On December 20th, China Tobacco Hong Kong (06055.HK) released its positive profit announcement for the full year of 2023. According to the announcement, it is expected that China Tobacco Hong Kong and its subsidiary companies (hereinafter referred to as the “Group”) will record a revenue increase of no less than 45% for the annual period ending on December 31st, 2023, and a profit increase attributable to the company’s owners of no less than 50%.
The announcement highlights three main factors contributing to the growth in the group’s performance. Firstly, the delayed shipments of tobacco leaves due to the impact of the pandemic have gradually arrived throughout the year. Coupled with an increase in overall selling price compared to last year, this has led to growth in the group’s revenue and gross profit from the importation of tobacco products this year. Secondly, the number of cross-border tourists has gradually increased as global pandemic control measures have been relaxed, leading to a significant growth in cigarette exports as consumption in the group’s duty-free shops within the operating region has recovered. Additionally, the disruption in the shipping schedule has resulted in a substantial increase in sales of high-gross-margin tobacco by-products compared to the previous year, leading to significant growth in the group’s revenue and gross profit from its operations in Brazil.
As the only tobacco-based company under China Tobacco Corporation, China Tobacco Hong Kong has always adhered to its strategic positioning as a “capital operation platform” and an “international business expansion platform”. The group’s performance has maintained steady and robust growth, with strong financial indicators and an increasing trend in dividend distribution. It is believed that the group will continue to actively seize market opportunities, adhere to the dual-drive development strategy of external expansion and internal growth, and create more value for shareholders in the future.
