Investment Rating - The report maintains a positive outlook on Simer International (6969 HK) with a focus on its potential in the HNB (Heat-Not-Burn) market and its role as a key supplier to major tobacco companies [1] Core Views - The HNB market is expected to grow significantly with a projected market size of 32 billion USD in 2023 and a growth rate of 12% [2] - HNB products have high consumer stickiness and conversion rates with PMI reporting a conversion rate of over 70% [3] - Major tobacco companies like PMI BAT and JTI are aggressively expanding their HNB product lines with PMI aiming for over 2/3 of its revenue from smoke-free products by 2030 [4] - Simer International is expected to play a crucial role in BAT's HNB supply chain leveraging its technological expertise and patent-sharing agreements [5] - The Hilo product by Simer International shows strong product competitiveness with improvements in weight heating speed and overall smoking experience [7] - The Hilo product is projected to achieve significant sales with potential sales of millions of devices and billions of cartridges [8] - Revenue and profit contributions from Hilo are expected to be more pronounced in 2026 with both devices and cartridges contributing significantly [9] - The vaping market is expected to recover with stricter FDA regulations favoring compliant brands like Vuse and Njoy which are supplied by Simer International [10] - Simer International's valuation is justified by its strong position in the HNB market which has higher long-term potential compared to the vaping market [11] Market and Industry Analysis - The HNB market is characterized by high entry barriers and a competitive landscape dominated by a few major players [3] - The global tobacco industry is shifting towards smoke-free products with significant investments and strategic plans by major companies [4] - The US market is expected to be a key growth driver for HNB products with PMTA approvals and market entry strategies being critical [2][8] - The vaping market is undergoing regulatory changes with a focus on compliance and market consolidation [10] Financial Projections - Simer International's revenue is projected to grow from 11 168 million CNY in 2023 to 16 606 million CNY in 2026 with a CAGR of 14% [15] - Net profit attributable to shareholders is expected to increase from 1 645 million CNY in 2023 to 2 551 million CNY in 2026 [15] - The company's PE ratio is expected to decrease from 54 4X in 2024 to 28 6X in 2026 reflecting improved profitability [13] Key Observations - Key factors to monitor include the entry into the Japanese and Korean markets the pace of European market development and the progress of PMTA approvals in the US [12] - The company's financial health remains strong with a solid balance sheet and improving profitability metrics [15][17]

电子 ——股权激励计划目标积极，换弹式修复，HNB 弹性可 期！ 证券的投资评级： 以报告日后的 6 个月内，证券相对于市场基准指数的涨跌幅为标准，定义如下： 买入（Buy） ：相对强于市场表现 20％以上； 增持（Outperform） ：相对强于市场表现 5％～20％； 中性（Neutral） ：相对市场表现在－5％～＋5％之间波动； 减持（Underperform） ：相对弱于市场表现 5％以下。 行业的投资评级： 以报告日后的 6 个月内，行业相对于市场基准指数的涨跌幅为标准，定义如下： 看好（Overweight） ：行业超越整体市场表现； 中性（Neutral） ：行业与整体市场表现基本持平； 看淡 (Underweight） ：行业弱于整体市场表现。 我们在此提醒您，不同证券研究机构采用不同的评级术语及评级标准。我们采用的是相对评级体系，表示投资的相对比重建议； 投资者买入或者卖出证券的决定取决于个人的实际情况，比如当前的持仓结构以及其他需要考虑的因素。投资者应阅读整篇报 告，以获取比较完整的观点与信息，不应仅仅依靠投资评级来推断结论。申银万国使用自己的行业分类体系，如果您对我们的 行业分类有兴 ...

Investment Rating - The report assigns a **Buy** rating to the company, with a target price of **HKD 17.4**, representing a **32.9% upside** from the current price [8] Core Views - The company's **HNB (Heat-Not-Burn) business** has significant growth potential, particularly through its partnership with British American Tobacco (BAT) for the **Glo Hilo** product, which is expected to expand into key markets by 2025 [8] - The company's **revenue growth** is driven by its proprietary brand and enterprise client business, particularly in closed-system products, with **Q3 2024 revenue** increasing by **16.5% YoY** [8] - The company has set **aggressive market cap targets** linked to stock options, with performance milestones tied to achieving market caps of **HKD 300 billion, 400 billion, and 500 billion**, demonstrating confidence in long-term growth [8] Financial Performance - **Revenue** for 2024 is projected at **RMB 12.16 billion**, with a **YoY growth of 8.9%**, and is expected to reach **RMB 16.65 billion by 2026**, representing a **19.6% growth** [8] - **Net profit** for 2024 is forecasted at **RMB 1.35 billion**, with a **YoY decline of 17.7%**, but is expected to rebound to **RMB 2.53 billion by 2026**, reflecting a **36.3% growth** [8] - **EPS** for 2024 is estimated at **RMB 0.22**, with a **YoY decline of 17.7%**, but is projected to increase to **RMB 0.41 by 2026**, representing a **36.3% growth** [8] Operational Metrics - The company's **gross margin** is expected to improve from **37.8% in 2024** to **42.2% by 2026**, driven by operational efficiencies and product mix optimization [2] - **R&D expenses** as a percentage of revenue are projected to remain stable at **13.8%** from 2025 onwards, reflecting continued investment in innovation [2] - **Inventory turnover days** are expected to decrease slightly from **43.20 days in 2024** to **42.69 days by 2026**, indicating improved inventory management [2] Valuation - The company is trading at a **2024E P/E of 56.2x**, which is expected to decline to **30.1x by 2026**, reflecting anticipated earnings growth [8] - The target price of **HKD 17.4** is based on a **40x P/E multiple for 2026**, suggesting significant upside potential [8] Industry Outlook - The **electronic cigarette industry** is poised for growth, with the company's **HNB products** expected to capture market share and drive profitability, particularly in partnership with BAT [8]

Investment Rating - The report maintains a "Buy" rating for Simer International (06969) with a target price of 13.1 HKD [1] Core Views - The company's revised equity incentive plan demonstrates confidence in long-term business development, with performance targets tied to market capitalization [1] - Simer International is expected to benefit from the growth potential of its HNB (Heat-Not-Burn) new business segment [1] - The company's partnership with British American Tobacco (BAT) since 2018 positions it to capitalize on the market share growth of BAT's new Glo Hilo device [1] - Simer's proprietary brand business is experiencing rapid growth, while its closed-system product business is gradually recovering [1] - The company's first menthol-flavored e-cigarette has passed FDA review, and stricter FDA enforcement is expected to benefit leading brands like Simer [1] Business Performance - In Q3 2024, Simer International reported revenue of 3.286 billion CNY, a 14.1% YoY increase and 16.5% QoQ growth, driven by proprietary brand products and closed-system product revenue [1] - In H1 2024, the company's disposable product revenue decreased by 18.9% to 1.217 billion CNY, while proprietary brand revenue surged 71.9% to 1.116 billion CNY [1] - In Q2 2024, the company's US market pod system revenue grew 6.5% YoY and 6.1% QoQ [1] Product Development - BAT launched the new Glo Hilo device, weighing only 76g (16g lighter than the previous generation), with improved heating technology and extended session times [1] - The Glo Hilo Plus model features a two-part design weighing 92g, significantly lighter than the main competitor IQOS Iluma Prime (171g) [1] - The Glo Hilo series represents BAT's innovation in the Next Generation Product (NGP) field, aiming to close the gap with industry leader Philip Morris' IQOS [1] Regulatory Environment - As of July 18, 2024, the FDA has received nearly 27 million product applications, completing reviews for over 99% and approving 34 e-vapor products and devices, including 17 from Simer's clients [1] - The trend towards "tobacco-like management" in the US e-cigarette market is expected to benefit large brands with resources and technical capabilities to meet increasing regulatory requirements [1] Financial Projections - The report forecasts Simer International's net profit for 2024-2026 to be 1.609/1.966/2.494 billion CNY, representing YoY changes of -2.19%/+22.19%/+26.85% respectively [1] - The company's technological and leadership advantages are expected to drive industry consolidation as regulations tighten [1]

Investment Rating - The report assigns a "Buy" rating to the company with a target price of HKD 12.03 per share, based on a 35x PE valuation for 2025 [2][177] Core Views - The company's business is recovering from the bottom, with significant future growth potential. The issuance of stock options and high market capitalization targets demonstrate management's confidence [2] - The company has no direct comparable listed companies in Hong Kong. Historical valuations during high-growth periods (2020-2021) reached over 30x PE [2] - The company's reasonable value is estimated at HKD 12.03 per share based on a 35x PE valuation for 2025 [2] Market Overview - The global and US e-cigarette markets remain stable, with e-cigarettes accounting for approximately 7.8% of the US tobacco market. The US e-cigarette market is expected to grow at a CAGR of 16% from 2022 to 2031 [193] - The US disposable e-cigarette market share increased from 25% in 2020 to 52% in 2022, with non-tobacco and non-menthol flavors accounting for 80% of disposable e-cigarettes [194] - As of March 2024, only 34 FDA-authorized products accounted for 13.7% of total US retail store sales [195] Company Performance - The company's total share capital and market capitalization are 6,179.67 million shares and HKD 69,583 million, respectively [3] - The stock price has fluctuated between HKD 4.73 and HKD 15.18 over the past year, with a 30-day average trading volume of 11.66 million shares and turnover of HKD 128.81 million [3] - The stock price has declined by 12.71% over the past three months but increased by 27.51% over the past six months [3] Future Outlook - The company plans to grant 61 million stock options to the chairman at an exercise price of HKD 11.26, with market capitalization targets of HKD 300 billion, HKD 400 billion, and HKD 500 billion by 2025-2030 [2] - The company also plans to grant stock options or awards to core employees [2] - The company's revenue is expected to grow by 9.0%, 31.7%, and 28.9% in 2024-2026, with net profit growth of -18.0%, 44.9%, and 44.0% respectively [73] Industry Trends - The global HNB market continues to grow at a double-digit rate, with PMI, BAT, and Japan Tobacco accounting for 71.4%, 15.5%, and 4.3% of the global heated tobacco market share in 2022 [211] - PMI's heated tobacco unit sales increased by 13% YoY in Q1-Q3 2024, with strong growth in Europe and Japan [55] - BAT's new HNB product, glo Hilo, is expected to have significant growth potential with improved heating technology and taste experience [61]

Investment Rating - The report assigns a **Buy** rating to Simer International (6969 HK), indicating that the stock is expected to outperform the benchmark by more than 15% over the next 6 months [2] Core Views - Simer International has implemented a comprehensive incentive plan, including granting 61 million share options to the chairman with performance targets tied to market capitalization milestones of HKD 300 billion, 400 billion, and 500 billion by 2025-2030 [5] - The company is expected to benefit from the recovery of the compliant e-cigarette market in the US, with core client VUSE's Alto tobacco flavor PMTA approval and NJOY's menthol approval driving market share gains [5] - Simer International is well-positioned in the HNB (heat-not-burn) market, with a deep partnership with British American Tobacco and the potential to provide integrated product solutions for the Glo Hilo product [5] - The company's R&D efforts in areas such as HNB, medical, and beauty are starting to bear fruit, with several products in the pipeline and commercialization underway [5] Financial Performance - Revenue is expected to grow from HKD 11 168 million in 2023 to HKD 16 606 million in 2026, representing a CAGR of 14% [14] - Net profit attributable to shareholders is forecasted to increase from HKD 1 645 million in 2023 to HKD 2 551 million in 2026, with a significant acceleration in growth from 2025 onwards [14] - The company's gross margin is expected to recover from 38 81% in 2023 to 43 73% in 2026, driven by product mix optimization and scale effects [16] - R&D expenses as a percentage of revenue remain high at 15% in 2024H1, reflecting the company's continued investment in innovation [5] Industry Outlook - The global HNB device market reached USD 2 13 billion in 2023, with sales volume of 41 million units, representing year-on-year growth of 13 7% and 18 4% respectively [5] - The HNB market is expected to maintain a CAGR of 13% in sales and 10% in volume from 2023 to 2028, indicating a long growth runway for the industry [5] - Regulatory tightening in Europe has impacted the disposable e-cigarette segment, with H1 2024 revenue declining by 18 9% year-on-year [5] Valuation - The stock is trading at 48 8x, 41 9x, and 25 6x P/E for 2024, 2025, and 2026 respectively, based on the report's earnings forecasts [5] - The P/B ratio is expected to decline from 2 87x in 2024 to 2 43x in 2026, reflecting improving profitability and return on equity [14]

港股研究丨公司点评 公司基础数据 [Table_Report] •《思摩尔国际 2024Q3 点评：预计封闭式产品趋 势向好，APV 延续较优增长》2024-10-09 •《思摩尔国际 2024H1 点评：自主品牌高增，换 弹产品趋势向好，研发驱动长期成长》2024-08-21 •《思摩尔国际 2023A 点评：自主品牌延续亮眼增 长，多元发展和降本增效并进》2024-03-20 港股研究 | 公司点评 1、竞争对手技术实现重大突破：目前思摩尔在研发能力和技术储备上业内领先，若竞 争对手在技术上实现重大突破，或将对行业竞争格局造成影响。 投资评级说明 我们无法给出明确的投资评级。 港股研究 | 公司点评 法律主体声明 其他声明 本报告所载的资料、意见及推测仅反映本公司于发布本报告当日的判断，本报告所指的证券或投资标的的价格、价值及投资收 入可升可跌，过往表现不应作为日后的表现依据；在不同时期，本公司可以发出其他与本报告所载信息不一致及有不同结论的报告； 本报告所反映研究人员的不同观点、见解及分析方法，并不代表本公司或其他附属机构的立场；本公司不保证本报告所含信息保持 在最新状态。同时，本公司对本报告所含信息可 ...

Investment Rating - Buy (Maintained) [5] Core Views - The new generation Glo Hilo product shows significant improvements in performance and user experience compared to both the market-leading IQOS iluma i and its previous generation, with expectations of market expansion and volume growth by 2025-2026 [3] - The company has actively responded to regulatory changes in the European market by launching compliant solutions such as TANKER and QUAD SHOT Pro, which are expected to capture elastic demand post-regulatory tightening [7] - The report forecasts revenue growth of 8%, 11%, and 21% for 2024-2026, with net profit attributable to the parent company expected to grow by 36% in both 2025 and 2026 [24] Product Comparison - Glo Hilo Plus is more compact and lightweight (92g) compared to IQOS iluma i (146g), offering better portability and grip [17] - Glo Hilo charges faster, reaching 80% in 40 minutes, while IQOS iluma takes 90-135 minutes for a full charge [17] - The new Glo Hilo features improved heating technology, shorter preheating time, and extended session duration, supporting 5 minutes 10 seconds in standard mode and 3 minutes 40 seconds in boost mode [21] Market and Regulatory Trends - The HNB market is growing steadily, with IQOS maintaining a 71% market share in 2023, while Glo holds 15.6%, indicating significant room for growth [36] - Regulatory changes in Europe and Australia are tightening restrictions on disposable e-cigarettes, while the FDA in the US is increasing enforcement against illegal e-cigarette products [19] Financial Performance - Revenue is projected to reach RMB 120.67 billion, RMB 134.46 billion, and RMB 162.63 billion in 2024-2026, with year-on-year growth of 8%, 11%, and 21% respectively [24] - Net profit attributable to the parent company is expected to be RMB 13.28 billion, RMB 18.13 billion, and RMB 24.62 billion in 2024-2026, with growth rates of -19%, 36%, and 36% respectively [24] - The company's P/E ratio for 2024-2026 is projected at 47.88X, 35.08X, and 25.83X [24] Product Innovation - The company has introduced new solutions like FEELM PRO, which uses ultra-thin high-performance technology for better vaporization performance [22] - Glo Hilo's new heating technology enhances flavor intensity and consistency, addressing consumer preferences [7]

Investment Rating - The report maintains a "Buy" rating for Smoore International with a target price of HKD 13.35, based on a 2025 PE of 48x [1] Core Investment Thesis - Smoore International has experienced a "double whammy" since 2021 due to regulatory headwinds in China and illegal product competition overseas, leading to declining EPS and profitability [1][5] - The company's core advantages remain strong, including leading R&D capabilities, deep customer relationships, and PMTA-approved products in the US [1][6] - Regulatory headwinds in the US and Europe are expected to ease, benefiting Smoore's pod and open-system vape businesses [1][9] - The launch of HNB products by major customers like BAT could create a second growth curve for Smoore [1][13] - Smoore's platform-based advantages in vaporization technology are expected to open new growth opportunities in medical and beauty vaporization [1][14] Market Opportunities US Market - The US illegal vape market accounts for over 70% of the market share, but regulatory crackdowns and potential relaxation of flavor restrictions could drive growth in the legal pod market [1][11] - The mid-term market size for legal pod systems in the US is expected to grow by 63%-299% compared to 2023 levels [1] - FDA has approved menthol-flavored vapes for the first time, signaling a potential easing of flavor restrictions [126] European Market - European countries are gradually implementing bans on disposable vapes, which could benefit Smoore's pod and open-system products [1][12] - The mid-term market size for pod systems in Europe is expected to grow by 42%-60%, while open-system products could grow by 52%-75% compared to 2023 levels [1] HNB Market - The global HNB market reached $34.1 billion in 2023, with a CAGR of 23.1% from 2018-2023 [1][13] - Smoore's major customer BAT is launching a breakthrough HNB product, Glo Hilo, in 2025, which could drive significant growth [1][13][159] Financial Performance - Revenue declined by 11.71% in 2022 and 8.04% in 2023, but is expected to grow by 7.8% in 2024 and 21.21% in 2026 [3] - Net profit attributable to shareholders dropped by 52.52% in 2022 and 34.47% in 2023, but is projected to grow by 43.02% in 2026 [3] - EPS is forecasted to be RMB 0.22, 0.26, and 0.37 for 2024-2026, respectively [1] R&D and Innovation - Smoore has maintained high R&D investment, with R&D expenses reaching RMB 1.483 billion in 2023, a 435% increase from 2019 [92] - The company has accumulated 7,695 patents globally, including 3,867 invention patents [92] - Smoore has developed new technologies like FEELM Turbo and POWER ALPHA 2.0, maintaining its leadership in core vaporization technologies [92] New Business Opportunities Medical Vaporization - Smoore has developed the Air Smooth medical mesh nebulizer system, which reduces drug waste by 60% [166] - The global pulmonary drug delivery device market is expected to grow from $60.1 billion in 2023 to $99.5 billion by 2031 [166] Beauty Vaporization - Smoore has launched its own beauty vaporization brand, MOYAL, targeting the mid-to-high-end market [165] Special Vaporization - Smoore's CCELL ceramic core technology has gained significant market share in the US special vaporization market [164]

Investment Rating - Buy (Maintained Rating) [2] Core Views - The report highlights the positive signals from British American Tobacco's (BAT) capital market communication day, where BAT reiterated its goal to become a smoke-free company by 2035 and shared updates on its new tobacco-related products [2] - The report emphasizes the growth potential in the compliant vaping market, particularly in the US, where regulatory actions against illegal products are expected to drive market expansion [3] - The report also notes the upcoming launch of BAT's new heated tobacco product, Glo Hilo, which is expected to target the high-end market and contribute to the company's growth [3] Market Analysis Vaping Market - The vaping market is expected to see significant growth, with BAT projecting that the number of vaping users will reach 110 million by 2030 [3] - The trend is shifting from disposable vaping products back to rechargeable closed-system products, which are regaining growth momentum [3] - In the US, illegal flavored products account for 70% of the vaping market, but regulatory actions in states like Louisiana have led to a 28% increase in the legal vaping market and a 91% reduction in illegal disposable product channels [3] Heated Tobacco Products (HNB) - BAT sees significant opportunities to improve its market position in the HNB category and plans to launch a breakthrough product, Glo Hilo, by the end of the year [3] - Glo Hilo is positioned as a high-end product and is expected to be further promoted in key markets by 2025 [3] - BAT has submitted a PMTA application for Glo products in the US, aiming to enter the market at an appropriate time [3] Financial Performance and Projections Revenue and Profit - The company's revenue is projected to grow from RMB 11,957 million in 2024E to RMB 16,659 million in 2026E, with a revenue growth rate of 7.06% in 2024E, 14.26% in 2025E, and 21.93% in 2026E [5] - Net profit attributable to the parent company is expected to increase from RMB 1,348 million in 2024E to RMB 2,289 million in 2026E, with a growth rate of 28.60% in 2025E and 32.09% in 2026E [5] Earnings Per Share (EPS) - EPS is projected to be RMB 0.22 in 2024E, RMB 0.28 in 2025E, and RMB 0.37 in 2026E [5] Valuation Metrics - The current stock price corresponds to a P/E ratio of 46x for 2024E, 36x for 2025E, and 27x for 2026E [5] - ROE (Return on Equity) is expected to improve from 5.92% in 2024E to 8.55% in 2026E [5] Industry Trends - The report highlights the tightening regulatory environment in the US, with the FDA and the Department of Justice forming a joint enforcement team to crack down on illegal products [3] - The FDA is also gradually approving more compliant products, such as menthol products, which could further drive market growth [3] - The European market is increasing regulation on disposable vaping products, which is expected to optimize the product structure and improve the company's profit margins [3]