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Jakarta, CNBC Indonesia – Cigarette share prices managed to turn green in today’s trading after being severely corrected for the previous 2 days after the Government, through Finance Minister Sri Mulyani Indrawati, finally decided to increase the rates of excise taxes on cigarettes in 2021.
However, the negative sentiment from the Finance Minister is starting to fade, which can be seen in the movement of cigarette stocks today, in contrast to the previous three trading days.
According to trade data, of the 4 giant issuers producing cigarettes that took the floor on the stock exchange managed to turn green and only 1 was corrected.
The rise in cigarette stocks in today’s trading was led by the cigarette stocks with the largest market capitalization on the exchange, namely PT HM Sampoerna Tbk (HMSP), which took the top position after jumping 3 , 22%. Meanwhile, for cigarette stocks with another large market cap, namely PT Gudang Garam Tbk (GGRM), it also managed to jump 3.11%.
Meanwhile, the correction was only recorded by PT Indonesian Tobacco Tbk (WIIM), which still fell 6.10% to the price level of Rp 770 / unit.
Interestingly, from the table above, it can be seen that the severe corrections during the last 3 days were only recorded by HMSP and GGRM, which really dominate the national tobacco industry.
HMSP and GGRM posted corrected 10.58% and 10.40% respectively, while cigarette stocks such as PT Wismilak Inti Makmur Tbk (WIIM) haven’t even moved at all since the announcement of the cigarette excise tax increases. .
For the other two cigarette stocks, namely PT Bentoel International Inv. Tbk (RMBA) and ITIC are classified as wild due to small and illiquid trade volume.
There are two factors that cause a severe correction in the HMSP and GGRM duo but not in WIIM.
First, there are expectations of a further shift from consumers of HMSP and GGRM cigarettes whose prices are actually higher than WIIM’s.
This phenomenon itself has been demonstrated by the performance of the three companies in 2020 where when the country was attacked by the corona virus and there was a problem in people’s purchasing power, smokers switched from premium cigarettes to more cigarettes. affordable.
This was demonstrated by the lower net income of HMSP and GGRM compared to the previous year (YoY), while the YoY income of WIIM managed to accelerate.
HMSP posted a corrected net profit of 33.3% year-on-year, while GGRM’s net profit also corrected rather badly at 30.8%. Unlike the two companies, WIIM’s net profit has managed to accelerate by 530% in this pandemic year.
Second, the effect of WIIM’s resistance to increases in the cigarette excise tax is due to the fact that the increase in the excise tax only occurs on machine-type tobacco, while hand-held cigarette types that are labor intensive do not have the same increase in excise duties.
From the above data it can be seen that most of the income of the HMSP and GGRM duo is obtained in machine type cigarettes, so the increase in excise taxes on this type of cigarettes will greatly affect the company’s income.
HMSP recorded machine cigarettes for up to 75% of the company’s total revenue, while only 25% came from hand-rolled cigarettes.
The worst happened at GGRM where the majority of the company’s revenue was from machine cigarettes, which amounted to 92% and only 8% was from handheld cigarettes.
WIIM managed to become the issuer least affected by the increase in excise tax because, although the majority of revenue, which amounted to 69%, was still derived from machine cigarettes, WIIM’s reliance on machine cigarettes was the smallest because WIIM’s revenue from handheld cigarettes was the largest of the three. company to 31%.
For RMBA and ITIC, in its financial statements the company does not categorize the sales obtained from handheld or machine cigarettes.
Previously announced, Finance Minister Sri Mulyani Indrawati finally decided to increase the excise tax rates on cigarettes in 2021. The increase in excise taxes on cigarettes in 2021 is an average of 12.5%.
With this, the price of cigarettes may be more expensive in 2021 by up to 14%.
“Increased CHT [Cukai Hasil Tembakau] This will make cigarettes more expensive or rise to 13.7-14%, making them increasingly impossible to buy, ”Sri Mulyani said at a virtual press conference on Thursday (10/12/2020).
Here are the details of the increase in excise tax rates in 2021:
Kretek Cigarette Machine (SKM)
SKM 1: Increase of Rp 125 / Stem or 16.9% [Tarif Cukai 2021 Rp 865/Batang)
SKM IIA : Rp 65/Batang atau 13,8% [Tarif Cukai 2021 Rp 535/Batang]SKM IIIB: IDR 70 / rod or 15.4% [Tarif Cukai 2021 Rp 525/Batang]
Regarding SPM or machine white cigarettes
SPM I: Rp 145 / Batang or 18.4% [Tarif Cukai 2021 Rp 935/Batang]SPM II A: IDR 80 / rod or 16.5% [Tarif Cukai 2021 Rp 565/Batang]SPM IIIB: IDR 470 / rod or 18.1% [Tarif Cukai 2021 Rp 555/Batang]
“So for an average of 12.5%, the increase is. For hand-rolled kretek cigarettes, it will not increase in 2021,” Sri Mulyani said.
 Photo: Infographic / Increase in excise taxes on cigarettes / Edward RicardoINFOGRAPHIC, 5 reasons Sri Mulyani makes cigarettes expensive |
CNBC INDONESIA INVESTIGATION TEAM
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