China cigarette IPO offers unfiltered Beijing bet

Universal

04/02/2019 02:55

(The author is a Reuters Breakingviews columnist. The opinions
expressed are his own.)
    By Christopher Beddor
    HONG KONG, Feb 4 (Reuters Breakingviews) - The overseas arm
of China Tobacco will list in Hong Kong. Sales abroad are
growing. But most of its revenue comes from importing leaves for
its parent, a monopoly in a country where 300 million people
light up. That's a lot of risky exposure to dated anti-smoking
policies.
    Full view will be published shortly.
    On Twitter https://twitter.com/cbeddor
    
    CONTEXT NEWS
    - China Tobacco International, a subsidiary of the
state-owned cigarette giant China National Tobacco, filed for an
initial public offering in Hong Kong, according to pre-listing
documents issued on Jan. 2. The overseas unit buys tobacco leaf
products abroad for sale to Chinese manufacturers. It also has a
monopoly on the country’s cigarette exports business, mostly for
sale in duty-free shops catering to Chinese tourists abroad. 
    - The listing will raise about $100 million, Reuters
reported on Jan. 2, citing a source. It did not specify pricing
details. The company says it plans to use the capital to
purchase new cigarette brands and expand its presence in
Southeast Asia, among other things. 
    -  For previous columns by the author, Reuters customers can
click on  BEDDOR/ 
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Draft prospectus:    http://www.hkexnews.hk/app/SEHK/2018/2018122802/Documents/SEHK201812310023.pdf
Overseas unit of China's cigarette monopoly files for Hong Kong
IPO     urn:newsml:reuters.com:*:nL8N1Z20UQ
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 (Editing by Clara Ferreira Marques and Katrina Hamlin)
 ((christopher.beddor@thomsonreuters.com; Reuters Messaging:
christopher.beddor.thomsonreuters.com@reuters.net))