香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其 準確性或完整性亦不發表任何聲明，並明確表示，概不就因本公告全部或任何部分內容 而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 中煙國際（香港）有限公司 China Tobacco International (HK) Company Limited （ 於 香 港 註 冊 成 立 的 有 限 公 司 ） （股份代號：6055） 持續關連交易 釐定年度上限 境外銷售煙葉類產品框架協議 於2025年8月29日，本公司與相關買方訂立境外銷售煙葉類產品框架協議，內容有關本 集團向中國煙草總公司旗下相關境外實體銷售煙葉類產品，作為煙葉類產品出口業務 的一部分。 各買方均為中國煙草總公司的附屬公司或聯營公司。中國煙草總公司通過其直接全資 附屬公司中煙國際集團，於本公告日期持有本公司已發行股本總額約72.29%，並為本公 司的最終控股股東。因此，各買方因屬中國煙草總公司的聯繫人，根據上市規則定義， 均為本公司的關連人士。 由於根據上市規則計算的適用百分比率，就境外銷售煙葉類產品框架協議項下擬進行 的銷售交易之最高年度上限超過0.1%但均少於 ...

Core Insights - The global oral tobacco market is projected to reach $11.232 billion in 2024, reflecting a year-on-year growth of 57.57%, and is expected to grow to $25.148 billion by 2028, with a CAGR of 22.32% from 2024 to 2028 [1][2] - The North American and European markets are experiencing high growth rates, while the Asian and African markets are in early stages, indicating significant potential for rapid development in emerging markets [1][2] - The FDA's approval of flavored oral tobacco products is anticipated to act as a catalyst for market growth, potentially increasing the overall market ceiling [1][4] Market Overview - The retail market for oral tobacco is highly concentrated, with Philip Morris International, British American Tobacco, and Altria Group holding market shares of 41.1%, 24.6%, and 13.8% respectively, totaling 79.5% of the market [2] - In 2024, the North American oral tobacco market is expected to reach $8.775 billion, growing by 58.30% year-on-year, while the European market is projected to reach $2.415 billion, with a year-on-year growth of 56.12% [1][2] Company Performance - Philip Morris International's ZYN nicotine pouch sales are projected to be 644 million boxes in 2024, a year-on-year increase of 52.93%, with U.S. sales accounting for 581 million boxes, up 51.49% [2] - British American Tobacco's oral tobacco sales, including brands like Velo and Grizzly, are expected to reach 8.3 billion pouches in 2024, reflecting a year-on-year growth of 55%, with U.S. sales surging by 234% [2] Regulatory Developments - The FDA has authorized the sale of 20 ZYN nicotine pouch products, which are deemed to have lower harmful components compared to traditional cigarettes and most smokeless tobacco products, aligning with public health standards [4] - The approval of flavored products is expected to enhance market growth and expand the market's potential [4] Industry Opportunities - Jin Cheng Pharmaceutical is increasing its production capacity to 200 tons per year, focusing on high-purity nicotine for new tobacco products, which positions the company to benefit from the expanding oral tobacco market [5][6] - The company has received various certifications, including FDA PMTA approval, which enhances its competitive edge in the market [6] Investment Recommendations - Companies to watch in the oral tobacco supply chain include Jin Cheng Pharmaceutical (300233.SZ) and Run Du Co., Ltd. (002923.SZ) [7]

Investment Rating - The investment rating for the company is "Outperform the Market" [5] Core Views - The company reported a strong revenue growth of 18.5% year-on-year, reaching HKD 10.32 billion in the first half of 2025, with a net profit increase of 9.8% to HKD 706 million [1][2] - The revenue growth was primarily driven by the import and export of tobacco leaf products and cigarette exports, while the net profit increase was attributed to improved profitability in cigarette and tobacco leaf exports, alongside a significant reduction in financing costs by 28% [1] - The company plans to distribute an interim dividend of HKD 0.19 per share, representing a 27% increase [1] Revenue Breakdown - Tobacco Leaf Imports: Revenue increased by 23.5% to HKD 8.4 billion, with an import volume of 97,900 tons (+2.5%) and an average import price of HKD 85,800 per ton (+20.5%). The gross margin decreased to 8.2% due to cost increases outpacing sales price increases [1] - Tobacco Leaf Exports: Revenue rose by 25.9% to HKD 1.16 billion, with an export volume of 38,500 tons (+12.7%) and an average export price of HKD 30,000 per ton (+11.7%). The gross margin improved to 5.5% [2] - Cigarette Exports: Revenue increased by 0.8% to HKD 550 million, with an export volume of 1.019 billion sticks (-7.9%) and an average export price of HKD 0.54 per stick (+9.4%). The gross margin improved to 25.7% [2] - New Tobacco Exports: Revenue fell by 66.5% to HKD 15 million, with an export volume of 81 million sticks (-65.4%) and an average export price of HKD 0.18 per stick (-3.0%). The gross margin remained at 5.5% [3] - Brazilian Operations: Revenue decreased by 50.3% to HKD 195 million, with an export volume of 7,900 tons (-34.8%) and an average export price of HKD 24,600 per ton (-23.8%). The gross margin improved to 27.4% [3] Financial Forecasts - The company has raised its profit forecasts, expecting net profits of HKD 940 million, HKD 1.04 billion, and HKD 1.18 billion for 2025, 2026, and 2027 respectively, reflecting year-on-year growth of 9.6%, 11.4%, and 12.9% [1][4] - The diluted EPS is projected to be HKD 1.35, HKD 1.51, and HKD 1.70 for the same years, with corresponding PE ratios of 27, 25, and 22 times [1][4]

Investment Rating - The investment rating for the company is "Outperform the Market" [5] Core Views - The company reported a strong revenue growth of 18.5% year-on-year, reaching HKD 10.32 billion in the first half of 2025, with a net profit increase of 9.8% to HKD 706 million [1][2] - The growth in revenue is primarily driven by the import and export of tobacco leaf products, as well as cigarette exports, while the net profit growth is attributed to improved profitability in cigarette and tobacco leaf exports and a significant reduction in financing costs by 28% [1][2] - The company plans to distribute an interim dividend of HKD 0.19 per share, representing a 27% increase [1] Revenue Breakdown - Tobacco Leaf Imports: Revenue increased by 23.5% to HKD 8.4 billion, with an import volume of 97,900 tons (+2.5%) and an average import price of HKD 85,800 per ton (+20.5%). The gross margin decreased to 8.2% due to cost increases outpacing sales price increases [1] - Tobacco Leaf Exports: Revenue rose by 25.9% to HKD 1.16 billion, with export volume of 38,500 tons (+12.7%) and an average export price of HKD 30,000 per ton (+11.7%). The gross margin improved to 5.5% [2] - Cigarette Exports: Revenue increased by 0.8% to HKD 550 million, with export volume declining by 7.9% to 1.019 billion sticks, while the average export price rose by 9.4% to HKD 0.54 per stick. The gross margin improved to 25.7% [2] - New Tobacco Exports: Revenue fell by 66.5% to HKD 15 million, with export volume down by 65.4% to 81 million sticks, primarily due to geopolitical conflicts and regulatory changes [3] - Brazilian Operations: Revenue decreased by 50.3% to HKD 195 million, with export volume down by 34.8% to 7,900 tons, affected by extreme weather and product mix changes [3] Financial Forecasts - The company has raised its profit forecasts, expecting net profits of HKD 940 million, HKD 1.04 billion, and HKD 1.18 billion for 2025, 2026, and 2027 respectively, reflecting year-on-year growth of 9.6%, 11.4%, and 12.9% [1][4] - The diluted EPS is projected to be HKD 1.35, HKD 1.51, and HKD 1.70 for the same years, with corresponding P/E ratios of 27, 25, and 22 [1][4]

Investment Rating - The investment rating for the company is "Outperform the Market" [5] Core Views - The company reported a strong revenue growth of 18.5% year-on-year, reaching HKD 10.32 billion in the first half of 2025, with a net profit increase of 9.8% to HKD 706 million [1][2] - The growth in revenue is primarily driven by the import and export of tobacco leaf products and cigarette exports, while the net profit increase is attributed to improved profitability in cigarette and tobacco leaf exports, alongside a significant reduction in financing costs by 28% [1][2] - The company plans to distribute an interim dividend of HKD 0.19 per share, reflecting a 27% increase [1] Revenue Breakdown - Tobacco Leaf Imports: Revenue increased by 23.5% to HKD 8.4 billion, with an import volume of 97,900 tons (+2.5%) and an average import price of HKD 85,800 per ton (+20.5%). The gross margin decreased to 8.2% due to cost increases outpacing sales price increases [1] - Tobacco Leaf Exports: Revenue rose by 25.9% to HKD 1.16 billion, with export volume of 38,500 tons (+12.7%) and an average export price of HKD 30,000 per ton (+11.7%). The gross margin improved to 5.5% [2] - Cigarette Exports: Revenue slightly increased by 0.8% to HKD 550 million, with export volume declining by 7.9% to 1.019 billion sticks, while the average export price rose by 9.4% to HKD 0.54 per stick. The gross margin improved to 25.7% [2] - New Tobacco Exports: Revenue fell by 66.5% to HKD 15 million, with export volume down by 65.4% to 81 million sticks, primarily due to geopolitical conflicts and regulatory changes [3] - Brazilian Operations: Revenue decreased by 50.3% to HKD 195 million, with export volume down by 34.8% to 7,900 tons, affected by extreme weather and product mix changes [3] Financial Forecasts - The company has raised its profit forecasts, expecting net profits of HKD 940 million, HKD 1.04 billion, and HKD 1.18 billion for 2025, 2026, and 2027 respectively, reflecting year-on-year growth rates of 9.6%, 11.4%, and 12.9% [1][4] - The diluted EPS is projected to be HKD 1.35, HKD 1.51, and HKD 1.70 for the same years, with corresponding P/E ratios of 27, 25, and 22 [1][4]

Core Viewpoint - The company reported a strong performance in the first half of 2025, with significant revenue growth driven by the tobacco leaf import and export business, despite challenges in certain segments [1][2][3][4]. Financial Performance - In H1 2025, the company achieved revenue of HKD 10.316 billion, a year-on-year increase of 18.5% [1]. - The net profit attributable to equity holders was HKD 706 million, reflecting a 9.8% increase compared to the previous year [1]. - A mid-term dividend of HKD 0.19 per share was declared, up 26.7% year-on-year [1]. Business Segment Analysis - **Tobacco Leaf Export Business**: Revenue reached HKD 1.156 billion, up 25.9% year-on-year, with a gross margin of 5.5%, an increase of 2.4 percentage points [1]. - **Tobacco Leaf Import Business**: Revenue was HKD 8.399 billion, a 23.5% increase year-on-year, with a gross margin of 8.2%, down 2.8 percentage points [1]. - **Cigarette Export Business**: Revenue was HKD 552 million, a slight increase of 0.8% year-on-year, with a gross margin of 25.7%, up 3.5 percentage points [2]. - **New Tobacco Products Export Business**: Revenue fell to HKD 15 million, a decline of 66.5% year-on-year, with a gross margin of 5.3% [2]. - **Brazil Operations**: Revenue dropped to HKD 195 million, down 50.3% year-on-year, but gross margin improved to 27.4%, up 10.2 percentage points [3]. Strategic Advantages - The company holds exclusive rights for international tobacco business operations as designated by China National Tobacco Corporation, providing a rare competitive advantage [4]. - The business model demonstrates strong cash flow and pricing power, supported by the backing of China National Tobacco Group [4]. - Future growth opportunities may arise from potential acquisitions of overseas tobacco brands and channels [4]. Profit Forecast and Valuation - Revenue projections for 2025, 2026, and 2027 are estimated at HKD 15.35 billion, HKD 17.75 billion, and HKD 20.35 billion, respectively [4]. - Net profit forecasts for the same years are HKD 950 million, HKD 1.07 billion, and HKD 1.25 billion, respectively [4].

Core Viewpoint - The company reported strong 1H25 performance with revenue increasing by 18.5% to HKD 10.32 billion and net profit rising by 9.8% to HKD 710 million, exceeding expectations due to favorable import/export dynamics and product structure optimization [1] Revenue Breakdown - Leaf import revenue grew by 23.5%, with import volume and average price increasing by 2.5% and 20.5% respectively, benefiting from a higher proportion of premium leaf [1] - Leaf export revenue increased by 25.9%, with export volume and average price rising by 12.7% and 11.7% respectively, driven by new customer acquisition and product structure optimization [1] - Cigarette export revenue grew by 0.8%, with sales volume declining by 7.9% and average price increasing by 9.4%, impacted by shipment timing [1] - New tobacco revenue decreased by 66.4%, with sales volume and average price dropping by 65.4% and 3.1% respectively, due to supply chain and regulatory challenges [1] - Brazilian business revenue fell by 50.3%, with sales volume and average price decreasing by 34.8% and 23.8% respectively, affected by climate conditions and shipment timing [1] Profitability Metrics - The company's gross margin for 1H25 was 9.2%, a decline of 1.9 percentage points, with leaf export gross margin increasing by 2.4 percentage points due to pricing strategy optimization [1] - The gross margin for cigarette exports improved by 3.5 percentage points due to a higher self-operated ratio, while Brazilian business gross margin increased by 10.2 percentage points from a higher proportion of by-product revenue [1] - The gross margin for leaf imports decreased by 2.8 percentage points due to rising costs from unfavorable climate conditions [1] - The net profit margin for 1H25 was 6.8%, down by 0.5 percentage points [1] Growth Potential - The company is expected to strengthen its international allocation capabilities in leaf imports, maintaining stable growth [1] - The company aims to enhance its tax channel development and introduce self-operated product lines in cigarette exports, with potential growth from a global exclusive distribution agreement for Long Wall cigars with Sichuan Tobacco [1] - The company is likely to seek high-quality acquisition targets aligned with group strategic goals to enhance global competitiveness [1][2] Earnings Forecast and Valuation - Based on the growth momentum in leaf import/export business, the net profit forecasts for 2025 and 2026 have been raised by 5% and 8% to HKD 980 million and HKD 1.09 billion respectively [2] - The target price has been increased by 37% to HKD 43, corresponding to 30/27 times P/E for 2025/26, indicating a 13% upside potential from the current stock price [2]

Core Viewpoint - The company reported a revenue of HKD 10.316 billion for the first half of 2025, representing an increase of 18.5%, and a net profit attributable to shareholders of HKD 706 million, up by 9.8% [1][2] - The company aims to leverage its strategic positioning as an international business expansion and capital operation platform for China National Tobacco Corporation, anticipating synergistic growth through both organic and external means [5][6] Financial Performance - The company achieved a gross margin of 9.2%, down by 1.9 percentage points, and a net profit margin of 7.0%, down by 0.8 percentage points [1][2] - Administrative and other operating expense ratio was 0.7%, down by 0.2 percentage points, while financial expense ratio was 0.8%, down by 0.6 percentage points, indicating a significant improvement in financing costs [2] Business Segments - **Tobacco Leaf Import Business**: Revenue reached HKD 8.399 billion, up 23.5%, with a gross margin of 8.2%, down by 2.8 percentage points. The import volume was 98,000 tons, an increase of 2.5%, with an average import price of HKD 85,800 per ton, up 20.5% [3] - **Cigarette Export Business**: Revenue was HKD 552 million, up 0.8%, with a gross margin of 25.7%, up 3.5 percentage points. Export volume was 1.019 billion sticks, down 7.9%, with an average selling price of HKD 0.54 per stick, up 9.4% [4] - **Tobacco Leaf Export Business**: Revenue reached HKD 1.156 billion, up 25.9%, with a gross margin of 5.5%, up 2.4 percentage points. Export volume was 38,000 tons, up 12.7%, with an average export price of HKD 30,000 per ton, up 11.7% [4] - **Brazil Operations**: Revenue was HKD 195 million, down 50.3%, with a gross margin of 27.4%, up 10.2 percentage points. Sales volume was 8,000 tons, down 34.8%, with an average selling price of HKD 24,600 per ton, down 23.8% [4] - **New Tobacco Products Export Business**: Revenue was HKD 15 million, down 66.5%, with a gross margin of 5.3%, up 0.6 percentage points. Export volume was 81 million sticks, down 65.4%, with an average selling price of HKD 0.18 per stick, down 3.1% [5] Future Outlook - The company plans to enhance its tobacco leaf resource supply and demand matching capabilities and improve its quality tobacco raw material guarantee system [3] - The company will continue to focus on building its capital operation platform and actively seek investment and acquisition opportunities that align with its strategic development [5][6] Earnings Forecast - Projected revenues for 2025-2027 are HKD 15.35 billion, HKD 16.41 billion, and HKD 17.46 billion, representing year-on-year growth of 17.4%, 6.9%, and 6.5% respectively. Net profits are expected to be HKD 954 million, HKD 1.034 billion, and HKD 1.11 billion, with growth rates of 11.8%, 8.4%, and 7.3% respectively [6]

Summary of China Tobacco Hong Kong Conference Call Company Overview - **Company**: China Tobacco Hong Kong - **Industry**: Tobacco Key Financial Performance - **2024 Revenue**: HKD 131 billion, a year-on-year increase of 10.5% [4] - **Net Profit**: HKD 8.54 billion, a year-on-year increase of 42.6% [4] - **Gross Margin**: 10.5%, an increase of 1.3 percentage points year-on-year [4] - **Net Margin**: 6.9%, an increase of 1.1 percentage points year-on-year [4] - **Five-Year CAGR**: Revenue growth at 7.8% and net profit growth at 21.8% from 2019 to 2024 [2][4] Revenue Sources - **Main Revenue Source**: Leaf import business accounts for 63% of total revenue and 60% of gross profit [2][6] - **Other Revenue Contributions**: - Cigarette export: 12% of revenue, 20% of gross profit [6] - Brazilian operations: 8% of revenue, 13% of gross profit [6] - Leaf export: 16% of revenue, 6% of gross profit [6] - New tobacco products export: 1% of revenue, 0.5% of gross profit [6][7] Business Segments - **Raw Material Business**: Includes leaf imports, exports, and Brazilian operations [5] - **Finished Products Business**: Includes cigarette exports and new tobacco products exports [5] Growth Drivers - **High-End Leaf Demand**: The trend towards high-end cigarettes in China drives demand for quality overseas tobacco leaves, which is a key growth factor for the leaf import business [2][8] - **Acquisition Impact**: The acquisition of a Brazilian subsidiary has improved gross margins and allowed for market-driven operations, with over 30% of products sold internationally [2][9] Export Strategies - **Cigarette Exports**: Focused on duty-free shops with exclusive rights in several regions, optimizing channels through a new-old segmentation strategy [13] - **New Tobacco Products**: Despite low revenue contribution, there is potential for recovery through product innovation and enhanced product strength [14] Future Outlook - **2025 Earnings Projection**: Expected to be approximately HKD 950 million, with a price-to-earnings ratio of about 27 times [3][15] - **M&A Strategy**: Future acquisitions will focus on overseas assets from the parent company, other subsidiaries, and high-quality assets globally [16][17] Challenges and Risks - **Regulatory Changes**: New market regulations and geopolitical conflicts have impacted the revenue from new tobacco products [14] Conclusion - **Strategic Position**: China Tobacco Hong Kong maintains a strong strategic position with significant growth potential through existing operations and future acquisitions [3][15][17]

Investment Rating - The investment rating for the company is "Buy" with a target price not specified [4][13]. Core Viewpoints - The company reported a revenue of HKD 10.316 billion for the first half of 2025, representing a year-on-year increase of 18.5%, and a net profit of HKD 706 million, up 9.8% year-on-year. The interim dividend per share was HKD 0.19, an increase of 26.7% year-on-year [1][3]. - The tobacco leaf import and export business benefited from rising tobacco leaf prices, while the self-operated proportion of the cigarette business continued to increase. The company is positioned as the exclusive operator for international business expansion and related trade for China National Tobacco Corporation, which is expected to continue driving high-quality growth [1][2]. - The company has a unique operating model with strong cash flow and bargaining power, backed by China National Tobacco Group. It is anticipated to benefit from overseas expansion and potential acquisitions in the future [2][3]. Summary by Relevant Sections Financial Performance - For the first half of 2025, the tobacco leaf export business generated revenue of HKD 1.156 billion, up 25.9% year-on-year, accounting for 11.2% of total revenue. The gross margin was 5.5%, an increase of 2.4 percentage points [8]. - The tobacco leaf import business achieved revenue of HKD 8.399 billion, a 23.5% increase year-on-year, making up 81.4% of total revenue, with a gross margin of 8.2%, down 2.8 percentage points [8]. - The cigarette export business reported revenue of HKD 552 million, a slight increase of 0.8% year-on-year, with a gross margin of 25.7%, up 3.5 percentage points [8]. - The new tobacco products export business saw a significant decline in revenue, down 66.5% year-on-year to HKD 15 million, accounting for 0.1% of total revenue [8]. - The Brazilian operations generated revenue of HKD 195 million, down 50.3% year-on-year, with a gross margin of 27.4%, up 10.2 percentage points [8]. Business Model and Competitive Advantage - The company holds a rare exclusive operating right for international tobacco business, which is expected to provide continued benefits from overseas expansion and mergers and acquisitions [2][3]. - The business model is characterized by strong cash flow and high bargaining power, supported by a stable revenue growth trend due to existing pricing policies [2][3].