KUALA LUMPUR: British American Tobacco (M) Bhd’s (BAT) shares traded higher in early trade Monday after it reported earnings that were in line with expectations.

       The cigarette producer rose 34 sen, or 2.36% to RM14.76 at 9.06am. It has risen 8.66% so far this year.

       BAT’s net profit for the second quarter ended June 30, 2021, was higher at RM71.62mil, from RM54.61mil a year ago driven by domestic volume growth.

       Revenue was up at RM595mil compared with RM546mil previously.

       The group declared a second interim dividend of 24 sen a share.

       In the first six months to June 30, BAT posted a net profit of RM134.7mil on revenue of RM1.16bil.

       Kenanga Research said BAT’s 1HFY21 results were in line with the house’s and consensus expectations.

       “1HFY21 core net profit of RM135mil came in at 54%/49% of our/consensus estimates.

       “The 24.0 dividend per share (DPS) declared for the quarter is also in line, bringing DPS declared to date to 45.0 sen (versus our full-year expectation of 86.0 sen,” it said.

       “We raised our target price to RM15.70 based on revised FY22E PER of 17x. Undervalued at this juncture with an attractive dividend yield (c.6%), we upgrade the stock to outperform,” Kenanga said.