On August 27th, China Tobacco Hong Kong (06055.HK) released its interim performance report for 2024. During the period, the company's revenue reached 8.704 billion Hong Kong dollars, a 12% increase compared to the previous year; the company's attributable profit to equity holders reached 643 million Hong Kong dollars, a 41% increase year-on-year; and gross profit reached 964 million Hong Kong dollars, a 29% increase year-on-year.
- The export business of new tobacco products has seen an increase in operating income, reaching 43.5 million Hong Kong dollars, a 28% year-on-year growth, with gross profit increasing by 57%.
- Cigarette export business has grown rapidly, with operating income reaching 547.3 million Hong Kong dollars, a 128% year-on-year growth, and gross profit increasing by 223%.
- The import and export of tobacco leaf products have seen stable growth, with import business income increasing by 5% year-on-year, and export business operating income increasing by 23% year-on-year.
- Operating income from business operations in Brazil has increased by 43% year-on-year, with gross profit decreasing by 8%.
The report reveals:
The company's growth in the new tobacco product sector is mainly attributed to tapping into key market channels, increasing customer marketing efforts, resulting in increased demand for orders in key markets; as well as continuously expanding their product portfolio, optimizing product pricing strategies, and increasing the proportion of self-operated business.
The company stated that the significant growth in cigarette export business was due to the continuous optimization of product portfolio, increased investment in new products, expansion of self-operated business, leading to a substantial increase in revenue and gross profit from cigarette export business. Additionally, foot traffic in duty-free markets has been steadily recovering, leading to improved product turnover compared to the same period last year.
Due to seasonal fluctuations in tobacco leaf production and an increase in the selling price of tobacco products, Chinese tobacco company CNTC's tobacco import business in Hong Kong saw a slight growth. The growth in tobacco export business is beneficial for increasing demand in the international market and optimizing pricing strategies.
Despite a significant increase in operating income in Brazil, gross profit has actually decreased compared to the same period last year. The company stated that this is due to a significant increase in the proportion of finished cigarette sales with high selling prices but low gross margins, while the proportion of product sales with high gross margins but lower selling prices has decreased.
In addition, China Tobacco Hong Kong stated that in the second half of this year, they will continue to enhance the international visibility of new tobacco products, deepen cooperation between production and sales, and comprehensively promote innovation in new tobacco technology and product upgrades.
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