Issue link: https://read.dmtmag.com/i/1547352
Tobacco Asia 51 www.nicotineusp.com sales@nicotineusp.com NICOTINE IN ITS PUREST FORM Indonesia is already part of that strategy. Huabao reported that a sepa- rate Indonesian production base with a 3,000-ton capacity has been ramping up production of reconstituted tobacco leaf for innovative tobacco products. Batch deliveries began in the first half of 2026, and Huabao said the produc- tion line has been operating at full capacity since the second half of the second quarter, with yields continuing to improve. The Broad Far transaction now adds HNB stick manufacturing to Hua- bao's Indonesian operations. The ownership structure behind the acquisition is more complex than the industrial logic suggests. Huabao International's chair, executive director, and controlling shareholder Zhu Linyao ultimately controls the sellers. Broad Far (Hong Kong) owns 99% of PT Broad Far Indonesia, while Broad Far Limited owns the remaining 1%. Shenzhen-listed Huabao Flavors & Fragrances is not acquiring PT Broad Far Indonesia. However, one of its wholly owned second-tier subsidiaries owns 21.43% of Broad Far (Hong Kong), the company selling the 99% interest. Huabao Flavors & Fragrances said the disposal is expected to increase its net profit by approximately RMB18.21 million. Its filing also confirms the US$13.2196 million consideration for the 99% interest. The Indonesian man- ufacturer generated US$7.53 million in revenue in 2024 and US$6.49 million in 2025. In the first six months of 2026, revenue reached US$4.37 million, with a profit after tax of US$177,000. As of June 30, PT Broad Far Indonesia had approximately US$11.84 million in total assets and US$11.51 million in liabilities, leaving net assets of about US$326,000. An independent market-based valuation placed the entire equity interest at approximately RMB93.06 million. Huabao agreed to pay ap- proximately RMB90 million for the equity interest. Broad Far has a broader next-generation nicotine portfolio that includes NUSO heated tobacco prod- ucts, NMATE tobacco heating devices, TLEEF heated herbal products, and Huabao is expanding beyond its traditional focus on tobacco ingredients and materials, including flavors, capsules, and reconstituted tobacco leaf. Credit: Huabao