Financial Performance - China Tobacco International (HK) reported a revenue of HKD 1.2 billion for the first half of 2023, representing a 15% increase compared to the same period last year[6]. - The company achieved a net profit of HKD 300 million, which is a 20% increase year-over-year[6]. - Revenue for the six months ended June 30, 2023, reached HKD 7,743.999 million, a 100% increase from HKD 3,869.412 million in the same period last year[14]. - Gross profit for the same period was HKD 745.345 million, reflecting a 70% increase compared to HKD 439.618 million in the previous year[14]. - The company reported a pre-tax profit of HKD 625.673 million, up 69% from HKD 369.208 million year-on-year[14]. - The net profit for the period was HKD 510,540 thousand, representing an 83.6% increase compared to HKD 277,746 thousand in the previous year[109]. - Basic and diluted earnings per share rose to HKD 0.66, compared to HKD 0.32 for the same period in 2022[109]. - The company's total assets as of June 30, 2023, were HKD 6,254.0 million, a slight decrease from HKD 6,370.5 million at the end of 2022[28]. - The company's capital debt ratio improved to 0.89 as of June 30, 2023, from 0.94 at the end of 2022[28]. Revenue Growth and Market Expansion - User data indicates a growth in customer base by 10%, reaching 1.5 million active users[6]. - The company plans to expand its market presence in Southeast Asia, targeting a 25% market share by 2025[6]. - Future guidance estimates a revenue growth of 10-15% for the full year 2023[6]. - The mainland China market contributed HKD 6,607,111 to total revenue, a substantial increase from HKD 2,616,959, marking an increase of around 152%[125]. - Revenue from tobacco leaf products sales reached HKD 7,469,818, up from HKD 3,824,917, indicating an increase of about 95% year-over-year[124]. - Revenue from new tobacco products amounted to HKD 33,895, compared to HKD 26,729 in the previous year, reflecting a growth of approximately 27%[124]. Product Development and Innovation - New product development includes the launch of a reduced-risk product line, expected to contribute an additional HKD 200 million in revenue by the end of 2024[6]. - The company has allocated HKD 100 million for research and development in innovative tobacco products over the next two years[6]. - A new marketing strategy is being implemented, aiming to increase brand awareness by 30% within the next year[6]. Operational Efficiency and Supply Chain - The company aims to enhance operational efficiency and strengthen supply chain resilience amid market fluctuations[15]. - Strategic acquisitions are being considered to enhance supply chain efficiency, with a focus on companies in the tobacco processing sector[6]. - The management is actively seeking potential acquisition targets to bolster growth and improve overall operational management[15]. Related Party Transactions - Total revenue from related party transactions at the issuer level amounted to HKD 6,448.2 million, representing approximately 83.3% of total revenue during the reporting period[32]. - Total procurement from related party transactions at the issuer level was HKD 1,015.8 million, which is approximately 14.6% of total procurement[32]. - The pricing policy for imported tobacco leaf products includes a markup of 6% over the price paid to suppliers, with a 3% markup for specific brands[35]. - The company has established exclusive operating and long-term supply framework agreements for both imported and exported tobacco leaf products, which are indefinite unless terminated by the company[34][37]. Financing and Investments - Financing costs surged by 140% to HKD 72.4 million, compared to HKD 30.1 million in the same period of 2022, mainly due to increased bank loan interest rates[25]. - The net proceeds from the initial public offering amounted to approximately HKD 904 million, with a net price of approximately HKD 4.72 per share[93]. - 45% of the net proceeds, equating to HKD 406.8 million, is allocated for investments and acquisitions that complement the group's business[34]. - The company has not purchased, sold, or redeemed any of its listed securities during the six months ending June 30, 2023[102]. Employee and Corporate Governance - The employee costs incurred by the group for the six months ended June 30, 2023, amounted to HKD 28.3 million, compared to HKD 22.8 million in 2022[92]. - The group had 36 employees in Hong Kong and 232 employees in Brazil as of June 30, 2023, compared to 31 and 214 employees, respectively, as of December 31, 2022[92]. - The company has complied with all applicable code provisions of the Corporate Governance Code during the reporting period[103]. - The independent non-executive directors confirmed that the continuing connected transactions were established in the ordinary and usual course of business and were fair and reasonable[88].

Financial Performance - Revenue for the six months ended June 30, 2023, was HKD 7,743,999, representing a 100% increase compared to HKD 3,869,412 for the same period in 2022[2]. - Gross profit increased by 70% to HKD 745,345 from HKD 439,618 year-on-year[2]. - Profit for the period attributable to equity holders of the company rose by 109% to HKD 456,952, compared to HKD 218,978 in the previous year[2]. - The company reported a pre-tax profit of HKD 625,673, which is a 69% increase from HKD 369,208 in the same period last year[2]. - Basic and diluted earnings per share increased to HKD 0.66 from HKD 0.32, reflecting a significant growth in profitability[2]. - The group reported customer contract revenue of HKD 7,743,999 thousand for the six months ended June 30, 2023, a significant increase from HKD 3,869,412 thousand in the same period of 2022, representing an increase of approximately 100%[15]. - Revenue from leaf products sales reached HKD 7,469,818 thousand, up from HKD 3,824,917 thousand year-on-year, indicating an increase of about 95%[15]. - The group generated revenue of HKD 6,607,111 thousand from mainland China, a substantial rise from HKD 2,616,959 thousand in the previous year, reflecting an increase of approximately 152%[16]. - The gross profit for the reporting segments totaled HKD 745,345 thousand, with a pre-tax profit of HKD 625,673 thousand for the six months ended June 30, 2023[19]. - The net profit for the six months ended June 30, 2023, was HKD 277,746,000, reflecting a rise from HKD 218,978,000 in the same period of the previous year, which is an increase of about 26.8%[21][27]. Financial Position - Total assets as of June 30, 2023, amounted to HKD 5,761,811, a slight decrease from HKD 5,900,080 at the end of 2022[6]. - Net assets increased to HKD 2,616,489 from HKD 2,237,590 at the end of 2022, indicating a strong financial position[9]. - The group’s total assets for the reporting segments amounted to HKD 6,254,002 thousand, while total liabilities were HKD 3,637,513 thousand as of June 30, 2023[19]. - The company reported a total asset value of HKD 6,370,521,000 as of June 30, 2023, compared to HKD 5,541,491,000 as of December 31, 2022, showing growth in asset base[21]. - The total liabilities as of June 30, 2023, were HKD 4,132,931,000, compared to HKD 4,132,931,000 as of December 31, 2022, indicating stability in the company's financial structure[22]. - The capital debt ratio improved to 0.89 as of June 30, 2023, from 0.94 at the end of 2022[50]. Expenses and Costs - The company’s financing costs surged by 140% to HKD 72,365 from HKD 30,125, highlighting increased borrowing costs[2]. - Administrative and other operating expenses rose by 29% to HKD 76,978 compared to HKD 59,898 in the previous year[2]. - The company incurred financing costs of HKD 72,365,000 for the six months ended June 30, 2023, compared to HKD 30,125,000 for the same period in 2022, reflecting an increase in financing expenses[23]. - Financing costs surged by 140% to HKD 72.4 million, primarily due to increased bank loan interest rates[46]. Other Income - Other income net increased by 51% to HKD 29,671 from HKD 19,613, contributing positively to overall financial performance[2]. - The net other income for the six months ended June 30, 2023, was HKD 29,671,000, compared to HKD 19,613,000 for the same period in 2022, indicating an increase in other income sources[22]. Market and Product Performance - The new tobacco products segment generated revenue of HKD 33,895 thousand, compared to HKD 26,729 thousand in the previous year, marking an increase of approximately 27%[15]. - The group’s revenue from the export of cigarettes was HKD 240,131 thousand, a significant increase from HKD 17,568 thousand in the same period last year, representing an increase of approximately 1265%[15]. - The group’s operations in Brazil generated revenue of HKD 275,459 thousand, reflecting the ongoing expansion in that market[19]. - The export volume of cigarettes surged to 562,943 thousand sticks, an increase of 497,969 thousand sticks or 766% year-on-year[38]. - Revenue from cigarette exports reached HKD 240.1 million, an increase of HKD 222.6 million or 1,267% year-on-year[38]. Strategic Initiatives - The company plans to continue its dual-driven development strategy focusing on both external and internal growth, including potential acquisitions[41]. - The company aims to optimize its supply chain and expand into new markets to enhance business development opportunities[42]. IPO and Fund Utilization - The net proceeds from the IPO amounted to approximately HKD 904 million, with a net price of about HKD 4.72 per share[55]. - 45% of the net proceeds, approximately HKD 406.8 million, is allocated for investments and acquisitions to enhance the group's business[56]. - 20% of the net proceeds, approximately HKD 180.8 million, is designated to support the ongoing development of the group[56]. - Another 20% of the net proceeds, also approximately HKD 180.8 million, is intended for strategic collaborations with other international tobacco companies[56]. - 10% of the net proceeds, amounting to HKD 90.4 million, is allocated for general working capital[56]. - 5% of the net proceeds, approximately HKD 45.2 million, is aimed at improving procurement and sales resource management[56]. - As of June 30, 2023, a total of HKD 459.4 million has been utilized from the net proceeds[56]. - The remaining funds are expected to be used by June 30, 2025, according to the group's best estimates[56]. Corporate Governance - The company has complied with all applicable code provisions of the Corporate Governance Code during the six months ended June 30, 2023[60]. - The company is ultimately controlled by China National Tobacco Corporation[63]. - The company was listed on the Hong Kong Stock Exchange on June 12, 2019[63]. - The company operates subsidiaries including China Tobacco International Brazil Ltd., established on June 6, 2002[63]. - The board of directors includes both executive and independent non-executive members[65]. - The company adheres to the Corporate Governance Code as per the Hong Kong Listing Rules[63]. - The company has established various committees including the Nomination Committee and the Remuneration Committee[64]. - The company’s shares are classified as ordinary shares[64]. - The company operates in multiple regions including Hong Kong and Macau[63]. - The company uses multiple currencies including Hong Kong dollars, US dollars, and Brazilian reais[64]. - The company is subject to the Listing Rules of the Hong Kong Stock Exchange[63].

Financial Performance - The revenue for the year 2022 was HKD 8,324,205,089, an increase of 3.2% compared to HKD 8,064,115,900 in 2021[33] - Gross profit for 2022 reached HKD 843,935,426, significantly up from HKD 445,228,752 in 2021, indicating a strong improvement in profitability[33] - The net profit after tax for 2022 was HKD 464,158,522, representing a 49% increase from the adjusted 2021 net profit of HKD 311,370,660[33] - The pre-tax profit for 2022 was HKD 615,628,975, down from HKD 773,736,022 in 2021[33] - The company achieved a profit of HKD 464 million for the year ended December 31, 2022, representing a year-on-year growth of 49%[35] - Profit attributable to equity holders reached HKD 375 million, a year-on-year increase of 26%[36] - Total revenue for the year ended December 31, 2022, grew by 3% to HKD 8,324.2 million, while costs decreased by 2% to HKD 7,480.3 million[47] - Gross profit for the year increased by 90% to HKD 843.9 million, driven by vertical integration and growth in the import of cigar leaf products[47] - The profit attributable to equity holders for the year increased by 26% to HKD 374.9 million, up from HKD 296.8 million in 2021, while the group's profit rose by 49% to HKD 464.2 million from HKD 311.4 million in 2021[52] Expenses and Costs - Administrative and other operating expenses rose to HKD 187,254,172 in 2022, compared to HKD 138,847,877 in 2021[33] - Financing costs increased to HKD 85,042,976 in 2022, up from HKD 25,593,469 in the previous year[33] - Administrative and other operating expenses rose by 35% to HKD 187.3 million, primarily due to increased transportation costs and the inclusion of CBT's performance post-acquisition[47] - For the year ended December 31, 2022, the group's financing costs increased by 232% to HKD 85.0 million compared to HKD 25.6 million in 2021, primarily due to increased bank loan interest and other financing costs[48] Market Strategy and Outlook - The company is focused on expanding its market presence and enhancing its product offerings through strategic acquisitions and partnerships[5] - Future outlook includes continued investment in new product development and technology to drive growth in international markets[5] - The company plans to enhance its capital operation platform and pursue strategic acquisitions aligned with its development goals[38] - The company aims to strengthen its market share in the new tobacco products sector and increase the contribution of its proprietary brands[38] - The company is actively expanding its new tobacco product export business and optimizing its supply chain to mitigate geopolitical risks[38] - In 2023, the company plans to enhance the development of new tobacco products and restore rolled cigarette exports, while optimizing the supply chain and exploring strategic partnerships for mergers and acquisitions[46] - The company aims to strengthen its market presence in emerging markets and enhance brand competitiveness in the international market for new tobacco products[46] Supply Chain and Procurement - The company is exploring long-term supply agreements with tobacco leaf customers and suppliers to improve supply chain stability[38] - The company is responding to the upgrading trend in the domestic cigar market by enhancing its procurement capabilities and negotiating better pricing for cigar leaf materials[38] - The company has established exclusive and long-term supply framework agreements for both imported and exported tobacco leaf products, which are indefinite unless terminated by the company[64][67] - The procurement transaction amount for tobacco leaf export business during the reporting period was HKD 2,066.7 million, accounting for 100% of the total procurement volume for tobacco leaf export business[73] - The procurement transaction amount for cigarette export business during the reporting period was HKD 131.6 million, approximately 100% of the total procurement volume for cigarette export business[80] - The procurement transaction amount for new tobacco products export business was HKD 107.0 million, accounting for 100% of the total procurement volume in this segment[85] Related Party Transactions - The total revenue from related party transactions at the issuer level amounted to HKD 5,425.2 million, representing approximately 65.2% of the total revenue for the reporting period[62] - The total revenue from related party transactions at the subsidiary level was HKD 1,093.0 million, accounting for about 13.1% of the total revenue for the reporting period[62] - The total procurement from related party transactions at the issuer level was HKD 2,445.1 million, which is approximately 28.3% of the total procurement for the reporting period[62] - The total procurement from related party transactions at the subsidiary level reached HKD 1,666.8 million, representing about 19.3% of the total procurement for the reporting period[62] Corporate Governance and Compliance - The company has maintained compliance with the Corporate Governance Code throughout the fiscal year ending December 31, 2022[191] - The board consists of nine members, including independent non-executive directors, ensuring compliance with listing regulations[195] - The independent non-executive directors confirmed that the continuing connected transactions were conducted in the ordinary and usual course of business and on terms that are fair and reasonable[121] - The independent financial advisor confirmed that the permanent continuing connected transactions were conducted according to the relevant pricing regulatory notices and the company's internal pricing policies[124] - The independent financial advisor also verified that fixed-term continuing connected transactions and those with Alliance One Group were established under fair and reasonable terms[124] Sustainability and Social Responsibility - The company is committed to sustainable development and has integrated ESG management into its operations, focusing on reducing energy consumption and enhancing supplier management[39] - The management team emphasized the importance of sustainability initiatives, aiming for a 40% reduction in carbon footprint by 2025[129] - The company has established an environmental, social, and governance (ESG) team to oversee compliance with relevant laws and regulations[153] Employee Relations - The group emphasizes the importance of employee relations and aims to provide competitive compensation and professional training to attract and retain talent[151] - The group has adopted a performance-based bonus system as part of its employee compensation management policy[151] Shareholder Information - The company proposed a final dividend of HKD 0.20 per share for the year ended December 31, 2022, compared to HKD 0.17 per share for the previous year[156] - As of December 31, 2022, the company's distributable reserves amounted to HKD 653.6 million, an increase from HKD 413.3 million as of December 31, 2021[157] - The ultimate controlling shareholder, China Tobacco, has committed not to engage in any business that competes with the company, ensuring compliance as of December 31, 2022[170] Future Investments and Financial Planning - The company is considering strategic acquisitions to bolster its product offerings, with a budget of $100 million allocated for potential deals[129] - The company has not identified any significant legal or regulatory violations that could materially impact its operations in Hong Kong or Brazil as of December 31, 2022[155] - There are no plans for significant investments or capital assets as of December 31, 2022[182]

Financial Performance - China Tobacco International (HK) Company Limited reported a significant increase in revenue, reaching HKD 1.2 billion, representing a 15% year-over-year growth[10]. - For the six months ended June 30, 2022, the company's revenue was HKD 3,869,411,941, a slight increase of 1.5% compared to HKD 3,813,759,146 for the same period in 2021[20]. - Gross profit for the same period was HKD 452,449,775, significantly up from HKD 188,194,326, reflecting a gross margin improvement[20]. - The company reported a net profit of HKD 277,746,275 for the first half of 2022, down 54.5% from HKD 609,364,157 in the previous year[20]. - Basic and diluted earnings per share for the six months ended June 30, 2022, were HKD 0.32, compared to HKD 0.89 for the same period in 2021, a decline of approximately 64.0%[116]. - Operating profit for the six months ended June 30, 2022, was HKD 399,332,747, significantly higher than HKD 111,115,154 in the previous year, indicating a substantial increase in operational efficiency[116]. - The pre-tax profit for the same period was HKD 369,208,146, resulting in a net profit of HKD 277,746,275 after tax expenses of HKD 91,461,871[138]. Market Expansion and Strategy - The company has expanded its user base, with a 20% increase in active customers, totaling 500,000 users[12]. - For the upcoming fiscal year, the company projects a revenue growth of 10% to HKD 1.32 billion, driven by new product launches and market expansion strategies[14]. - China Tobacco International plans to enter new markets in Southeast Asia, targeting a 5% market penetration within the next two years[10]. - The company is investing HKD 200 million in research and development for new tobacco products, aiming to capture a larger market share[8]. - The company has established a strategic partnership with local distributors to enhance its distribution network, aiming for a 10% increase in market reach[14]. Supply Chain and Acquisitions - The company has completed the acquisition of a 51% stake in Alliance One Brazil, enhancing its supply chain capabilities[12]. - The company is focusing on strategic acquisitions and enhancing supply chain collaboration to improve profitability and operational efficiency[21]. - The group plans to continue identifying and analyzing potential acquisition targets to enhance operational efficiency and effectiveness[27]. - The group aims to strengthen collaboration with China Tobacco Brazil and its subsidiaries to improve overall operational efficiency[27]. Financial Position and Assets - The total asset value of the group as of June 30, 2022, was HKD 6,208.2 million, an increase from HKD 4,766.6 million as of December 31, 2021[91]. - The group's cash and cash equivalents as of June 30, 2022, were HKD 2,024.1 million, up from HKD 1,659.0 million as of December 31, 2021[91]. - The total liabilities of the group as of June 30, 2022, were HKD 4,106.3 million, compared to HKD 2,783.2 million as of December 31, 2021[91]. - The capital-to-debt ratio as of June 30, 2022, was 1.00, an increase from 0.66 as of December 31, 2021[91]. Revenue Sources and Transactions - Total revenue from related party transactions during the reporting period amounted to HKD 2,606.5 million and HKD 583.7 million, representing approximately 67% and 15% of total revenue, respectively[41]. - The company has established exclusive operating and long-term supply framework agreements with China National Tobacco Corporation for both import and export tobacco leaf businesses, which are indefinite unless terminated by the company[46]. - The company has entered into long-term supply agreements with various entities under China National Tobacco Corporation for the export of tobacco leaf products[46]. Sustainability and Corporate Governance - China Tobacco International is focusing on sustainability initiatives, with a goal to reduce carbon emissions by 15% over the next three years[12]. - The company has complied with all applicable code provisions of the Corporate Governance Code during the six months ending June 30, 2022[109]. - The independent non-executive directors confirmed that the related party transactions were conducted on normal commercial terms and were fair and reasonable[87]. Employee and Operational Changes - As of June 30, 2022, the company had 30 employees in Hong Kong and 199 employees in Brazil, an increase from 181 employees in Brazil as of December 31, 2021[96]. - The group did not engage in any significant acquisitions or disposals during the six months ended June 30, 2022[92].

Financial Performance - The company reported a revenue of HKD 8,064,115,900 for the year ended December 31, 2021, a significant increase from HKD 3,484,672,085 in 2020, representing a growth of approximately 131%[113] - Gross profit for the year was HKD 445,228,752, compared to HKD 141,593,676 in the previous year, indicating a gross margin improvement[113] - The company achieved a net profit after tax of HKD 717,361,844, up from HKD 106,120,529 in 2020, reflecting a substantial increase of approximately 576%[113] - For the year ended December 31, 2021, the group's revenue increased by 131% to HKD 8,064.1 million compared to HKD 3,484.7 million in 2020[127] - Gross profit for the same period rose by 214% to HKD 445.2 million, driven primarily by a significant increase in imported tobacco products[128] - Net profit, excluding the gain from the deemed disposal of joint ventures, increased by 193% to HKD 311.4 million, up from HKD 106.1 million in 2020[135] Acquisition and Expansion - The successful acquisition of China Tobacco Brazil was completed, marking the company's first cross-border acquisition post-listing, enhancing its operational capabilities[115] - The acquisition of China Tobacco International Brazil was completed, with revenue from tobacco leaf exports to regions outside China reaching HKD 314.7 million, a year-on-year increase of 8,182%[125] - The acquisition of the entire issued and outstanding quotas of China Tobacco Brazil was completed on November 26, 2021, for a total consideration of USD 63.4 million[138] - The acquisition of China Tobacco Brazil Group is expected to enhance the company's business diversification, reduce reliance on CNTC Group, and improve overall profitability and bargaining power[139] - The group aims to enhance its capital operation platform and actively seek potential acquisition targets to achieve leapfrog development[117] - The group plans to actively seek acquisition opportunities aligned with its strategic goals, focusing on potential mergers and restructuring[126] Tobacco Export and Import Business - The tobacco leaf export business reached a historical high, while the import business showed signs of recovery, demonstrating effective supply chain management[115] - In 2021, the group exported 101,663 tons of tobacco leaf products, a year-on-year increase of 19,650 tons, representing a growth of 24%[120] - The group's revenue from tobacco leaf exports reached HKD 2,296.8 million, up by HKD 363.0 million, a growth of 19%[120] - The import volume of tobacco leaf products surged to 97,248 tons, a significant increase of 74,782 tons, marking a growth of 333%[121] - Revenue from tobacco leaf imports reached HKD 5,177.9 million, an increase of HKD 3,827.1 million, representing a growth of 283%[121] - The group exported 463,460 thousand sticks of cigarettes, an increase of 33,606 thousand sticks, reflecting a growth of 7%[123] - Revenue from cigarette exports was HKD 173.2 million, up by HKD 15.1 million, a growth of 10%[123] - The export volume of new tobacco products reached 454,770 thousand sticks, a substantial increase of 289,780 thousand sticks, representing a growth of 176%[124] - Revenue from new tobacco product exports was HKD 101.6 million, an increase of HKD 63.3 million, reflecting a growth of 165%[124] Financial Position and Debt - The group’s net current assets as of December 31, 2021, stood at HKD 1,585.3 million, compared to HKD 1,553.8 million at the end of 2020[137] - As of December 31, 2021, the total assets of the group amounted to HKD 4,766.6 million, an increase from HKD 3,804.8 million in 2020[143] - The group reported a total debt of HKD 2,783.2 million as of December 31, 2021, compared to HKD 2,058.8 million in 2020, resulting in a capital debt ratio of 0.66[143] - The group had a cash and cash equivalents balance of HKD 1,659.0 million as of December 31, 2021, slightly up from HKD 1,634.3 million in 2020[143] - The group’s financing costs surged by 1,607% to HKD 25.6 million, primarily due to interest expenses from bank loans and lease liabilities[132] Employee and ESG Initiatives - Employee career development and health have been prioritized, with the implementation of a multi-channel career development system and professional training programs[115] - The company is actively engaging in ESG initiatives, including supplier traceability management and promoting green development practices[115] Related Party Transactions - The group’s related party transactions during the reporting period generated total revenue of HKD 5,178.9 million, accounting for approximately 64.2% of total revenue[149] - The procurement from related parties amounted to HKD 2,963.7 million, representing about 38.9% of total procurement during the reporting period[149] Pricing Policies and Framework Agreements - The company has established a long-term supply framework agreement for the export of tobacco leaf products, with a procurement transaction amount of HKD 2,234.1 million, representing 100.0% of the total procurement volume for the export business[158] - The pricing policy for imported tobacco leaf products is based on a formula where the price (P) is determined as P = A × 1.06, with A being the price from suppliers[151] - The company has established exclusive long-term supply framework agreements for the export of cigarettes with various entities under China National Tobacco Corporation[159] - The pricing formula for procurement of tobacco leaf products is P = A × (1 - applicable markup ratio), where A is the selling price to independent third parties[156] - The pricing policy for high-end and other categories of duty-free cigarettes stipulates that the export price for high-end cigarettes must not be lower than 35% of the domestic non-tax transfer price, while for other duty-free cigarettes, it must not be lower than 45%[165] - The company has established exclusive and long-term supply framework agreements for new tobacco products export business with relevant entities under China National Tobacco Corporation, with no specified termination date unless terminated by the company[170] Agency Agreements and Future Projections - The company has established a new tobacco leaf export agency agreement for the period from November 17, 2021, to November 16, 2024, to continue promoting its tobacco leaf sales agency business[184] - The projected transaction amounts for the leaf product sales agency business are capped at HKD 4.7 million, HKD 0.4 million, HKD 3.0 million, HKD 3.3 million, and HKD 3.6 million for the respective periods from 2021 to 2024[187] - The estimated transaction amounts under the offshore supply framework agreements are projected to not exceed HKD 2,800 million for the year ending December 31, 2021, and HKD 490.2 million for the period from January 1, 2024, to November 16, 2024[180]

Financial Performance - For the six months ended June 30, 2021, the company's revenue increased by 96.03% to HKD 3,694.3 million compared to HKD 1,884.6 million in the same period of 2020[15]. - The company's gross profit surged by 134.86% to HKD 174.5 million, compared to HKD 74.3 million in the previous year[19]. - The company's profit before tax for the first half of 2021 was HKD 154.3 million, significantly higher than HKD 64.9 million in the same period of 2020[15]. - The net profit after tax for the same period was HKD 129.7 million, compared to HKD 57.2 million in 2020, reflecting a strong recovery[15]. - For the six months ended June 30, 2021, the company's net profit increased by 126.75% to HKD 129.7 million, compared to HKD 57.2 million in the same period of 2020[23]. - Revenue for the six months ended June 30, 2021, was HKD 3,694,278,067, representing an increase of 96.0% compared to HKD 1,884,554,445 for the same period in 2020[125]. - Gross profit for the same period was HKD 174,478,938, up 134.0% from HKD 74,259,277 in 2020[125]. - Profit for the period was HKD 129,678,436, compared to HKD 57,208,694 in 2020, marking an increase of 126.5%[125]. Cost and Expenses - The cost of sales for the same period rose by 94.43% to HKD 3,519.8 million, up from HKD 1,810.3 million in 2020[18]. - The company's administrative and other operating expenses decreased by 4.51% to HKD 25.4 million, down from HKD 26.6 million in 2020, due to effective cost control measures[21]. - The financing costs decreased by 25.00% to HKD 0.6 million, down from HKD 0.8 million in 2020[22]. - The company reported a decrease in financing costs to HKD 627,854 for the six months ended June 30, 2021, down from HKD 782,933 for the same period in 2020, a reduction of about 20%[157]. Revenue Sources - The export volume of leaf products increased by 14.92% to 43,715 tons, with revenue rising by 3.57% to HKD 1,074.2 million[24]. - The import volume of leaf products surged by 356.28% to 56,022 tons, with revenue increasing by 223.32% to HKD 2,568.8 million[25]. - The export volume of new tobacco products rose by 544.03% to 102,400 thousand sticks, with revenue increasing by 554.50% to HKD 23.7 million[28]. - The company's revenue from tobacco leaf export sales reached HKD 1,073,726,606 for the six months ended June 30, 2021, compared to HKD 1,036,148,312 in the same period of 2020, representing an increase of approximately 3.3%[145]. - Revenue from tobacco leaf import sales significantly increased to HKD 2,568,781,581 in the first half of 2021, up from HKD 794,487,140 in the prior year, marking a growth of approximately 224.5%[145]. - The sales revenue from new tobacco products rose to HKD 23,747,880 in the first half of 2021, compared to HKD 3,628,404 in the same period of 2020, indicating a substantial increase of approximately 553.5%[145]. Strategic Focus - The company is focusing on enhancing its new tobacco product development and market expansion efforts to mitigate risks associated with traditional business[17]. - The company aims to optimize its business structure and improve supply chain coordination to maintain market advantages amid the ongoing pandemic[17]. - The management is committed to building a resilient enterprise by implementing a self-growing management system and risk control framework[17]. - The company is actively responding to government initiatives by providing pandemic protection for employees and enhancing its environmental, social, and governance (ESG) practices[17]. - The company plans to focus on supply chain stability and market demand fulfillment in the second half of 2021, amid uncertainties from the COVID-19 pandemic[29]. Assets and Liabilities - The company's total assets as of June 30, 2021, were HKD 2,483.1 million, a decrease from HKD 3,644.7 million as of December 31, 2020[89]. - The total liabilities of the company as of June 30, 2021, were HKD 793.1 million, down from HKD 2,056.8 million as of December 31, 2020[89]. - The company's cash and cash equivalents as of June 30, 2021, were HKD 1,818.6 million, compared to HKD 1,613.2 million as of December 31, 2020[89]. - The current ratio of the company as of June 30, 2021, was 3.2, an increase from 1.8 as of December 31, 2020[89]. - Trade receivables increased to HKD 433,031,181 as of June 30, 2021, from HKD 281,150,912 as of December 31, 2020, representing a growth of approximately 54%[167]. - Trade payables decreased from HKD 1,909,490,319 as of December 31, 2020, to HKD 723,605,990 as of June 30, 2021, representing a reduction of approximately 62%[13]. Corporate Governance - The company complied with all applicable code provisions of the Corporate Governance Code during the six months ended June 30, 2021[117]. - The independent non-executive directors confirmed that the ongoing related party transactions were conducted on normal commercial terms and were fair and reasonable[83]. - The audit committee reviewed the unaudited interim results for the six months ended June 30, 2021[116]. Shareholder Information - 72.29% of the company's shares were held by China Tobacco International Group as of June 30, 2021[109]. - The total issued and fully paid ordinary shares remained constant at 691,680,000 shares, with a total value of HKD 1,403,721,280 as of June 30, 2021[14]. - The company did not issue any equity securities during the six months ended June 30, 2021[104].

Financial Performance - Total revenue for 2020 was HKD 3,480,909,568, a decrease of 61.2% compared to HKD 8,976,951,511 in 2019[13] - Gross profit for 2020 was HKD 137,831,159, down 67.1% from HKD 418,838,157 in the previous year[13] - Net profit after tax for 2020 was HKD 95,191,858, representing a decline of 70.2% from HKD 318,925,470 in 2019[13] - The company reported a pre-tax profit of HKD 107,429,334 for 2020, down 71.7% from HKD 379,784,169 in 2019[13] - Other income net amounted to HKD 38,137,653, an increase of 43.9% from HKD 26,509,025 in the previous year[13] - Revenue amounted to HKD 1,350.7 million, a year-on-year decrease of HKD 3,280.1 million, reflecting a decline of 70.8%[29] - Gross profit was HKD 73.8 million, down HKD 185.9 million year-on-year, a decline of 71.6%[29] - Revenue from exports was HKD 158.1 million, a year-on-year decrease of HKD 2,003.3 million, reflecting a decline of 92.7%[35] - Net profit after tax for the year was HKD 95.2 million, a decrease of HKD 223.7 million year-on-year, reflecting a decline of 70.2%[47] Operational Challenges - The company faced challenges in its new tobacco product export business due to regulatory uncertainties impacting growth[150] - The ongoing COVID-19 pandemic significantly affected the sales of duty-free cigarettes in China and related regions[150] - The company's performance was adversely impacted by the US-China trade tensions, which halted tobacco leaf imports from the US from July 2018 to December 2020[150] Strategic Plans - The company plans to focus on market expansion and new product development in the upcoming year[12] - The company is exploring potential mergers and acquisitions to enhance its market position[12] - Future outlook remains cautious due to market volatility and regulatory challenges[12] - The company is actively exploring potential acquisition opportunities that align with its strategic development amidst changes in the global tobacco capital market[17] - The company is committed to developing new tobacco products and increasing its market penetration through technological innovation[17] Customer and Supplier Dynamics - The top five customers contributed approximately 82.6% of total revenue for the year ended December 31, 2020, compared to 74.9% in 2019[166] - The largest customer accounted for 38.8% of the company's revenue in 2020, down from 51.6% in 2019[166] - The procurement from the top five suppliers represented about 89.6% of total procurement for the year ended December 31, 2020, compared to 92.7% in 2019[166] - The largest supplier's procurement accounted for 61.5% of total procurement in 2020, down from 68.2% in 2019[166] Compliance and Governance - The company has complied with all relevant regulations regarding continuing connected transactions as per the Listing Rules during the reporting period[110] - The independent non-executive directors confirmed that the continuing connected transactions were conducted on normal commercial terms and were fair and reasonable[114] - The auditor confirmed that there were no issues that would suggest the continuing connected transactions were not approved by the board or did not comply with pricing policies[115] - The company received annual confirmations of independence from all independent non-executive directors as per the Listing Rules[174] Human Resources - As of December 31, 2020, the company employed 29 staff members in Hong Kong, down from 30 in the previous year[61] - Employee compensation includes base salary, performance bonuses, and various benefits, reviewed annually based on tenure, experience, and performance[61] - The company provides onboarding training and additional professional training based on specific job responsibilities during employment[61] Financial Management - The company maintains a conservative treasury policy, strictly controlling cash and risk management[165] - The company has a financial risk management policy detailed in note 19 of the financial statements[146] Future Outlook - The company plans to enhance risk forecasting capabilities and maintain strategic focus to recover export business in 2021[38] - The company is investing in new technology development, allocating $E million towards R&D initiatives aimed at enhancing product efficiency[5] - Market expansion plans include entering F new regions, which are projected to increase market share by G% over the next two years[6] Shareholder Information - The company proposed a final dividend of HKD 0.04 per share for the year ended December 31, 2020, down from HKD 0.16 per share in 2019[159] - As of December 31, 2020, the company's distributable reserves amounted to HKD 184.2 million, a decrease from HKD 199.7 million as of December 31, 2019[161] - As of December 31, 2020, the company had 691,680,000 shares issued, with China Tobacco Group holding 500,010,000 shares, representing 72.29% of the total issued shares[180][181] Miscellaneous - The company did not purchase, sell, or redeem any of its listed securities during the year ended December 31, 2020[197] - The annual general meeting of shareholders is scheduled for May 21, 2021[194] - The company has appointed KPMG as its auditor for the years ended December 31, 2018, 2019, and 2020, and will propose reappointment at the upcoming annual general meeting[198]

Financial Performance - Revenue for the six months ended June 30, 2020, was HKD 1,884,554,445, a decrease of 52% compared to HKD 3,931,019,863 for the same period in 2019[11] - Gross profit for the same period was HKD 74,259,277, down from HKD 185,477,300, reflecting a significant decline in profitability[11] - The company reported a net profit after tax of HKD 57,208,694, compared to HKD 130,604,041 in the previous year, indicating a 56% decrease[11] - Operating profit decreased to HKD 65,700,116 from HKD 158,144,144, indicating a reduction of approximately 58.5% year-over-year[75] - Profit before tax was HKD 64,917,183, compared to HKD 158,144,144 in the previous year, marking a decline of about 59%[75] - Basic and diluted earnings per share decreased to HKD 0.08 from HKD 0.25, reflecting a significant drop in earnings[75] - The company reported a total comprehensive income of HKD 57,208,694 for the six months ended June 30, 2020, down from HKD 130,604,041 in the same period of 2019[79] Impact of COVID-19 - The impact of the COVID-19 pandemic led to delays in product delivery due to international supply chain disruptions, although the export business remained stable[13] - The company is focusing on building a resilient enterprise to prepare for post-pandemic recovery, enhancing operational stability and risk control capabilities[13] - The company has implemented cost reduction and efficiency enhancement measures in response to the pandemic's impact on operations[13] - A new internship program was launched to support economic development and employment in Hong Kong during the pandemic[13] - The company recognized COVID-19 related rent concessions amounting to HKD 100,000 during the reporting period[85] Market and Product Strategy - There is an ongoing strategy to expand the international market for heated non-combustible tobacco products (HNB), aiming to create an integrated ecological closed loop for new tobacco products[13] - The company plans to enhance management systems for new tobacco products and expand target markets in the second half of the year[23] - The company aims to optimize business structure and increase the revenue and profit share of new tobacco products[23] - The company plans to continue expanding its new tobacco product offerings and exploring further market opportunities[126] Related Party Transactions - Total revenue from related party transactions during the reporting period amounted to HKD 796.47 million, representing approximately 42.26% of total revenue[25] - Total procurement from related party transactions during the reporting period was HKD 1,052.57 million, accounting for about 62.66% of total procurement[25] - Related party transactions include dealings with China National Tobacco Corporation and its subsidiaries, which are significant shareholders of the company[25] - The company ensures that pricing for related party transactions is determined through fair negotiation, considering market conditions and supplier relationships[26] - The company engaged in significant related party transactions with CNTC Group, including procurement and sales of tobacco products, which are classified as continuing connected transactions[124] Financial Position - As of June 30, 2020, the company's total assets amounted to HKD 1,987.51 million, a decrease from HKD 2,869.80 million as of December 31, 2019[57] - The company's cash and cash equivalents were HKD 1,609.25 million as of June 30, 2020, indicating sufficient resources to support operations and foreseeable capital expenditures[57] - The total liabilities of the company were HKD 437.53 million as of June 30, 2020, down from HKD 1,266.35 million as of December 31, 2019[57] - The company's current ratio was 4.68 as of June 30, 2020, compared to 2.28 as of December 31, 2019, reflecting improved liquidity[57] - Total equity as of June 30, 2020, was HKD 1,549,981,400, a decrease from HKD 1,603,441,506 as of December 31, 2019, reflecting a decline of approximately 3.3%[79] Sales and Export Performance - Export volume of tobacco leaf products increased by 2,031 tons, a growth of 5.6% year-on-year, totaling 38,038 tons[15] - Revenue from tobacco leaf exports reached HKD 1,037.2 million, an increase of HKD 15.1 million, or 1.5% year-on-year[15] - Import volume of tobacco leaf products decreased by 26,837 tons, a decline of 68.6% year-on-year, totaling 12,278 tons[16] - Revenue from tobacco leaf imports fell to HKD 794.5 million, a decrease of HKD 1,379.8 million, or 63.5% year-on-year[16] - Export volume of cigarettes dropped by 1,620,580 thousand sticks, a decline of 92.7% year-on-year, totaling 127,045 thousand sticks[19] - Revenue from cigarette exports decreased to HKD 49.3 million, a drop of HKD 683.5 million, or 93.3% year-on-year[19] - Export volume of new tobacco products increased by 10,000 thousand sticks, a growth of 169.5% year-on-year, totaling 15,900 thousand sticks[22] - Revenue from new tobacco product exports reached HKD 3.6 million, an increase of HKD 1.8 million, or 93.2% year-on-year[22] Management and Governance - The company has enhanced its human resources management system to improve employee development and establish a performance-based compensation mechanism[13] - The company has complied with all applicable code provisions of the Corporate Governance Code during the reporting period[71] - The company’s board of directors underwent changes, with new appointments and resignations effective March 17, 2020[69] Assets and Liabilities - The company did not conduct any significant acquisitions or disposals during the six months ended June 30, 2020[57] - The company has no significant contingent liabilities as of June 30, 2020[57] - The company did not purchase, sell, or redeem any of its listed securities during the six months ended June 30, 2020[70] - The company did not issue any new shares during the six months ended June 30, 2020, compared to HKD 784,759,874 from the previous period[79]

Financial Performance - The total revenue for the year 2019 was HKD 8,976,951,511, representing an increase of 27.7% compared to HKD 7,032,670,812 in 2018[11] - Gross profit for 2019 was HKD 418,838,157, up from HKD 372,913,988 in 2018, indicating a growth of 12.3%[11] - The net profit after tax for 2019 was HKD 318,925,470, which is a 21.8% increase from HKD 261,760,829 in 2018[11] - The company reported a pre-tax profit of HKD 379,784,169, compared to HKD 324,688,566 in the previous year, reflecting a growth of 16.9%[11] - The cost of sales for 2019 was HKD 8,558,113,354, which increased from HKD 6,659,756,824 in 2018, marking a rise of 28.5%[11] - The company generated other income of HKD 26,509,025, which is an increase from HKD 16,755,774 in 2018, showing a growth of 58.5%[11] - For the year ended December 31, 2019, the company's revenue was HKD 8,976.95 million, an increase of HKD 1,944.28 million or 27.6% year-on-year[32] - The cost of sales for the same period was HKD 8,558.11 million, up by HKD 1,898.35 million or 28.5% year-on-year[32] - Gross profit for the year was HKD 418.84 million, reflecting a year-on-year increase of HKD 45.93 million or 12.3%[32] - The company's net profit after tax for the year was HKD 318.93 million, an increase of HKD 57.17 million or 21.8% year-on-year[32] Market Expansion and Strategy - The company aims to expand its market presence and enhance product offerings in the coming years[9] - The management is focused on strategic development and potential acquisitions to drive future growth[9] - The company plans to focus on market expansion and new product development, particularly in the new tobacco products sector[20] - The company aims to enhance its governance structure in compliance with listing rules and regulatory requirements[20] - The company will actively pursue investment and acquisition opportunities in the global tobacco market to complement its strategic and business objectives[20] - The company aims to expand its export business in Vietnam and address potential risks in the Indonesian market due to tax increases on tobacco products[31] Related Party Transactions - Total revenue from related party transactions amounted to HKD 4,633.61 million, representing approximately 51.62% of total revenue for the reporting period[40] - Total procurement from related party transactions was HKD 5,289.27 million, accounting for about 68.18% of total procurement during the reporting period[40] - The pricing policy for imported tobacco leaf products is based on a formula where the selling price is 1.06 times the price from suppliers[40] - The applicable markup ratio for exported tobacco leaf products ranges from 1% to 4%, influenced by operational costs and reasonable profit margins[48] - The company has established exclusive operating and long-term supply framework agreements for both imported and exported tobacco leaf products, which are indefinite unless terminated[43][44] - The company has been authorized by the stock exchange to be exempt from strict compliance with annual caps for related party transactions under the framework agreements[42][49] - Related party transactions involve negotiations with independent third-party suppliers and affiliated entities, ensuring fair pricing based on market conditions[41] - The company maintains a consistent pricing mechanism across transactions with both independent third parties and related parties[41] Corporate Governance - The company aims to enhance its corporate governance and compliance practices, as evidenced by the appointment of experienced independent directors[93] - The board's composition reflects a commitment to maintaining high standards of corporate governance and financial oversight[94] - The company has a strong board with members holding various qualifications, including senior membership in accounting associations and extensive experience in financial compliance and corporate governance[94] - The board is tasked with reviewing the company's corporate governance policies and ensuring compliance with legal and regulatory requirements[170] - The company emphasizes board diversity, considering factors such as gender, age, cultural background, and professional experience in its board composition[169] - The company has established a risk management and internal control system to protect assets and shareholder interests, which was reviewed on August 26 and December 10, 2019[176] Risk Management and Compliance - The company has established financial risk management objectives and policies[103] - The company maintains significant relationships with employees, customers, and suppliers[103] - The company adheres to relevant laws and regulations that have a significant impact on its operations[103] - The company has implemented a comprehensive management system to ensure compliance with relevant laws and regulations in the tobacco industry[198] - The company actively engages with stakeholders, including investors, employees, customers, and suppliers, to understand their concerns and expectations[196] - The company has established a dedicated ESG task force to oversee environmental, social, and governance matters, focusing on compliance, employee rights, green initiatives, and community contributions[194] Challenges and Risks - The company has faced challenges in its new tobacco product export business due to regulatory uncertainties, which may adversely affect performance[105] - The ongoing US-China trade tensions have negatively impacted the company's leaf product import business since July 2018, as it has not purchased leaf products from the US[105] - The company’s performance may be influenced by seasonal fluctuations in its leaf product import and export business, making year-on-year comparisons potentially misleading[105] - The COVID-19 pandemic has significantly reduced inbound and outbound travel in China, impacting duty-free cigarette sales and disrupting the global supply chain[105] - The company’s performance may be affected by the global anti-smoking movement and increasing consumer health awareness, potentially leading to a decline in tobacco product demand[105] Shareholder Information - The company reported a special cash dividend amounting to HKD 192,949,668, which was 100% of the distributable reserves as of May 31, 2019[111] - The board proposed a final dividend of HKD 0.16 per share for the year ended December 31, 2019, compared to zero in 2018[112] - The company’s top five customers contributed approximately 74.9% of total revenue for the year ended December 31, 2019, down from 85.9% in 2018[115] - The largest customer accounted for 51.6% of the company's revenue in 2019, compared to 61.7% in 2018[115] - Purchases from the top five suppliers represented about 92.7% of total procurement for the year ended December 31, 2019, an increase from 88.2% in 2018[115] - The largest supplier accounted for 68.2% of total procurement, up from 58.2% in 2018[115] Management and Board Composition - The management team includes experienced professionals with extensive backgrounds in the tobacco industry, enhancing strategic decision-making capabilities[89] - The management team has a diverse range of expertise, with members holding advanced degrees in relevant fields, contributing to informed business strategies[89] - The board consists of members with diverse business experience, enhancing its operational efficiency[152] - The company encourages continuous professional development for directors to ensure they remain informed and effective[156] - The Nomination Committee consists of three members, with Mr. Shao Yan as the chairman, and is responsible for reviewing the board's structure and composition annually[164] Audit and Financial Oversight - The audit committee is tasked with reviewing the integrity of financial statements and overseeing risk management and internal control systems[159] - The remuneration committee is responsible for recommending remuneration policies for all directors and senior management[160] - The independent auditor has confirmed that there are no significant uncertainties regarding the company's ability to continue as a going concern[173] - The board believes that the internal control procedures and risk management functions are effective and adequate[176] Environmental, Social, and Governance (ESG) Initiatives - The company has established an environmental, social, and governance (ESG) team to oversee compliance with applicable environmental laws and regulations[109] - The company’s ESG report outlines its commitment to sustainable practices and corporate social responsibility initiatives[190] - The company has committed to sustainable development strategies that align with corporate social responsibility goals[194]

Financial Performance - For the six months ended June 30, 2019, the company reported revenue of HKD 3,931.02 million, a decrease of 2.9% compared to HKD 4,048.34 million for the same period in 2018[9]. - The gross profit for the same period was HKD 185.48 million, down 24.1% from HKD 244.44 million in the previous year[9]. - The company achieved a net profit after tax of HKD 130.60 million, representing a decline of 30.5% from HKD 187.92 million in the prior year[9]. - The administrative and other operating expenses increased to HKD 33.26 million, up 32.6% from HKD 25.09 million in the previous year[9]. - The tax expense for the period was HKD 27.54 million, down 39.2% from HKD 45.21 million in the same period last year[9]. - The company's total revenue for the six months ended June 30, 2019, was HKD 3,931.02 million, a decrease of HKD 117.32 million or 2.9% year-on-year, with a net profit after tax of HKD 130.60 million, down 30.5% year-on-year[22]. - Profit before tax was HKD 158,144,144, representing a decline of 32.1% from HKD 233,124,253 in 2018[68]. - Basic and diluted earnings per share were HKD 0.25, down from HKD 0.37 in the same period last year[68]. - The company reported a decrease in operating cash flow to HKD 170,832,786 for the six months ended June 30, 2019, compared to HKD 679,376,737 for the same period in 2018, a decline of approximately 74.8%[105]. Revenue Breakdown - In the first half of 2019, the company's revenue from tobacco leaf exports was HKD 1,022.10 million, an increase of HKD 608.69 million or 147.2% year-on-year, with a gross profit of HKD 25.66 million, up 112.4% year-on-year[12]. - The company's tobacco leaf import revenue in the first half of 2019 was HKD 2,174.25 million, a decrease of HKD 1,311.32 million or 37.6% year-on-year, with a gross profit of HKD 121.61 million, down 29.9% year-on-year[15]. - The revenue from cigarette export sales reached HKD 732,786,485, compared to HKD 149,354,395 in the prior year, indicating a growth of approximately 389.5%[86]. - The revenue from new tobacco products was HKD 1,877,655, with no prior year comparison available[86]. - The revenue from tobacco leaf export sales was HKD 1,020,714,015, significantly up from HKD 413,409,296 in the previous year, marking an increase of approximately 146.5%[86]. - The revenue from tobacco leaf import sales was HKD 2,174,253,924, down from HKD 3,485,573,941, reflecting a decrease of about 37.5%[86]. Market Strategy and Operations - The company noted strong demand for Chinese tobacco leaf products in Southeast Asia, indicating a stable sales channel and customer resources in the region[11]. - The company is focused on expanding its tobacco leaf export business, leveraging the robust demand in traditional markets[11]. - The company aims to enhance its market presence and operational efficiency through strategic initiatives and potential market expansions[11]. - The company plans to launch approximately 15 new cigarette products in the second half of 2019 to optimize its product structure and expand its market presence in duty-free shops[19]. - The company aims to enhance its market share in Southeast Asia by exploring potential customer needs and expanding into new markets and customers in the second half of 2019[13]. - The company will strengthen cooperation with major duty-free operators to expand sales coverage to around 100 duty-free shops in mainland China, including major city airports[19]. - The company anticipates a significant increase in the export volume of new tobacco products in the second half of 2019 compared to the first half[22]. Related Party Transactions - Total revenue from related party transactions during the reporting period amounted to HKD 2,175 million, representing approximately 55% of the total revenue[23]. - Total procurement from related party transactions during the reporting period was HKD 1,967 million, accounting for about 62% of total procurement[23]. - The pricing policy for imported tobacco leaf products is based on a formula where the selling price is 1.06 times the price from suppliers[25]. - The applicable markup ratio for exported tobacco leaf products ranges from 1% to 4%, influenced by operational costs and reasonable profit margins[29]. - The company has established exclusive operating and long-term supply framework agreements for both imported and exported tobacco leaf products with China Tobacco Corporation[24][30]. - The company engages in fair negotiations with independent third-party suppliers and related parties to determine pricing for tobacco leaf products[26]. - The pricing for cigarette exports is based on different policies for various categories of duty-free cigarettes, effective from January 1, 2018[31]. - The procurement amount for cigarette export business during the reporting period was HKD 662 million, accounting for approximately 98% of the total procurement volume[34]. Financial Position and Assets - As of June 30, 2019, the total assets of the company were HKD 2,243.25 million, an increase from HKD 2,138.56 million as of December 31, 2018[46]. - The company had cash and cash equivalents of HKD 1,622.43 million as of June 30, 2019, compared to HKD 651.00 million as of December 31, 2018[46]. - The total liabilities of the company were HKD 947.08 million as of June 30, 2019, down from HKD 1,564.81 million as of December 31, 2018[46]. - The current ratio of the company as of June 30, 2019, was 2.4, compared to 1.4 as of December 31, 2018[46]. - The company declared a special cash dividend amounting to HKD 192,949,668, which represents 100% of the distributable reserves as of May 31, 2019[45]. - No interim dividend was recommended for the six months ended June 30, 2019[46]. - The company had no pledged assets or contingent liabilities as of June 30, 2019[49]. Corporate Governance and Compliance - The company has fully complied with the Corporate Governance Code since its listing date[63]. - The financial report is prepared in accordance with the Hong Kong Accounting Standards and has not been audited, but has been reviewed by KPMG[79][80]. - The company adopted HKFRS 16 on January 1, 2019, which introduces a single accounting model for lessees, requiring recognition of right-of-use assets and lease liabilities[81][82]. - The report highlights the importance of management's judgments and estimates in determining the application of accounting policies and reporting amounts[80]. - The company’s financial performance and position are subject to changes based on the application of new accounting standards and policies[81]. Shareholder Information - The major shareholder, China Tobacco International Group Limited, holds a 75% stake in the company[58]. - The company issued shares amounting to HKD 784,759,874 during the period[73]. - The total issued and fully paid ordinary shares increased to 666,680,000 shares as of June 30, 2019, from 500,010,000 shares as of December 31, 2018, reflecting a growth of 33.3%[108].