Core Viewpoint - The company reported a solid revenue growth in H1 2025, driven by significant increases in the unit price of tobacco leaf imports and exports, despite challenges in the new tobacco products segment [1][2]. Revenue Analysis - H1 2025 revenue reached 1.0316 billion HKD, a year-on-year increase of 18.52%, while net profit attributable to shareholders was 706 million HKD, up 9.79% [1]. - Tobacco leaf import revenue grew by 23.47% to 839.9 million HKD, with sales volume and unit price increasing by 2.5% and 20.50% respectively [1]. - Tobacco leaf export revenue rose by 25.92% to 115.6 million HKD, with sales volume and unit price increasing by 12.7% and 11.66% respectively [1]. - Cigarette export revenue slightly increased by 0.81% to 55.2 million HKD, despite a decline in sales volume by 7.9% [1]. - New tobacco products export revenue plummeted by 66.45% to 1.5 million HKD, with both sales volume and unit price declining significantly [1]. Profitability Analysis - The company's gross margin and net margin for H1 2025 were 9.17% and 7.00%, down by 1.91 and 0.81 percentage points year-on-year [3]. - The gross margins for tobacco leaf import, export, cigarette export, new tobacco products export, and Brazilian operations were 8.18%, 5.46%, 25.70%, 5.48%, and 27.44% respectively, with varying changes year-on-year [3]. - The decline in overall gross margin was attributed to changes in business structure, with the revenue share of lower-margin tobacco leaf imports increasing [3]. Strategic Outlook - The company is expected to continue enhancing its internal business profitability through product mix optimization and increasing self-operated business share, which is anticipated to drive gross margin improvements [4]. - A recent exclusive distribution agreement with Sichuan Zhongyan for "Great Wall" brand cigars indicates the company's commitment to leveraging unique market opportunities [4]. - The company aims for both organic growth and external expansion, focusing on supply chain management and resource allocation to mitigate industry supply-demand fluctuations [4]. Earnings Forecast - The company projects EPS for 2025, 2026, and 2027 to be 1.37, 1.53, and 1.75 HKD respectively, with corresponding PE ratios of 26, 23, and 20 times [4].