Investment Rating - Maintains a "Buy" rating with a target price of HKD 20.2, representing a 24% upside from the current price [1][2] Core Views - The company's revenue for the first half of 2024 reached HKD 8.7 billion, a year-on-year increase of 12.4%, with net profit of HKD 680 million, up 33% year-on-year [1] - Expected net profits for 2024/2025/2026 are HKD 900 million, HKD 970 million, and HKD 1.09 billion, respectively, with corresponding EPS of HKD 1.12, HKD 1.20, and HKD 1.34 [1][2] - The tobacco leaf import business grew by 5.5% in revenue, driven by a 4.1% price increase, while the export business grew by 23%, with a 13.1% price increase [2] - Cigarette export revenue surged by 128%, with a 96% increase in volume, reaching 1.1 billion sticks, still below pre-pandemic levels of 5.5 billion sticks annually [2] - New tobacco products saw a 28.4% revenue increase, with a 41.3% volume growth despite a 9.1% price decline [2] - The Brazilian tobacco business contributed HKD 390 million in revenue, up 42.7%, driven by a 67% price increase despite a 14.5% volume decline [2] - The company declared its first interim dividend of HKD 0.15 per share, with an expected dividend yield of 2.6% for the year [2] Financial Performance - Revenue for 2024E is projected at HKD 13.1 billion, with a 10.7% growth rate, followed by 10.0% and 10.2% growth in 2025E and 2026E, respectively [3][8] - Gross margin improved to 10.9% in H1 2024, up 1.4 percentage points year-on-year, with further improvements expected to 11.1%, 11.2%, and 11.4% in 2024E, 2025E, and 2026E [2][3] - Net profit margin is forecasted to rise to 6.9% in 2024E, up from 5.8% in 2023A, and remain stable at 6.8% in 2025E and 2026E [3][8] - ROE is expected to peak at 29.7% in 2024E before moderating to 26.1% and 24.4% in 2025E and 2026E, respectively [3][16] Valuation Analysis - Comparable company analysis suggests a 16x PE multiple for 2025E, implying a target price of HKD 19.2 [9] - DCF valuation, assuming a WACC of 10% and a long-term growth rate of 2%, yields a fair value of HKD 21.3 [9] - The blended target price of HKD 20.2 is based on a combination of comparable company and DCF valuations [9] Industry and Business Outlook - The tobacco leaf import and export businesses are in an upward cycle, benefiting from rising prices and volume growth [2] - Post-pandemic recovery in passenger traffic has driven a rebound in cigarette exports, with significant growth potential as volumes remain below pre-pandemic levels [2] - Expansion in new tobacco products and potential M&A activities are identified as future growth drivers [2] - The company's strategic focus on higher-margin self-operated businesses and new product launches is expected to sustain profitability [2]

Investment Rating - Buy (maintained) [1] Core Views - China Tobacco Hong Kong (06055) reported strong H1 2024 results with total revenue of HKD 8.7 billion, up 12.4% YoY, and net profit attributable to shareholders of HKD 640 million, up 40.8% YoY [2] - The company announced an interim dividend of HKD 0.15 per share starting from 2024 [2] - Cigarette export revenue surged 127.9% YoY to HKD 550 million, driven by recovery in duty-free market traffic [3] - Tobacco leaf import revenue increased 5.5% YoY to HKD 6.8 billion, while tobacco leaf export revenue rose 23.0% YoY to HKD 920 million [3] - New tobacco product export revenue grew 28.4% YoY to HKD 44 million, and Brazil operations revenue increased 42.8% YoY to HKD 390 million [3] - Gross margin improved to 11.1%, up 1.5 percentage points YoY, with cigarette export gross margin rising significantly to 22.2%, up 6.5 percentage points YoY [3] Financial Performance Summary - Revenue breakdown: Tobacco leaf import (HKD 6.8 billion, +5.5% YoY), tobacco leaf export (HKD 920 million, +23.0% YoY), cigarette export (HKD 550 million, +127.9% YoY), new tobacco product export (HKD 44 million, +28.4% YoY), Brazil operations (HKD 390 million, +42.8% YoY) [3] - Gross margin improvement driven by higher-margin cigarette exports and optimized product mix [3] - Net profit margin increased to 7.4%, up 1.5 percentage points YoY [3] Market Data - Current price: HKD 16.72 [4] - 52-week price range: HKD 8.61-17.88 [4] - Market capitalization: HKD 11.56 billion [4] - Average daily turnover: HKD 53.35 million [4] Forecast and Valuation - Revenue forecast for 2024E-2026E: HKD 13.4 billion (+13% YoY), HKD 14.7 billion (+10% YoY), HKD 15.9 billion (+8% YoY) [5] - Net profit forecast for 2024E-2026E: HKD 848 million (+42% YoY), HKD 969 million (+14% YoY), HKD 1.07 billion (+10% YoY) [5] - 2024E-2026E P/E ratios: 13.6x, 11.9x, 10.8x [5] - ROE expected to remain strong at around 30% from 2024E to 2026E [6] Key Drivers - Recovery in duty-free market traffic driving cigarette export growth [3] - Optimization of product mix and expansion of self-operated business scale improving margins [3] - Strong demand for tobacco leaf in international markets supporting export growth [3] - Focus on key brand cultivation and marketing efforts boosting new tobacco product sales [3]

Investment Rating - The investment rating for China Tobacco Hong Kong (06055) is "Buy" with a target price of 16.4 HKD, maintaining the rating as of August 28, 2024 [1]. Core Insights - The report highlights that China Tobacco Hong Kong achieved record performance in H1 2024, with revenue reaching 8.704 billion HKD, a year-on-year increase of 12.4%, and a net profit attributable to shareholders of 643 million HKD, up 40.8%, exceeding previous profit expectations [1]. - The company declared an interim dividend of 0.15 HKD per share for the first time [1]. - The report emphasizes the company's unique position as the only international business platform for China National Tobacco Corporation, which is expected to benefit from ongoing international expansion and potential mergers and acquisitions [1]. Summary by Sections Business Performance - The five major business segments of the company showed comprehensive growth, with notable performance in cigarette export business [1]. - Leaf export revenue in H1 2024 was 918 million HKD, up 23.0%, accounting for 10.5% of total revenue with a gross margin of 3.1% [1]. - Leaf import revenue reached 6.802 billion HKD, a 5.5% increase, representing 78.1% of total revenue with a gross margin of 10.9% [1]. - Cigarette export revenue was 547 million HKD, a significant increase of 127.9%, with a gross margin of 22.2% [1]. - New tobacco product export revenue was 44 million HKD, up 28.4%, contributing 0.5% to total revenue with a gross margin of 4.8% [1]. - Brazilian operations generated 393 million HKD in revenue, a 42.8% increase, with a gross margin of 17.2% [1]. Competitive Advantages - The company possesses a rare advantage as the exclusive operator of international tobacco business for China National Tobacco Corporation, which is expected to continue benefiting from overseas expansion and integration opportunities [1]. - The business model demonstrates strong cash flow and pricing power, supported by stable revenue growth and low volatility in gross margins [1]. - The report projects an upward revision of net profit forecasts for 2024, 2025, and 2026 to 766 million HKD, 885 million HKD, and 1.066 billion HKD respectively, reflecting the company's unique position and growth potential [1].

Financial Performance - Revenue for the six months ended June 30, 2024, was HKD 8,704,047, representing a 12% increase compared to HKD 7,743,999 for the same period in 2023[2] - Gross profit increased by 29% to HKD 964,215 from HKD 745,345 year-on-year[2] - Net profit attributable to equity holders for the period was HKD 643,341, a 41% increase from HKD 456,952 in the previous year[2] - Total comprehensive income for the period was HKD 669,530, up from HKD 517,235 in the previous year[5] - The pre-tax profit for the period was HKD 842,316 thousand, with a net profit of HKD 679,702 thousand after tax[17] - The net profit for the period was HKD 510,540,000, reflecting an increase from HKD 341,819,000 in the previous year, which is a rise of approximately 49%[21] - Net profit for the six months rose by 33% to HKD 679.7 million, compared to HKD 510.5 million in 2023[46] Dividends - The company announced an interim dividend of HKD 0.15 per share for 2024, reflecting its strong profitability and cash flow[2] - The company declared a final dividend of HKD 0.32 per share for 2023, totaling HKD 221,338,000, up from HKD 0.20 per share in 2022, which was HKD 138,336,000[27] - The board declared an interim dividend of HKD 0.15 per share for the six months ending June 30, 2024[55] Revenue Breakdown - Revenue from tobacco leaf products sales reached HKD 8,112,880 thousand, up from HKD 7,469,818 thousand, reflecting a growth of 8.7%[13] - The revenue from cigarette sales increased significantly to HKD 547,323 thousand, compared to HKD 240,131 thousand, marking a growth of 128.5%[13] - The revenue from new tobacco products was HKD 43,517 thousand, up from HKD 33,895 thousand, representing a growth of 28.4%[13] - The group's revenue from mainland China was HKD 7,256,648 thousand, an increase of 9.8% from HKD 6,607,111 thousand in the previous year[14] Costs and Expenses - Financing costs rose by 60% to HKD 115,463 from HKD 72,365 year-on-year[2] - The financing costs for the period were HKD 115,463,000, up from HKD 72,365,000 in the previous year, representing an increase of approximately 60%[24] Assets and Liabilities - Current assets increased to HKD 9,211,367 from HKD 6,213,612 as of December 31, 2023[6] - The company's net asset value as of June 30, 2024, was HKD 3,143,484, compared to HKD 2,695,292 at the end of 2023[7] - The total assets of the reportable segments amounted to HKD 9,665,203 thousand as of June 30, 2024[17] - The total liabilities of the reportable segments were HKD 6,521,719 thousand as of June 30, 2024[17] Market Expansion and Strategy - The company continues to focus on expanding its tobacco product exports to Southeast Asia, Hong Kong, Macau, Taiwan, and Europe[8] - The company is exploring potential acquisitions to strengthen its competitive position in the market[66] - Strategic initiatives are being implemented to improve operational efficiency, aiming for a 15% reduction in costs over the next year[66] - The company is expanding its market presence in the exclusive operating regions, targeting a 25% increase in market share by 2025[66] Research and Development - Research and development investments have increased by 30%, focusing on innovative technologies to enhance product offerings[66] Corporate Governance - The group has complied with all applicable code provisions of the Corporate Governance Code during the six months ending June 30, 2024[60] - The company remains committed to adhering to corporate governance standards as outlined in the Corporate Governance Code[65] Employee Costs - As of June 30, 2024, the group employed 47 staff in Hong Kong and 254 in Brazil, with total employee costs amounting to HKD 63.1 million, up from HKD 54.9 million in 2023[54]

Company and Industry Overview * **Company**: Zhongyuan Hong Kong, a publicly listed company under China Tobacco, focusing on tobacco products and international expansion. * **Industry**: Tobacco industry, with a significant global market share held by China Tobacco. * **Key Points**: * Zhongyuan Hong Kong was listed on the Hong Kong Stock Exchange in June 2019 and is the only publicly listed tobacco company under China Tobacco. * The company operates in three main segments: raw tobacco, cigarettes, and new tobacco products, with a focus on international markets. * Zhongyuan Hong Kong aims to expand its international market presence and establish a strong position in the global tobacco industry. Business Segments and Performance * **Raw Tobacco**: * Imports: Exclusively operates in non-sanctioned regions globally, with a focus on countries like Brazil, Argentina, and the United States. * Exports: Mainly operates in Southeast Asia, Hong Kong, Macau, and Taiwan, as well as Europe. * Performance: Imports increased by 27% in 2023, with revenue growing by 49% and gross profit increasing by 18%. * Challenges: Global supply shortages and fluctuating prices due to weather conditions and climate change. * **Cigarettes**: * Exports: Initially focused on two countries and three regions (Thailand, Singapore, Hong Kong, Macau, and China's domestic duty-free stores). * Performance: Revenue and gross profit increased significantly in 2023, driven by strong sales in the first half of the year and improved product pricing and increased自营比例. * Future Outlook: Continued growth expected due to the recovery of passenger traffic and increased product pricing and自营比例. * **New Tobacco Products**: * Exports: Exclusively operates in regions outside of China, with a focus on heat-not-burn products. * Performance: Revenue and gross profit increased in 2023, driven by strong demand and improved product pricing. * Future Outlook: Expected to continue growing due to increased investment and market expansion. Financial Performance and Dividends * **Revenue**: Increased by 42% in 2023, reaching over 10 billion yuan. * **Gross Profit**: Increased by 42% in 2023, reaching over 3.6 billion yuan. * **Dividends**: Increased the dividend per share by 60% to 0.32 yuan, with an additional interim dividend to be paid in 2024. Future Outlook and Strategy * **Business Growth**: Expected to continue growing in the coming years, driven by the recovery of passenger traffic, increased product pricing, and expanded market presence. * **International Expansion**: Continues to focus on expanding its international market presence and establishing a strong position in the global tobacco industry. * **Investment**: Continues to look for opportunities to acquire assets in the tobacco industry, both within and outside of China Tobacco. * **Dividends**: Expected to continue increasing dividends to provide investors with a stable and growing income stream.

2024 年 6 月 19 日 首次覆盖 中烟香港（6055.HK） 证券研究报告 食品饮料 烟叶进口量价齐升，卷烟出口增长强劲 投资评级： Xx 买入 xx 报告摘要 目标价格： 20.2 元 中烟香港（6055.HK）是主营烟叶进出口、卷烟出口、新型烟草出口业务。公司成立于2004 年，总部设在香港，为中烟国际负责资本市场运作和国际业务拓展的指定境外平台。 现价(2024-6-18)： 16.9港元 公司近年来业绩持续增长。公司 23 年业绩突破历史新高，收入 118 亿港元，同比增长 42%，净利润6.9亿港元，同比增长49%，增长强劲。公司发布盈喜，预期上半年收入增 长不低于10%，净利润增长不低于30%。业绩增长的主要推动因素包括：1）卷烟出口业 总市值(百万港元) 11,689.39 务的持续恢复，由此带来收入和毛利的大幅增长；2）烟叶进口业务实现量价齐增；3） 流通市值(百万港元) 11,689.39 烟叶出口业务的收入和毛利实现增长。今年公司整体发展态势良好，业绩增长强劲。 总股本(百万股) 691.68 我们认为中烟香港的核心竞争力来自其独特的特许经营权：公司独家经营烟草进口至国 流通股本( ...

2024 年 06 月 06 日 公司研究 评级：买入 (首次覆盖 ) 研究所： [Table_Title] 业绩盈喜，看好公司出口业务发展 2024H1 证券分析师： 马川琪 S0350523050001 macq@ghzq.com.cn 联系人 ： 廖小慧 S0350122080035 ——中烟香港（ ）事件点评报告 06055 liaoxh@ghzq.com.cn 最近一年走势 事件 : 中烟香港（06055）于 2024 年6月3日发布正面盈利公告：集团预计 2024上半年收入同比增速不低于10%，公司所有者应占利润同比增速不 低于30%。 投资要点 :  背靠中烟集团，2023年营收首次破百亿港元。中烟国际(香港)有限 公司成立于2004年2月26日，公司为中烟国际负责资本运作及国 相对恒生指数表现 2024/06/05 际业务拓展的指定境外平台。中烟国际为中国烟草总公司的全资附 表现 1M 3M 12M 属子公司，主营产品包括烟叶、卷烟和新型烟草制品（如电子烟）。 中烟香港 38.4% 79.7% 83.4% 按业务划分来看，公司业务主要分为进口与出口，进口业务：从全 恒生指数 -0.3% 14 ...

港股公司报告 | 公司点评 中烟香港（06055） 证券研究报告 2024年06月 04日 投资评级 预告 24H1业绩明显增长，看好公司出海加速、外延扩张! 行业 必需性消费/食物饮品 6个月评级 买入（维持评级） 当前价格 16.1港元 事件：公司发布正面盈利预告，2024 年上半年预计收入同比增幅不低于 目标价格 港元 10%，公司所有者应占利润同比增幅不低于30%。 烟叶进出口业务与卷烟出口业务景气上行 基本数据 港股总股本(百万股) 691.68 ➢ 烟叶类出口业务：公司积极组织适销货源，优化定价策略，使烟 港股总市值(百万港元) 11,136.05 叶类产品出口业务的收入及毛利录得增长； 每股净资产(港元) 3.61 ➢ 烟叶类进口业务：受烟叶季节性波动影响，2024H1烟叶类产品进 资产负债率(%) 60.01 口数量增长且销售单价提高，使烟叶类产品进口业务的收入及毛 一 年内最高/最低(港元) 16.16/8.61 利实现增长； ➢ 卷烟出口业务：得益于疫情后免税店消费客流持续恢复，公司进 作者 一步优化卷烟产品组合，提升自营业务占比，使卷烟出口业务的 吴立 分析师 收入及毛利大幅增长。 SA ...

Financial Performance - The company reported a revenue of HKD 1.2 billion for the fiscal year 2023, representing a 15% increase compared to the previous year[1]. - The company achieved a revenue of HKD 11,836,221 thousand for the year 2023, representing a 42% year-on-year increase compared to HKD 8,324,205 thousand in 2022[12]. - Total revenue for the year ended December 31, 2023, was HKD 11,836,221 thousand, an increase of 9.9% from HKD 10,747,897 thousand in 2022[188]. - Operating profit for 2023 reached HKD 1,026,455 thousand, up 46.5% compared to HKD 700,672 thousand in 2022[188]. - Net profit for the year was HKD 692,373 thousand, representing a 49.2% increase from HKD 464,160 thousand in the previous year[188]. - The net profit attributable to equity holders of the company was HKD 598,773 thousand, a 60% increase from HKD 374,905 thousand in the previous year[12]. - Basic and diluted earnings per share increased to HKD 0.87 from HKD 0.54, reflecting a growth of 61.1%[188]. - The gross profit margin improved to 40%, up from 35% in the previous year[1]. - The company reported a gross profit of HKD 1,088,324 thousand, which is a 35.0% increase from HKD 806,389 thousand in 2022[188]. Market Expansion and Strategy - The company expects a revenue growth of 10% for the next fiscal year, projecting a target of HKD 1.32 billion[1]. - New product launches are anticipated to contribute an additional HKD 200 million in revenue in 2024[1]. - The company is expanding its market presence in Southeast Asia, aiming for a 25% market share by 2025[1]. - A strategic acquisition of a local competitor is expected to enhance operational efficiency and increase market penetration[1]. - The company is committed to expanding its market presence in non-China markets and enhancing the competitiveness of its products[13]. - The company plans to enhance its operational capabilities and focus on sustainable development to ensure stable cash flow and long-term returns for shareholders[15]. - The company aims to explore investment and acquisition opportunities that create synergies with its strategic and business goals[15]. Supply Chain and Procurement - The company has established a long-term supply agreement with key suppliers to ensure product availability and cost stability[1]. - The company is focusing on improving the efficiency of its supply chain and optimizing pricing strategies to enhance profitability in the tobacco leaf business[15]. - The procurement transaction amount for tobacco leaf products during the reporting period was HKD 249.1 million, accounting for approximately 3.2% of the total procurement amount for tobacco leaf products[64]. - The total procurement amount from related party transactions at the issuer level was HKD 3,088.5 million, which is approximately 27.6% of total procurement during the reporting period[37]. Related Party Transactions - The total revenue from related party transactions at the issuer level was HKD 8,079.0 million, accounting for approximately 68.3% of total revenue during the reporting period[37]. - The total revenue from related party transactions at the subsidiary level was HKD 965.5 million, representing about 8.2% of total revenue during the reporting period[37]. - 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[39][42]. - The company has been authorized by the Stock Exchange to be exempt from strict compliance with annual caps for sales transactions under the imported tobacco leaf products framework agreement[41]. Financial Position and Assets - Current assets net value increased to HKD 2,216.0 million as of December 31, 2023, from HKD 1,824.1 million as of December 31, 2022[29]. - Total assets amounted to HKD 6,740.4 million as of December 31, 2023, compared to HKD 6,370.5 million as of December 31, 2022[33]. - Total liabilities decreased to HKD 4,045.1 million as of December 31, 2023, from HKD 4,132.9 million as of December 31, 2022[33]. - The debt-to-equity ratio was 0.92 as of December 31, 2023, compared to 0.94 as of December 31, 2022[34]. - The current ratio improved to 1.55 as of December 31, 2023, from 1.45 as of December 31, 2022[34]. Governance and Compliance - The company emphasizes compliance and governance, with independent non-executive directors bringing diverse experience from various industries[102]. - The independent non-executive directors confirmed that the continuing connected transactions were established under fair and reasonable terms and in accordance with regulatory agreements[93]. - The company has established an ESG task force to collect and report annual ESG data and monitor compliance with relevant laws and regulations[113]. - The company has maintained compliance with corporate governance standards and has adopted applicable principles from the Corporate Governance Code[138]. Employee and Management - The company will continue to invest in talent development and employee welfare to enhance workforce productivity and creativity[14]. - The company has a strong management team with extensive experience in finance and tobacco industry, including Qian Yi, who has 14 years of experience in the tobacco sector[105]. - The workforce comprises 281 full-time junior employees, 30 full-time middle management, and 12 full-time senior management, with a gender distribution of 84.10% male and 15.90% female among junior staff[161]. Risks and Challenges - The group faces risks from global anti-smoking movements and increasing consumer health concerns, which may lead to a decline in overall demand for tobacco products[112]. - Seasonal fluctuations may impact the group's performance, making it misleading to rely solely on revenue comparisons across different periods within the fiscal year[112]. - The export business of new tobacco products may encounter challenges due to evolving regulatory interpretations and implementations, potentially hindering growth[112]. Dividends and Shareholder Returns - The company declared a final dividend of HKD 0.32 per share, which is a 60% increase compared to HKD 0.20 per share in the previous year[12]. - The company paid dividends of HKD 138,336,000 to equity holders, an increase from HKD 117,586,000 in the previous year, reflecting a commitment to returning value to shareholders[193].

港股公司报告 | 公司深度研究 中烟香港（06055） 证券研究报告 2024年04月 16日 投资评级 国内外需求回暖，践行走出去战略，中烟独家国际业务平台有望实 现高质量增长！ 行业 必需性消费/食物饮品 6个月评级 买入（维持评级） 一、中烟香港：中国烟草旗下独家国际业务平台，内生外延双轮驱动 当前价格 10港元 目标价格 17.2港元 中烟香港是中国烟草总公司（CNTC）指定的从事国际业务拓展平台及相关贸易业 务的独家营运实体，控股股东为中国烟草总公司及中烟国际集团有限公司。公司 独家运营烟叶制品进出口、卷烟出口至两国两地免税店及中国内地境内关外免税 基本数据 店、新型烟草制品出口等业务，并通过收购中烟巴西，开启巴西经营业务，进一 港股总股本(百万股) 691.68 步拓展深化产业链布局，提升盈利能力。2023年，公司实现营业收入118.36亿港 港股总市值(百万港元) 6,916.80 元，同比增加 42%，实现归属于公司权益持有人的净利润 5.99亿港元，同比大幅 每股净资产(港元) 3.61 增加 60%，此外，公司拟派发截至 2023年 12月 31日年度末期股息每股 0.32港 资产负债率( ...