Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

Philip Morris International / Equity Bottom-Up

<ul><li>Philip Morris International's Q1 results exceeded analyst expectations on the earnings front but were below par in terms of revenues despite some decent underlying momentum from IQOS, ZYN, and its combustible business.</li><li>The company's Q1 organic net revenues had solid growth.</li><li>This highlights the ongoing strength of IQOS as a step-up in pricing but was somewhat mitigated by anticipated HTU inventory movement.</li></ul>

Philip Morris International's Q1 results exceeded analyst expectations on the earnings front but were below par in terms of revenues despite some decent underlying momentum from IQOS, ZYN, and its combustible business.The company's Q1 organic net revenues had solid growth.This highlights the ongoing strength of IQOS as a step-up in pricing but was somewhat mitigated by anticipated HTU inventory movement.

Philip Morris International Inc.: IQOS & ILUMA Are Changing The Game – Key Drivers

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Thematic (Sector/Industry)

<ul>
<li>After a multi-year drop in ownership, Global EM fund exposure in the Tobacco sector is on the rise.</li>
<li>Tobacco remains heavily under-owned, but key EM funds are raising allocations, led by GQG Partners, Virtus, BNY Mellon and Allianz. </li>
<li>ITC Limited has been a key beneficiary of inflows and stands as the most widely owned stock in the sector, followed by KT&amp;G Corp.</li>
</ul>


After a multi-year drop in ownership, Global EM fund exposure in the Tobacco sector is on the rise.
Tobacco remains heavily under-owned, but key EM funds are raising allocations, led by GQG Partners, Virtus, BNY Mellon and Allianz. 
ITC Limited has been a key beneficiary of inflows and stands as the most widely owned stock in the sector, followed by KT&amp;G Corp.


Investors Return to Tobacco Stocks After Multi-Year Decline

<ul><li>Philip Morris ended 2022 on a positive note and delivered another all-around beat.</li><li>The company's volume increased significantly due to the ongoing IQOS development and steady cigarette volume.</li><li>Over a third of the total Philip Morris and more than 50% in 70 markets had smoke-free net revenues for the entire year.</li></ul>

Philip Morris ended 2022 on a positive note and delivered another all-around beat.The company's volume increased significantly due to the ongoing IQOS development and steady cigarette volume.Over a third of the total Philip Morris and more than 50% in 70 markets had smoke-free net revenues for the entire year.

Philip Morris International Inc.: Extended Long-Term Agreement With KT&G & Other Drivers

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>At the end of the further extended acceptance period, PMHH owns 93.11% of the shares of Swedish Match (obtained both through shares tendered and market purchases).</li>
<li>PMHH intends to initiate compulsory redemption under the Swedish Companies Act to acquire all remaining shares in Swedish Match and request delisting from Nasdaq Stockholm. PMI wins again.</li>
<li>Although the shares are still liquid, gross spread is 2 bps, and therefore there is no trade worth considering, in my view.</li>
</ul>


At the end of the further extended acceptance period, PMHH owns 93.11% of the shares of Swedish Match (obtained both through shares tendered and market purchases).
PMHH intends to initiate compulsory redemption under the Swedish Companies Act to acquire all remaining shares in Swedish Match and request delisting from Nasdaq Stockholm. PMI wins again.
Although the shares are still liquid, gross spread is 2 bps, and therefore there is no trade worth considering, in my view.


Philip Morris/​​Swedish Match: Squeeze-Out

<ul>
<li>PMI has obtained acceptances of 82.59%, waives the 90% acceptance condition and extends the acceptance period until 25 November (settlement on 2 December).</li>
<li>SWMA shares are trading at an all-time high of SEK 115.8. Gross spread is 0.17% (estimated annual return is 2.52%). The market discounts that the offer will be successful.</li>
<li>Done deal. PMI is ready to wait until claiming final victory, quite possibly in the further extended acceptance period. It should be able to squeeze-out and delist. <strong>Accept offer</strong>.</li>
</ul>


PMI has obtained acceptances of 82.59%, waives the 90% acceptance condition and extends the acceptance period until 25 November (settlement on 2 December).
SWMA shares are trading at an all-time high of SEK 115.8. Gross spread is 0.17% (estimated annual return is 2.52%). The market discounts that the offer will be successful.
Done deal. PMI is ready to wait until claiming final victory, quite possibly in the further extended acceptance period. It should be able to squeeze-out and delist. Accept offer.


United States

Altria Group, Inc. is a holding company.  The Company, through subsidiaries, manufactures and sells cigarettes and other tobacco products, including cigars and pipe tobacco.  Altria holds an interest in a brewery company.

Vector Group Ltd., through its subsidiaries, manufactures and sells cigarettes in the United States.  The Company is also involved in the real estate business through its subsidiary.

Universal Corporation is an independent leaf tobacco merchant.  The Company has additional operations in agri-products and the distribution of lumber and building products.  Universal sells primarily flue-cured and burley tobaccos to manufacturers located throughout the world.

Turning Point Brands, Inc. provides tobacco products. The Company offers a wide range of products, including moist snuff, loose leaf chewing tobacco, cigarette papers, make-your-own cigar wraps and cigar smoking tobacco, cigars, and liquid and tobacco vapor products.

Anheuser-Busch InBev NV brews beer.  The Company manufactures ale, lager, stout, and bitter beer.  Anheuser-Busch InBev owns brands that are both nationally and internationally prominent.  The Company has production plants in Europe, the Americas, and Asia.

The Coca-Cola Company manufactures, markets, and distributes soft drink concentrates and syrups.  The Company also distributes and markets juice and juice-drink products.  Coca-Cola distributes its products to retailers and wholesalers in the United States and internationally.

The Kraft Heinz Company provides food services. The Company offers foods including ketchup, sauces, meals, snacks, and other food products.

PepsiCo, Inc. operates worldwide beverage, snack and food businesses. The Company manufactures or uses contract manufacturers, markets and sells a variety of grain-based snacks, carbonated and non-carbonated beverages and foods in countries throughout the world.

Monster Beverage Corporation is a holding company based in Corona, California. The Company, through its consolidated subsidiaries, markets and distributes energy drinks worldwide.

Coca-Cola Enterprises Inc. markets, sells, manufactures, and distributes non-alcoholic beverages.  The Company provides refreshments, including sparkling waters, juices, isotonics, teas, and sodas.  Coca-Cola Enterprises operates internationally.

ITC Limited, a member of BAT Group of UK, is a holding company, which has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, Agri Business, Packaged Foods & Confectionery, Branded Apparel, Greeting Cards and other FMCG products.

Japan Tobacco, Inc. operates as an tobacco product company. The Company manufactures, markets and sells cigarettes and other tobacco products internationally. Japan Tobacco is also engaged in pharmaceutical and food businesses.

British American Tobacco P.L.C. operates as a holding company for a group of companies that manufactures, markets, and sells cigarettes and other tobacco products including cigars and roll-your-own tobacco.

Imperial Brands PLC operates as a consumer goods company. The Company manufactures, markets, and sells cigarettes, cigars, pipe and smokeless tobacco, snus, e-cigarettes, and other tobacco products, as well as logistics business. Imperial Brands serves customers worldwide.

Swedish Match AB manufactures and markets smokeless tobacco products. The Company offers products such as snus, moist snuff, and chewing tobacco. Swedish Match also manufactures and markets machine made cigars as well as matches and lighters.

PT Hanjaya Mandala Sampoerna Tbk manufactures hand rolled and machine-rolled clove-blended cigarettes. The Company distributes its products in the domestic and international market. Through its subsidiaries, the Company also develops properties.

KT&G Corporation processes, produces, and sells cigarettes and other tobacco products.  The Company, through its subsidiaries, manufactures ginseng products such as red ginseng tea and herbal medicines.  KT&G is also involved in real estate development of its former factory sites.

Smoore International Holdings Limited offering vaping technology solutions with advanced research and development technology. The Company manufactures and produces closed system vaping devices, self branded open system vaping devices, vaping components, and other products. Smoore International Holdings markets its products throughout Hong Kong.

Philip Morris International Inc., through its subsidiaries, affiliates and their licensees, produces, sells, distributes, and markets a wide range of branded cigarettes and tobacco products in markets outside of the United States of America.  The Company's portfolio comprises both international and local brands.

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Philip Morris International (PM US)

Philip Morris International Inc.: IQOS & ILUMA Are Changing The Game – Key Drivers

Philip Morris International's Q1 results exceeded analyst expectations on the earnings front but were below par in terms of revenues despite some...

Baptista Research

Investors Return to Tobacco Stocks After Multi-Year Decline

After a multi-year drop in ownership, Global Emerging Market fund exposure in the Tobacco Industry group is on the rise.

Steven Holden

Philip Morris International Inc.: Extended Long-Term Agreement With KT&G & Other Drivers

Philip Morris ended 2022 on a positive note and delivered another all-around beat. The company's volume increased significantly due to the ongoing...

Baptista Research

Philip Morris/Swedish Match: Squeeze-Out

The total stake of shares in Swedish Match held by PMHH, correspond to c. 93.11%. It intends to initiate squeeze-out and delisting from Nasdaq...

Jesus Rodriguez Aguilar

Offer Becomes Unconditional

PMI has obtained acceptances of 82.59%, waives the 90% acceptance condition and extends the acceptance period until 25 November (settlement on 2...

Jesus Rodriguez Aguilar

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Philip Morris International Inc.: IQOS & ILUMA Are Changing The Game – Key Drivers

Philip Morris International's Q1 results exceeded analyst expectations on the earnings front but were below par in terms of revenues despite some...

Baptista Research

Investors Return to Tobacco Stocks After Multi-Year Decline

After a multi-year drop in ownership, Global Emerging Market fund exposure in the Tobacco Industry group is on the rise.

Steven Holden

Philip Morris International Inc.: Extended Long-Term Agreement With KT&G & Other Drivers

Philip Morris ended 2022 on a positive note and delivered another all-around beat. The company's volume increased significantly due to the ongoing...

Baptista Research

Philip Morris/​​Swedish Match: Squeeze-Out

The total stake of shares in Swedish Match held by PMHH, correspond to c. 93.11%. It intends to initiate squeeze-out and delisting from Nasdaq...

Jesus Rodriguez Aguilar

Offer Becomes Unconditional

PMI has obtained acceptances of 82.59%, waives the 90% acceptance condition and extends the acceptance period until 25 November (settlement on 2...

Jesus Rodriguez Aguilar

Philip Morris/Swedish Match: Squeeze-Out