Investment Rating - The investment rating for China Tobacco Hong Kong (06055) is "Buy" with a target price of 16.4 HKD, maintaining the rating as of August 28, 2024 [1]. Core Insights - The report highlights that China Tobacco Hong Kong achieved record performance in H1 2024, with revenue reaching 8.704 billion HKD, a year-on-year increase of 12.4%, and a net profit attributable to shareholders of 643 million HKD, up 40.8%, exceeding previous profit expectations [1]. - The company declared an interim dividend of 0.15 HKD per share for the first time [1]. - The report emphasizes the company's unique position as the only international business platform for China National Tobacco Corporation, which is expected to benefit from ongoing international expansion and potential mergers and acquisitions [1]. Summary by Sections Business Performance - The five major business segments of the company showed comprehensive growth, with notable performance in cigarette export business [1]. - Leaf export revenue in H1 2024 was 918 million HKD, up 23.0%, accounting for 10.5% of total revenue with a gross margin of 3.1% [1]. - Leaf import revenue reached 6.802 billion HKD, a 5.5% increase, representing 78.1% of total revenue with a gross margin of 10.9% [1]. - Cigarette export revenue was 547 million HKD, a significant increase of 127.9%, with a gross margin of 22.2% [1]. - New tobacco product export revenue was 44 million HKD, up 28.4%, contributing 0.5% to total revenue with a gross margin of 4.8% [1]. - Brazilian operations generated 393 million HKD in revenue, a 42.8% increase, with a gross margin of 17.2% [1]. Competitive Advantages - The company possesses a rare advantage as the exclusive operator of international tobacco business for China National Tobacco Corporation, which is expected to continue benefiting from overseas expansion and integration opportunities [1]. - The business model demonstrates strong cash flow and pricing power, supported by stable revenue growth and low volatility in gross margins [1]. - The report projects an upward revision of net profit forecasts for 2024, 2025, and 2026 to 766 million HKD, 885 million HKD, and 1.066 billion HKD respectively, reflecting the company's unique position and growth potential [1].
中烟香港：立足中烟唯一“国际业务平台”战略定位，24H1业绩再创新高