Listing planned

The China National Tobacco Corp. (CNTC) plans to list its international unit, China Tobacco International (CTI), on the Hong Kong stock exchange, according to Bloomberg.

CTI, which procures leaf from countries such as Brazil and Canada, accounts for a minor portion of CNTC’s overall business, but industry observers said  the listing represents a rare opening up of the company as pressure increases on the government to curb smoking.

According to pre-listing documents, CTI recorded revenues of HKD5.1 billion (US$651.1 million) for the nine months ended in September 2018, down 21 percent year-year, while it had a gross profit margin of 5.8 percent, down from 6.5 percent a year earlier.

The unit derives revenue primarily from a fixed markup of 6 percent it applies to the overseas leaf tobacco supply when selling to domestic cigarette manufacturers. It also has full control of cigarette exports, sold primarily in duty-free locations overseas to Chinese tourists, and domestic-grown leaf tobacco.

In May 2018, it started exporting Chinese-made heat-not-burn devices.