Investment Rating - The report maintains a "Buy" rating for China Tobacco Hong Kong with a target price raised to HKD 29.2, indicating a potential upside of 19% from the current stock price of HKD 24.85 [1][5][7]. Core Insights - China Tobacco Hong Kong reported a revenue of HKD 13,074.2 million for the year, representing a year-on-year growth of 10.5%, and a net profit of HKD 902.8 million, which is a 30.4% increase compared to the previous year [1][5]. - The company expects net profits for the years 2025, 2026, and 2027 to be HKD 9.6 billion, HKD 10.2 billion, and HKD 10.8 billion respectively, with corresponding EPS of HKD 1.32, HKD 1.40, and HKD 1.48 [1][5]. Revenue and Profit Analysis - The tobacco leaf import business showed steady growth, achieving a revenue of HKD 8.254 billion in 2024, up 2.2% year-on-year, with a gross profit of HKD 826 million, reflecting a 12.7% increase [2]. - The gross margin for tobacco leaf imports was 10.0%, an increase of 0.9 percentage points year-on-year, primarily due to a higher proportion of higher-margin Brazilian business [2]. - The cigarette export segment saw a revenue of HKD 1.574 billion in 2024, a 30.2% increase, with a gross profit of HKD 277 million, marking a 69.1% rise [3]. - The gross margin for cigarette exports improved to 17.6%, up 4.0 percentage points year-on-year, benefiting from a higher proportion of self-operated channels [3]. Product Segmentation - The export of tobacco leaf products generated HKD 2.062 billion in revenue, a 24.8% increase, with a gross profit of HKD 84 million, up 85.8% [3]. - New tobacco product exports achieved a revenue of HKD 135 million, a 4.0% increase, with a gross profit of HKD 7 million, reflecting a 23.2% growth [4]. - The Brazilian business segment reported a revenue of HKD 1.050 billion, a 37.0% increase, with a gross profit of HKD 184 million, up 30.2% [4]. Dividend and Shareholder Information - The company declared a final dividend of HKD 0.31 per share, with a total annual dividend of HKD 0.46 per share, resulting in a payout ratio of 37% and a dividend yield of 1.9% based on the current stock price [4][5]. Financial Projections - The report projects revenue growth rates of 0.5%, 4.0%, and 3.5% for the years 2025, 2026, and 2027 respectively, with net profit growth rates of 6.4%, 6.3%, and 5.4% for the same periods [11][13]. - The estimated gross margin is expected to improve gradually, reaching 11.57% by 2027 [11][13].
中烟香港（06055）：净利率持续提升