Investment Rating - The report maintains a "Buy" rating for the company with a target price of 16.1 HKD, indicating a potential upside of over 20% within the next six months [1]. Core Views - The company is expected to see significant growth in its performance, with a projected increase in profit attributable to owners of no less than 10% year-on-year for the first half of 2024, and revenue growth of at least 30% [1]. - The report highlights the positive outlook for the company's leaf import and export business, as well as its cigarette export business, which are both experiencing upward trends [1]. - The company benefits from a unique operational position as the exclusive international business platform for China National Tobacco Corporation, which is expected to continue to provide advantages in overseas expansion and mergers and acquisitions [1]. Summary by Relevant Sections Business Performance - The company is actively organizing suitable product sources and optimizing pricing strategies, leading to growth in revenue and gross profit from leaf product exports [1]. - The leaf import business has seen an increase in both volume and sales price due to seasonal fluctuations, contributing to revenue and gross profit growth [1]. - The cigarette export business has significantly increased revenue and gross profit, aided by the recovery of consumer traffic in duty-free shops post-pandemic [1]. Competitive Advantages - The company has a significant operational barrier due to its exclusive status under the tobacco monopoly system in China, which is rare and positions it well for future benefits from overseas expansion and integration [1]. - The company enjoys strong cash flow and pricing power, backed by the China Tobacco Group, with stable revenue growth and relatively low fluctuations in gross margins [1]. Financial Projections - Revenue projections for the company are estimated at 136.36 billion HKD, 152.77 billion HKD, and 171.97 billion HKD for the years 2024, 2025, and 2026 respectively, with net profits expected to be 6.95 billion HKD, 7.78 billion HKD, and 9.13 billion HKD [1].
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