Shares of Huabao International (00336) climbed more than 5% in Hong Kong trading, last up 5.52% at HK$3.73 with turnover reaching HK$39.36 million. The rally comes as the mandatory national standard for heated tobacco products (HNB) moves closer to implementation, opening up fresh growth prospects for the sector.

On July 28, the draft mandatory national standard for heated cigarettes was released for public consultation, with the feedback period running until September 26 and the standard expected to take effect six months after its official publication. Shenwan Hongyuan noted that the public consultation phase signals steady progress in establishing a regulated entry framework for the domestic HNB market, drawing attention to stocks across the new tobacco product supply chain.

Previously, China International Capital Corporation highlighted that the company's core competitive moat lies in its supply chain management capabilities spanning the entire value chain from raw materials through processing to quality control. With overseas expansion of flavor bead products, capacity release in film production, and optimization of seasoning distribution channels, the company is positioned to drive profitability recovery.

The company maintains strong cash flow and a highly resilient dividend policy. In August this year, it introduced its first equity incentive plan, setting targets for revenue growth of no less than 10%, 20%, and 30% in 2026, 2027, and 2028 respectively compared to 2025 levels, underscoring management's confidence in future growth.