Tianfeng Securities released a research report stating that according to the “buy” rating for China Tobacco Hong Kong (06055), the 2024/25/26 revenue is expected to be HK$136.36/152.77/HK$17.197 billion and net profit of HK$695/7.78/HK$913 million. The company is the exclusive international business platform for the China Tobacco system, with a target price of HK$17.2. The bank believes that the company relies on the China Tobacco Group and has significant barriers. It is currently the exclusive international business platform under China Tobacco. It is scarce, and is expected to be a direct beneficiary of the development and transformation of China's tobacco industry.
According to the report, China's tobacco production and trade volume are unequal, and there is still plenty of potential for tobacco international trade. In 2020-2022, China's exports of tobacco and its products account for only about 10% of total production, which does not match China's status as a major tobacco producer. In April 2015, China began promoting the “Belt and Road” initiative. It is the longest economic cooperation belt in the world with great potential for development. It also brings promising development opportunities to China's tobacco international trade. The company is expected to benefit from the continuous development of China's tobacco international trade.
According to Euromonitor data, the global market for new tobacco products is estimated to be US$124.29 billion in 2025, with a CAGR of 17.4% in 2018-2025. Major Chinese tobacco companies are beginning to see results in their HNB layout, and exports of HNB products are growing rapidly. China's export sales volume of heated non-combustible tobacco products in 2023 was 616.99 tons, up 22.02% year on year, and sales revenue was 105 million yuan, up 15.38% year on year. The company is an exclusive operating entity designated by China Tobacco Corporation to operate the export business of new tobacco products overseas, and the sales scale of new tobacco products is expected to continue to expand.