Investment Rating - The report maintains a "Buy" rating for the company 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 - The company achieved a revenue of HKD 13,074.2 million, 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 report forecasts 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 Breakdown - The tobacco leaf import business showed steady growth, with a revenue of HKD 8.254 billion in 2024, up 2.2% year-on-year, and a gross profit of HKD 826 million, reflecting a 12.7% increase. The gross margin improved to 10.0%, up 0.9 percentage points year-on-year [2]. - The cigarette export segment saw a revenue of HKD 1.574 billion, a 30.2% increase, with gross profit rising by 69.1% to HKD 277 million, resulting in a gross margin of 17.6%, up 4.0 percentage points year-on-year [3]. - The export of tobacco leaf products generated HKD 2.062 billion in revenue, a 24.8% increase, with gross profit soaring by 85.8% to HKD 84 million, leading to a gross margin of 4.1%, up 1.4 percentage points year-on-year [3]. - The new tobacco products export business recorded revenue of HKD 135 million, a 4.0% increase, with gross profit of HKD 7 million, up 23.2%, and a gross margin of 5.2%, an increase of 0.8 percentage points [4]. Financial Projections - The company is expected to maintain a stable growth trajectory, with projected revenues of HKD 13.14 billion in 2025, HKD 13.671 billion in 2026, and HKD 14.155 billion in 2027, reflecting growth rates of 0.5%, 4.0%, and 3.5% respectively [11][13]. - The net profit is projected to grow to HKD 960 million in 2025, HKD 1.021 billion in 2026, and HKD 1.076 billion in 2027, with growth rates of 6.4%, 6.3%, and 5.4% respectively [11][13]. Valuation Analysis - The report employs comparable company analysis and DCF methods for valuation, concluding a target price of HKD 29.2 based on a 22x PE ratio for 2025, with a forecasted EPS of HKD 1.32 [14]. - The DCF valuation estimates a reasonable market value of HKD 20.607 billion, corresponding to a price of HKD 29.4 [14].
中烟香港：净利率持续提升-20250311