Investment Rating - The investment rating for China Tobacco Hong Kong (6055.HK) is not explicitly stated in the provided content, but the report indicates a positive outlook on the company's performance and growth potential. Core Views - The report highlights that China Tobacco Hong Kong's revenue for the first half of 2025 reached HKD 10.316 billion, representing an 18.5% year-on-year increase, while the net profit attributable to shareholders was HKD 706 million, up 9.8% year-on-year. The gross margin was 9.2%, down 1.9 percentage points year-on-year, and the net profit margin was 6.9%, down 0.5 percentage points year-on-year [1][2]. Summary by Sections Revenue Performance - The revenue from tobacco leaf imports in H1 2025 was HKD 8.399 billion, a 23.5% increase year-on-year, with sales volume and average price increasing by 2.5% and 20.5% respectively. The gross margin for this segment was 8.2%, down 1.8 percentage points year-on-year. The overall performance remained stable despite fluctuations in tariffs between China and the US [1][2]. Export Performance - The revenue from tobacco leaf exports in H1 2025 was HKD 1.156 billion, a 25.9% increase year-on-year, with a gross margin of 5.5%, up 1.4 percentage points year-on-year. This strong performance was attributed to the company's active market expansion and customer acquisition, with sales volume increasing by 12.7% and average price rising by 11.7% [2]. Cigarette Export - The revenue from cigarette exports in H1 2025 was HKD 0.552 billion, a slight increase of 0.8% year-on-year. The sales volume decreased by 7.9%, while the average price increased by 9.4%, resulting in a gross margin of 25.7%, up 8.1 percentage points year-on-year. The report anticipates a strong recovery in H2 2025 due to increased efforts in expanding self-operated channels and new product launches [2]. New Tobacco Products - The revenue from new tobacco products in H1 2025 was HKD 0.015 billion, a significant decline of 66.5% year-on-year, primarily due to geopolitical conflicts affecting supply chains and changing overseas policies. A marginal recovery is expected in H2 2025 [3]. Brazil Operations - The revenue from operations in Brazil for H1 2025 was HKD 0.195 billion, down 50.3% year-on-year, with sales volume and average price decreasing by 34.8% and 23.8% respectively. The gross margin improved to 27.4%, up 9.9 percentage points year-on-year, due to a shift in product mix towards higher-margin products. A recovery is anticipated in H2 2025 as weather conditions normalize [3]. Profit Forecast - The report forecasts steady performance in the tobacco leaf import and export sectors, with expectations for marginal recovery in cigarette and new tobacco product exports. The company is positioned as the exclusive operational entity for international business expansion and related trade for China Tobacco, which may accelerate the acquisition of quality targets in the future. Projected net profits for 2025-2027 are HKD 1.02 billion, HKD 1.16 billion, and HKD 1.29 billion, respectively, with corresponding P/E ratios of 25.9X, 22.6X, and 20.4X [3].
中烟香港（06055）：业绩表现优异，期待外延、出海表现