Monopoly money

4 February 2019 By Christopher Beddor Follow @cbeddor

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.

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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.

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