CICC: Maintains "Neutral" rating on CTIHK (06055), raises target price to HK$31.5

CICC released a research report stating that it maintained a "neutral" rating on CTIHK (06055), with a 13% increase in the target price to 31.5 Hong Kong dollars, corresponding to a 23/22 times P/E ratio for 2025/26. Considering the improving profitability of the cigarette export business, the 2025 net profit forecast was raised by 11% to 940 million Hong Kong dollars, and the 2026 net profit forecast was introduced at 1.01 billion Hong Kong dollars. Key points from CICC: - The 2024 net profit exceeded performance forecast, higher than the bank's expectations. - The company announced that its revenue for 2024 reached 13.07 billion Hong Kong dollars, a year-on-year increase of 10.5%, and the net profit attributable to shareholders reached 850 million Hong Kong dollars, a year-on-year increase of 42.6%. The net profit exceeded the performance forecast and the bank's expectations, mainly due to the improvement in gross profit margin of cigarette exports and tobacco exports. - Development trends: 1) Tobacco leaf exports and cigarette exports drove steady growth in revenue in the second half of 2024, while tobacco leaf imports were under short-term pressure. 2) Profitability of cigarette exports and tobacco leaf exports improved, driving continued improvement in profitability in the second half of 2024. - Positive outlook for tobacco resilient demand, with the company's unique value as China Tobacco's exclusive capital market operations and international business expansion platform, and the synergistic momentum of medium and long-term "internal + external" development. Risks: Trade friction, exchange rate risks; risks of downturn in tobacco consumption.