91.60 per
share, with a HOLD rating.

On LT Group (LTG): PMFTC has already priced in the EO and, despite the lower sales volume, contributed higher equity earnings to LTG due to the implemented higher price points and a consumer trade-up to higher-value brands. We maintain our HOLD rating for LTG with consensus fair value Target Price estimate at PHP 17.42 per share.

Image source: ABS-CBN News

 

This report is prepared by PinoyInvestor’s partner broker below. Sign up to this stock broker to avail of their complete trading brokerage services:

AP Securities (formerly Angping & Associates Securities)
AP Securities (formerly Angping & Associates Securities)

AP Securities (formerly Angping & Associates Securities) is one of PinoyInvestor’s partners in delivering superior and reliable stock research reports that help Filipino investors make smart stock investing decisions! Learn more about them here.