Each sub-edition (micro-signal: nbdnews) noted that the previous results of CITICs Hong Kong offering showed that the shares were over-subscribed 102 times and the offering price was HK$488 per share. At this price, net proceeds amounted to HK$735 million. Such a high over-subscription shows the markets pursuit of the company.
The prospectus shows that China Tobacco Hong Kong was established in 2004 and is the designated offshore platform of China Tobacco International for capital operation and international business development. China Tobacco International is a wholly-owned subsidiary of China National Tobacco Corporation. It undertakes the management and operation of China National Tobacco Corporation by organizing trade in the tobacco industry, supervising the operation of overseas affiliated companies and overseas investment of China National Tobacco Corporation.
Specifically, CITIC Hong Kong operates the following four major businesses:
The second is the export of tobacco products. The company exclusively manages the export of tobacco products to Indonesia, Thailand, Singapore and other countries and regions.
The third is the export of cigarettes. The company exclusively exports Chinese brand cigarettes to duty-free stores and wholesalers. Yuxi, Yunyan, Hongtashan, China and Liqun are the main brands.
The fourth is the export of new tobacco products, such as heating non-burning tobacco products.
In Hong Kong, there are only 28 employees, including 5 senior managers, 12 business operators, 3 human resources, 4 financials, 2 strategic investment, 1 compliance and risk management, and 1 securities and investor relationship. The total cost of these employees is about HK$25.914 million.
Net profit margin decreases year by year
Despite the exclusive right to import and export tobacco products, the figures reflected in the earnings reports of CITIC Hong Kong are not so good.
For example, the main net profit margin of CITIC Hong Kong is on the downward trend, which is 6.60% in 2016, 5.51% in 2017 and 4.62% in 2018. In response, China Tobacco International explained that the company relied heavily on its relationship with China Tobacco Corporation. All sales counterparties in import business and procurement counterparties in export business must be entities of China Tobacco Corporation. The purchase and sale of companies and related parties should follow the government pricing system stipulated in relevant documents.
China Tobacco International also said, We are very dependent on the national monopoly system. Any substantial change or abolition of this system will have a substantial adverse impact on our business operations.
According to the annual report data of A-share listed companies in 2018, there are five companies whose net profit is over 100 billion yuan. They are Industrial and Commercial Bank, Construction Bank, Agricultural Bank, Bank of China and Ping An of China. The total net profit of these five companies in 2018 is 1.04 trillion yuan, that is to say, the profit and tax revenue paid by China Tobacco in one year exceeds the net profit of these five companies in one year. The sum.
Data source: Tonghuashun I asked for money (Note: Chinas tobacco tax data for profit, financial companies in the table for net profit)
Every editor understands that in the prospectus, CITIC Hong Kong stated that the ultimate goal of the listing in Hong Kong is to establish a platform for capital operation and international business development. With the support of China Tobacco Group, the company hopes to gradually centralize and integrate all kinds of overseas resources (sales channels, cigarette brands, sustainable and adequate supply of tobacco products and human resources) of China Tobacco Group, and then become a globally competitive tobacco company.
At the 12th listing ceremony, Zhao Jianmin, general manager of China Tobacco Hong Kong, said that the successful listing of China Tobacco in Hong Kong means that China Tobacco has taken a solid step towards overseas development and opened up more financing channels.