Investment Rating - The industry investment rating is "Positive" [1] Core Viewpoints - The report highlights the growth of emotional consumption and high-quality domestic products, indicating a robust performance in the light industry sector [1][5] - The report anticipates a recovery in traditional consumption sectors, with a focus on companies that are expected to reach performance inflection points in the second half of the year [9][10] Summary by Sections 1. Economic Overview - The overall economic environment is described as weak, but there is structural prosperity in consumption [5] 2. Performance Review for 24A & 25Q1 - Emotional consumption and high-quality domestic products have shown significant growth, with companies like Pop Mart and others demonstrating strong performance [9] - Traditional consumption sectors are expected to stabilize and recover, with companies such as Oppein Home, Gujia Home, and others being highlighted for their potential [9] 3. Sub-sector Performance - **Home Products**: 24A revenue decreased by 0.28% YoY, while net profit dropped by 16.21%. However, 25Q1 showed a revenue increase of 3.79% and a net profit increase of 10.78% [9] - **Paper Industry**: 24A revenue decreased by 1.25% YoY, with a significant drop in net profit of 136.6%. 25Q1 saw a revenue decline of 13.04% and a net profit decrease of 91.72% [9] - **Packaging**: 24A revenue increased by 2.55% YoY, but net profit fell by 16.81%. In 25Q1, revenue grew by 9.2% and net profit increased by 19.7% [9] - **Cultural and Entertainment Products**: 24A revenue increased by 7.64% YoY, with a net profit decrease of 8.81%. 25Q1 showed a slight revenue increase of 2.42% and a net profit decrease of 6.95% [9] - **Personal Care Products**: 24A revenue increased by 6.30% YoY, with a net profit decrease of 4.71%. 25Q1 saw a significant revenue increase of 26.13% and a net profit increase of 12.94% [9] 4. Fund Holdings Analysis - The fund holding ratio for the light industry sector decreased to 2.28%, with notable changes in specific sub-sectors [12] - Companies like Sun Paper, Morning Glory, and others are leading in fund holdings, particularly in emotional consumption categories [15]

Core Viewpoint - The strong performance of Philip Morris International's (PMI) Q1 2025 results indicates significant growth potential for the heated tobacco product (HNB) market, which is relevant for Smoore International as a key supplier in this sector [1][2] Group 1: Company Performance - Smoore International's stock rose over 3%, currently trading at 13 HKD with a transaction volume of 73.1681 million HKD [1] - PMI's Smoke-Free Products (SFP) revenue increased by 20.4% year-on-year, with gross profit rising by 33.1% and a gross margin exceeding 70%, up by 6.7 percentage points [1] - The shipment volume for PMI's products grew by 14.4% year-on-year, with HNB, oral tobacco, and e-cigarettes increasing by 12%, 27%, and 107% respectively [1] Group 2: Market Insights - The international tobacco giants are advancing their smoke-free strategies, with PMI's Q1 performance aligning with expectations for HNB growth, particularly in the U.S. market [2] - The HNB market has substantial growth potential, with regulatory advantages over vaping products, including lower appeal to youth and easier harm reduction validation [2] - The competitive landscape for HNB is favorable due to fewer participating manufacturers, and British American Tobacco's new Glo Hilo product shows significant improvements in performance and user experience compared to both leading products and previous generations [2]

证券研究报告 | 公司点评 | 家居用品 思摩尔国际(06969) 报告日期：2025 年 04 月 24 日 菲莫一季报再次印证新型烟草大势，持续布局 ——思摩尔国际点评报告 投资要点 ❑ 事件：4.23 菲莫国际发布 2025Q1 业绩，IQOS 作为 HNB 市场份额 70%+的领军 产品，从其经营表现感知行业成长，对思摩尔的 HNB 业务潜力具备指导意义。 3）美国 HNB 市场即将打开：美国市场 3 月底在德州试销收到了强烈的市场反 馈，未来几个月进行更多的试点。 4）对 25 年 IQOS 的指引：维持此前 25 全年烟支销量同比增长 10-12%（24 年达 到 1400 亿支、同比+11.6%）的指引，管理层预计今年剩余时间 IQOS 将保持双 位数增长。 5）菲莫 HNB 烟弹 25Q1 在全球市场的份额为 5.7%（同比+0.6pct），在日本市 场达到 32.2%（24Q4 为 30.6%） ❑ 新型口含烟 ZYN 表现亮眼，雾化电子烟开始起量，稳步迈向"无烟气未来" 1）新型口含烟：尼古丁袋 ZYN 在美国 25Q1 出货量 2.02 亿罐（同比+53%）， 在美国以外的国际市场同样取 ...

Financial Performance - Total revenue for 2024 was RMB 11,798.662 million, representing a 5.3% increase from RMB 11,203.250 million in 2023[10] - Gross profit for 2024 was RMB 4,411.969 million, with a gross margin of 37.4%, down from 38.7% in 2023[10] - Net profit for 2024 decreased to RMB 1,303.255 million, reflecting a net profit margin of 11.0%, compared to 14.7% in 2023[10] - The company achieved revenue of approximately RMB 11,798.66 million in the review period, representing a year-on-year growth of about 5.3%[27] - The group's total revenue for the year ended December 31, 2024, was approximately RMB 11,798,662 thousand, representing a 5.3% increase from RMB 11,203,250 thousand in 2023[72] - The gross profit for the review period was approximately RMB 4,411,969 thousand, a 1.6% increase from RMB 4,340,911 thousand in 2023, with a gross margin decrease from 38.7% to 37.4%[73] Asset Management - The company reported a significant increase in non-current assets, reaching RMB 10,807.950 million in 2024, up from RMB 5,937.532 million in 2023[10] - Current assets decreased to RMB 16,846.428 million in 2024 from RMB 19,570.752 million in 2023, while current liabilities increased to RMB 5,259.365 million[10] - The asset-liability ratio increased to 20.8% in 2024 from 16.1% in 2023, indicating a higher proportion of liabilities relative to total assets[12] - As of December 31, 2024, the group's current assets net value was approximately RMB 11,587,063 thousand, down from RMB 16,004,419 thousand in 2023[86] - The group's current ratio as of December 31, 2024, was approximately 320.3%, a decrease from 548.8% in 2023[87] - The asset-liability ratio as of December 31, 2024, was approximately 26.2%, compared to 19.1% in 2023[90] Dividend and Shareholder Information - The company plans to declare a final dividend of HKD 0.05 per ordinary share for the year ended December 31, 2024[11] - The board has proposed a final dividend of HKD 0.05 per ordinary share for the year ending December 31, 2024, subject to approval at the upcoming annual general meeting[166] - The company's distributable reserves as of December 31, 2024, amount to RMB 7,047.7 million[161] Business Segments and Growth - The electronic vaporization segment showed positive growth due to increased regulatory enforcement against non-compliant products, leading to a shift in consumer demand towards compliant products[14] - The company successfully launched new business lines in heated non-combustible products and aerosol medical and beauty products, contributing to overall business diversification[14] - In the heating non-combustion product sector, the company plans to support strategic clients in launching products in more markets, focusing on user feedback for continuous product iteration[20] - The company successfully launched the "Lan Zhi" brand in the aerosol beauty business, which has gained recognition through online promotions and offline channels, achieving impressive sales during major marketing events[16] - The company anticipates that 2025 will be a critical year for the second growth curve, with plans to expand into harm reduction products and strengthen its competitive edge in core businesses[21] - The group launched multiple new product series in overseas markets across various segments, including electronic vaporization and medical vaporization, enhancing R&D efficiency through scientific classification management[29] Research and Development - The company is committed to increasing R&D investment, particularly in aerosol medical and heating non-combustible products, which have shown satisfactory breakthroughs during the review period[16] - Research and development expenditure for the period was approximately RMB 1,572,313 thousand, an increase of 6.0% year-on-year, accounting for about 13.3% of total revenue[48] - R&D expenditure for electronic nicotine delivery systems was RMB 1,034,668 thousand, accounting for 65.8% of total R&D spending, with a slight increase of 0.1% year-on-year[52] - R&D expenditure for medical and beauty aerosol products increased by 41.3% year-on-year to RMB 392,180 thousand, accounting for 24.9% of total R&D spending[52] - The company filed a total of 1,558 new patent applications globally during the period, including 893 invention patents, bringing the cumulative total to 9,253 patents[51] Market and Regulatory Environment - The group achieved a revenue contribution of approximately 37.4% from the U.S. market during the review period, with significant legal and regulatory developments impacting the electronic nicotine delivery systems (ENDS) products[33] - The FDA has taken action on over 99% of PMTA submissions, with ongoing legal challenges affecting several ENDS products[33] - The UK has not introduced any significant laws or regulations related to electronic cigarettes and vaping devices as of December 31, 2024, contributing 25.5% to revenue[34] - In the EU, countries with flavor restrictions include Finland, Estonia, Hungary, and others, with a revenue contribution of 7.9%[34] - Hong Kong has proposed a complete ban on alternative smoking products, which is expected to impact 32.8% of revenue by December 31, 2024[36] - The mainland China market's revenue contribution is approximately 2.2%, with new regulations being implemented in July-August 2024[36] Corporate Governance - The board consists of eight directors, including three independent non-executive directors, ensuring sufficient checks and balances within the board[109] - The company has adopted the corporate governance code and complied with all provisions except for the separation of the roles of chairman and CEO, which are held by the same individual[108] - The independent non-executive directors reviewed and confirmed that the related party transactions were conducted on fair and reasonable terms[105] - The company has established a clear process for the appointment and re-election of directors, with terms set at three years[115] - The company has implemented an anti-corruption policy to prevent bribery and corruption within its operations[130] Employee and Gender Diversity - Overall employee gender ratio is 48.14% female (8,939) and 51.86% male (9,631) across the company[124] - The company has appointed one female executive director and one female non-executive director as of December 31, 2024[122] - The board consists of 25% female members (2 out of 8) and 75% male members (6 out of 8) as of December 31, 2024[124] - The company emphasizes gender diversity in recruitment and selection processes at all levels[122] Risk Management - The company’s risk management and internal control systems aim to manage operational efficiency and ensure compliance with relevant laws and regulations[142] - The Board has confirmed the effectiveness of the risk management and internal control systems as of December 31, 2024[144] - The company's overall risk management process is integrated into daily operations, with management responsible for identifying and responding to risks[144] Stock Options and Incentives - The company has granted a total of 129,524,700 stock options, with 98,158,700 options currently exercisable[193] - The share incentive plan aims to recognize and reward contributions from eligible participants to the group's growth and development, while also attracting suitable personnel[195] - The maximum number of shares that can be held under the plan at any time is capped at 2% of the total issued shares (excluding treasury shares)[198] - The total number of shares issued to each eligible participant under the plan within any 12-month period cannot exceed 1% of the total issued shares (excluding treasury shares)[200]

Investment Rating - The report maintains a "Buy" rating for the company [7] Core Views - The company is expected to see a recovery in its core business of atomization, with promising growth in the HNB (Heated Not Burned) segment. The revenue growth trend is anticipated to continue into 2025, supported by increased demand for compliant products due to regulatory changes in the US and Europe [1][2][4] Summary by Sections Financial Performance - The company forecasts a pre-tax profit of 255 million RMB for Q1 2025, representing a year-over-year decline of 36.3%, and a post-tax profit of 192 million RMB, down 43.4% year-over-year. This decline is attributed to increased business investments and a higher tax rate [1] - For 2025, the company expects revenues to reach 12.96 billion RMB, reflecting a growth of 9.82% compared to 2024 [6] Business Segments - In the To B (business-to-business) segment, the company anticipates revenue recovery driven by stricter enforcement of regulations on non-compliant electronic vapor products in the US and increased demand for compliant products in Europe. Revenue growth in the US and Europe is projected at 5.2% and 14.4% respectively for the second half of 2024 [2] - The To C (business-to-consumer) segment is expected to see continued strong performance from the company's proprietary brand, VAPORESSO, with projected revenue of 2.48 billion RMB in 2024, a year-over-year increase of 34.0% [2] HNB Business - The company has made significant progress with its HNB business, particularly with the launch of new products by a major client, British American Tobacco (BAT). The Glo Hilo series is expected to be introduced to additional markets in 2025-2026, indicating substantial growth potential for the company [3] - The global HNB market was valued at 34.463 billion USD in 2023, with PMI holding a market share of 71% and BAT at 15.3%, highlighting the competitive landscape and growth opportunities for the company [3] Profit Forecast and Valuation - The report adjusts the profit forecasts for 2025-2027, estimating net profits of 1.323 billion RMB, 2.140 billion RMB, and 2.762 billion RMB respectively. The corresponding EPS is projected to be 0.21 RMB for 2025, 0.35 RMB for 2026, and 0.45 RMB for 2027 [4][6] - The target price is set at 16.25 HKD, based on a PE ratio of 43 times the expected EPS of 0.36 RMB for 2026 [4]

Investment Rating - The report maintains a "Buy" rating for the company, expecting a price increase of over 15% in the next 6-12 months [4]. Core Insights - The company reported a significant decline in profits for Q1 2025, with pre-tax and post-tax profits of 260 million and 190 million CNY, respectively, representing year-on-year decreases of 36.3% and 43.4% [2]. - The overseas compliance trend is improving, and the proprietary brand business is expected to continue performing well, driven by stricter regulations on illegal vaping products and market expansion [2][4]. - Increased marketing investments in proprietary brand business and rising stock incentive amortization and R&D expenses are impacting short-term profit performance, but the long-term outlook remains positive [3][4]. Financial Performance Summary - For 2025-2027, the expected EPS is 0.20, 0.40, and 0.56 CNY, with corresponding PE ratios of 46, 23, and 17 times [4]. - Revenue projections show a growth trajectory from 11,168 million CNY in 2023 to 19,489 million CNY by 2027, with a compound annual growth rate (CAGR) of approximately 20.45% [7]. - The net profit is expected to recover from 1,303 million CNY in 2024 to 3,451 million CNY in 2027, indicating a strong rebound in profitability [7].

Investment Rating - The report maintains a "Buy" rating for the company, expecting a price increase of over 15% in the next 6-12 months [4]. Core Views - The company reported a significant decline in profits for Q1 2025, with pre-tax and post-tax profits of 260 million and 190 million CNY, respectively, representing year-on-year decreases of 36.3% and 43.4% [2]. - The overseas compliance trend is improving, and the proprietary brand business is expected to continue performing well. The revenue is anticipated to grow due to stricter regulations on illegal vaping products and the expansion of the compliant market [2]. - Increased marketing investments in proprietary brand business and rising stock incentive amortization and R&D expenses are impacting short-term profit performance, but the overall profit impact is seen as temporary [3]. - The company is rationally addressing tariff impacts on its HNB (Heat-not-Burn) business, with a focus on markets in Japan and Europe, while the growth logic for HNB remains unchanged [4]. Financial Performance Summary - The company’s revenue for 2023 was 11,168 million CNY, with a projected growth rate of -8.04% for 2024, followed by a recovery with growth rates of 10.79%, 23.78%, and 20.45% for 2025, 2026, and 2027, respectively [7]. - The net profit attributable to the parent company for 2023 was 1,645 million CNY, with a significant decline of 34.47% expected in 2024, followed by a gradual recovery [7]. - The diluted EPS is projected to be 0.20, 0.40, and 0.56 CNY for 2025, 2026, and 2027, respectively, with corresponding P/E ratios of 46, 23, and 17 [4][7].

Investment Rating - The report does not provide a specific investment rating for the company [1] Core Views - The company has shown steady growth in its vaping segment, while the future of Heat-Not-Burn (HNB) products looks promising, although increased expenditure is impacting short-term profitability [1][2] - The company is expected to face challenges with disposable products due to tightening regulations in various countries, but there is potential for growth in the APV and HNB segments [2][3] - The U.S. market is crucial for the company, with expectations for the launch of new HNB products, which could enhance market share and revenue [3] Financial Performance Summary - In Q1 2025, the company reported a net profit of 192 million yuan, a decrease of 43.4% year-on-year, with total comprehensive income of 208 million yuan, down 32.9% year-on-year [1] - Revenue for 2024 is projected at 11.799 billion yuan, with a growth rate of 6%, and net profit expected to be 1.303 billion yuan, reflecting a decline of 21% year-on-year [5][6] - The company’s adjusted net profit forecasts for 2025, 2026, and 2027 are 1.411 billion yuan, 2.337 billion yuan, and 3.032 billion yuan, respectively, with corresponding P/E ratios of 39.9X, 24.1X, and 18.6X [4][5] Market and Product Insights - The company is positioned as a key supplier for British American Tobacco, which is expanding its HNB product offerings in various markets, including the U.S. [3] - The anticipated launch of the IQOS ILUMA in the U.S. is expected to further pressure traditional cigarette sales, leading to increased focus on HNB product development [3] - The company is expected to benefit from its unique production capabilities and technology, which may help mitigate tariff pressures in the U.S. market [4]

Investment Rating - The report does not provide a specific investment rating for the company [1] Core Views - The company is experiencing steady growth in its vaping segment, while the future of Heat-Not-Burn (HNB) products looks promising, although increased expenses are impacting short-term profitability [1] - The company reported a net profit of 192 million yuan for Q1 2025, a decrease of 43.4% year-on-year, with total comprehensive income of 208 million yuan, down 32.9% year-on-year [1] - The report anticipates a stable revenue stream for Q1, with profit pressure primarily due to increased expenses and a higher tax rate compared to the previous year [1] Summary by Sections Market Environment - The report highlights regulatory changes affecting disposable vaping products in Belgium, France, and the UK, which are expected to pressure the company's performance in this segment [2] - The company is expected to see a recovery in its APV and refillable products overseas, with a trend of year-on-year improvement anticipated [2] HNB Product Development - The company is positioned to benefit from the expansion of HNB products in the US market, with expectations for the launch of new products by PMI [3] - The report notes that the US market is crucial for the company, with projected revenue and adjusted operating profit contributions of 44% and 54%, respectively [3] Financial Projections - The company is projected to achieve adjusted net profits of 1.41 billion yuan in 2025, 2.34 billion yuan in 2026, and 3.03 billion yuan in 2027, with corresponding P/E ratios of 39.9X, 24.1X, and 18.6X [4] - Total revenue is expected to grow from 11.8 billion yuan in 2024 to 17.1 billion yuan in 2027, with a compound annual growth rate of approximately 23% [5] - The report outlines a decrease in net profit for 2024, followed by a recovery in subsequent years, with growth rates of 8% in 2025 and 66% in 2026 [5][7] Key Financial Metrics - The company’s total assets are projected to increase from 27.65 billion yuan in 2024 to 35.85 billion yuan in 2027, indicating a strong growth trajectory [6][7] - The report provides detailed financial metrics, including operating income, net profit, and earnings per share (EPS), with EPS expected to rise from 0.21 yuan in 2024 to 0.49 yuan in 2027 [5][6]

Investment Rating - The report does not provide a specific investment rating for the company [1] Core Insights - The expansion pace of the HNB (Heated Not Burned) market in the US and UK is becoming clearer, with the company positioned as a core supplier benefiting from high growth rates [4] - The HNB industry has a long supply chain with few companies capable of integrated design and R&D, leading to high Know-How barriers and increasing patent restrictions [1][2] - The report anticipates significant growth in HNB product sales, particularly in the US market, with projections indicating a potential increase in HNB penetration to 20% by 2028 [3] Summary by Sections Company Overview - The company is recognized for its strong strategic positioning and substantial profitability in its other business segments, leading in R&D investment [2] Market Expansion - The report highlights the urgency for British American Tobacco to enhance its HNB product offerings, particularly with the anticipated launch of GLO HILO in 2024 [3][4] - The US market is crucial for British American Tobacco, contributing 44% of revenue and 54% of adjusted operating profit [3] Financial Projections - Revenue projections for 2024 to 2027 are as follows: 11,799 million, 12,011 million, 13,922 million, and 17,063 million respectively, with year-on-year growth rates of 6%, 2%, 16%, and 23% [7] - Adjusted net profit estimates for the same period are 1,303 million, 1,411 million, 2,337 million, and 3,032 million, with corresponding growth rates of -21%, 8%, 66%, and 30% [7][10] - The report projects EPS (Earnings Per Share) to increase from 0.21 in 2024 to 0.49 in 2027 [7][10]