Shares in China Tobacco International (HK), a unit of state-owned China National Tobacco Corporation, have risen by 307 per cent since their initial public offering in Hong Kong last month, making the stock the best performer among 74 listings in the city this year. China Tobacco stands out as the sole importer and exporter of tobacco leaves and cigarettes, respectively, in mainland China, the world’s biggest tobacco market. “China has the world’s biggest population of smokers and that supports a stable and huge market for tobacco-related products,” said Hua Xiaowei, an analyst at CSC Financial. “China Tobacco has a supreme industry position, without any rivals in the business area where it operates. As China’s exclusive importer and exporter, China Tobacco has very strong power over pricing.” China had 306 million smokers in 2018 and cigarette sales reached 1.44 trillion yuan (US$210 billion), accounting for 45 per cent of the global market, according to market-research firm Frost & Sullivan. Procuring tobacco leaves from overseas, then selling these to domestic cigarette makers at a margin made up 62 per cent of the company’s revenue last year, according to its sales prospectus. And while its brands, such as Chunghwa and Yuxi, dominate the Chinese market, it also benefits from an increasing number of outbound travellers, who have a chance to buy Chinese-made cigarettes for lower prices at duty-free shops at home and abroad. The company was ranked first in the duty-free cigarettes markets of Hong Kong, Macau, Thailand and Singapore, with a market share of 38 per cent, in 2018, according to Frost & Sullivan. Overseas unit of China’s cigarette monopoly lights up after lacklustre trading debut China Tobacco raised HK$813 million (US$104.2 million) from its listing after pricing its stock at the top end of the range, at HK$4.88. The offer was oversubscribed by 102 times by retail investors. Shares in the company jumped 52 per cent to HK$19.86 at the close on Tuesday. Tianfeng Securities forecast the company will post per-share earnings of HK$0.4 for this year, translating a price-to-earnings ratio of 49.7 times. The ratio for the Hang Seng Index was 11.4 times. Net income for China Tobacco dropped 25 per cent from a year earlier to HK$261.8 million last year, according to its prospectus.