Investment Rating - The report assigns a "Buy" rating to the company with a target price of HKD 32.20, based on a projected PE of 23X for 2025 [4]. Core Viewpoints - The company is positioned as a capital operation platform for China National Tobacco Corporation, supporting its international development. The revenue and net profit for 2023 reached HKD 11.84 billion and HKD 600 million, respectively, with a CAGR of 7.2% and 17.0% from 2019 to 2023 [1][15]. - The company benefits from exclusive operating rights in tobacco import and export, which provides a stable performance foundation. The core business of tobacco leaf import and export is expected to see growth in both volume and price [1][25]. - The company has shown significant growth in its cigarette export business, with a revenue increase of 875.8% in 2023, driven by the recovery of inbound and outbound passenger flow [2][74]. Summary by Sections Company Overview - The company is controlled by China National Tobacco Corporation and has a stable performance foundation due to its exclusive operating rights. It has diversified operations including tobacco leaf import and export, cigarette export, and new tobacco products [15][18]. - The company has shown a recovery in performance post-public health events, with 2024H1 revenue and net profit increasing by 12.4% and 40.8%, respectively [15][1]. Tobacco Leaf Import and Export - The tobacco leaf import business is the main revenue driver, accounting for 78.2% of total revenue in 2024H1, with a year-on-year growth of 5.5% [1][25]. - The export business is also showing promise, with a 23% increase in revenue in 2024H1, supported by a stable supply and expanding demand in Europe [1][25]. Cigarette Export Business - The cigarette export business has experienced a remarkable recovery, with revenues increasing significantly due to the restoration of passenger flow and market expansion [2][74]. - The company is optimizing its product mix and increasing the proportion of direct sales, which is expected to enhance profitability [2][74]. New Tobacco Products - The new tobacco product segment, particularly heated not-burn (HNB) products, is in a growth phase, with a CAGR of 48% from 2019 to 2023 [3][15]. - The company is expected to increase its market share through product enhancements and regional expansion [3][15]. Financial Projections - The company’s EPS is projected to be HKD 1.15, 1.40, and 1.66 for 2024, 2025, and 2026, respectively, with a current PE ratio of 18X, 15X, and 12X for the same years [4][6].
中烟香港：中烟启航出海，把握“稀缺&确定”成长机遇