New Toyo

[Stockerman]

Big tobacco companies' profit margin can be maintained even if volume drops. This is because they can just jack up the price of cigarette.

Can tobacco printing/packaging companies like Tien Wah/New Toyo jack up their prices (of packagaing and printing) to clients like BAT and PMI? Very likely.
Their growth is largely driven by volume growth in cigarette printing volume. If volume of cigarette tapers off, they will suffer because essentially they have no pricing power ...

********************
http://www.trefis.com/stock/pm/articles/...m=artPopin

» ‘Sin Tax’ law implemented in Philippines this year is expected to significantly drag Philip Morris’ volume growth from Asia
» Australian Plain Packaging law is expected to have marginal impact on the company’s earnings
» Russian Anti-Tobacco law expected to put further pressure on volumes during the later half of the year
» Higher revenue per cigarette driven by lower volume growth and sharp price increases is expected to drive better operating margins