Venture Corporation - CGS-CIMB Research 2020-02-07: IQOS MESH To Debut Earlier

VENTURE CORPORATION LIMITED (SGX:V03) | SGinvestors.io VENTURE CORPORATION LIMITED (SGX:V03)

Venture Corporation - IQOS MESH To Debut Earlier

  • Philip Morris International (PM US) yesterday reported 4Q19 earnings that met street expectations.
  • Key positives for Venture (manufacturing partner for IQOS devices):
    1. Philip Morris will seek approval to sell IQOS 3 in USA, and
    2. launch of IQOS MESH in 3Q20.
  • Reiterate HOLD for Venture Corporation (SGX:V03).



Key highlights from Philip Morris's 4Q19 results

  • Philip Morris in its results announcement yesterday reiterated its guidance for HTU (Heated Tobacco Unit) shipment volume of 90bn-100bn by 2021F (2019: 60bn units). Its RRP (Reduced Risk Product) revenue hit 18.7% of FY19 group revenue (FY15: 0.2%). IQOS (I Quit Ordinary Smoking) device revenue in FY19 was US$0.7bn.
  • IQOS is now available in 52 markets worldwide. Philip Morris made the product available in the markets of Hungary, Sweden, the UAE, the US and Mexico in 2019. IQOS 3 Duo (latest product) is available in all markets except USA. Philip Morris estimates that there are nearly 14m IQOS users globally.
  • Philip Morris maintained good sales performance in its key Japan market with a 17.6% share of the market for HTU.
  • IQOS retail stores were opened in Atlanta and Richmond. Currently, the IQOS 2.4 device is the only heat-not-burn product approved by the US Food & Drug Administration (FDA). Philip Morris plans to seek approval to market its newer version IOQS 3 device from the US FDA in the coming months. Philip Morris puts the estimated smoking population in the US at approximately 40m.
  • Philip Morris will also accelerate the launch of its IQOS MESH 2.0 device to 3Q20, a market it estimates has approximately 25m adult users.
  • Coronavirus outbreak: currently no impact on Philip Morris's IQOS sales but device availability may be a concern if the issue drags on as some components are sourced from China.
  • Philip Morris also projected that it would gain significantly more IQOS users in 2020.


Reiterate HOLD






William TNG CFA CGS-CIMB Research | https://www.cgs-cimb.com 2020-02-07
SGX Stock Analyst Report HOLD MAINTAIN HOLD 16.880 SAME 16.880



Advertisement



MOST TALKED ABOUT STOCKS / REITS OF THE WEEK



loading.......



ANALYSTS SAY


loading.......