Jinwu Financial News | According to Guotai Junan Research, China Tobacco Hong Kong (06055) issued a positive profit forecast. The net profit growth rate is expected to be no less than 30% in 2024. The growth rate is in line with expectations. The increase in profit is mainly due to deepening existing business and developing new businesses. The annual profit growth rate is slower than in the first half of the year (+41% compared to 24H1), mainly due to shipping pace issues. The bank expects the revenue side to continue to grow steadily in the second half of the year, and the net interest rate for the whole year is expected to increase further compared to 2023.
The bank continued that China Tobacco Group's position on China Tobacco Hong Kong is capital market operation and international business expansion, and the company is expected to integrate China Tobacco resources as a listing platform. The company's merger and acquisition of China Tobacco Brazil in 2021 will enhance the latter's profits through various aspects such as management, production, sales, and governance. Subsequent mergers and acquisitions will bring additional performance flexibility to the company. On this basis, management empowerment is expected to have a synergistic effect.
The bank said that according to the performance forecast, the 2024 EPS will be raised to HK$1.13 (previous value of HK$1.11), and the 2025-2026 EPS will be maintained at HK$1.30 and HK$1.52. Refer to the valuations of comparable overseas companies, maintain the target price of HK$32.4, corresponding to PE25X in 2025, and maintain an increase in holdings rating.
