Investment Rating - The report does not provide a specific investment rating for the company [1] Core Views - The company reported a total revenue of 11.799 billion yuan for 2024, representing a year-on-year increase of 5.6%, while net profit decreased by 20.8% to 1.303 billion yuan [1][2] - The growth in revenue is attributed to strong momentum in APV and cartridge replacement repairs, although profits are under pressure due to increased short-term expenses [1][2] - The company’s APV segment achieved revenue of 2.475 billion yuan in 2024, a significant year-on-year increase of 34.0%, with notable growth in Europe and the US [2][3] - The HNB product line has made significant progress, with successful product launches and positive feedback from customers, positioning HNB as a key growth area for the company [3][4] Summary by Sections Financial Performance - In 2024, the company achieved total revenue of 11.799 billion yuan, with a net profit of 1.303 billion yuan, reflecting a decrease of 20.8% year-on-year [1][7] - The gross margin for 2024 was 37.4%, down 1.4 percentage points from the previous year, while the net profit margin was 12.01%, a decrease of 2.0 percentage points [5][9] - The company expects net profits for 2025-2027 to be 1.547 billion yuan, 2.420 billion yuan, and 3.077 billion yuan respectively, with corresponding P/E ratios of 49.4X, 31.6X, and 24.9X [5][7] Revenue Breakdown - The APV segment's revenue for 2024 was 2.475 billion yuan, with growth rates of 34.0% year-on-year, and the second half of the year saw a revenue of 1.359 billion yuan, up 13.4% year-on-year [2][3] - The OEM business generated revenue of 9.224 billion yuan in 2024, a slight decrease of 0.3% year-on-year, but showed a recovery in the second half with a 10.7% increase [2][3] Future Outlook - The company is focusing on HNB as a second growth curve, with plans for a key rollout in 2025 across multiple global markets [3][4] - The company is also investing in R&D and seeking collaborations with industry leaders to enhance its HNB offerings [3][4]

Investment Rating - The report does not provide a specific investment rating for the company [1] Core Views - The company has shown a steady revenue growth of 5.6% year-on-year, achieving a total revenue of 11.799 billion yuan in 2024, although net profit decreased by 20.8% to 1.303 billion yuan due to increased short-term expenses [1][2] - The company's APV segment has performed well, with a revenue increase of 34.0% year-on-year, reaching 2.475 billion yuan, driven by strong growth in Europe and the US [2] - The HNB product line has made significant progress, with plans for a broader market launch in 2025, indicating potential for future revenue growth [3] Summary by Sections Financial Performance - In 2024, the company reported total revenue of 11.799 billion yuan, with a year-on-year growth of 5.6%. The net profit was 1.303 billion yuan, down 20.8% from the previous year [1][5] - The gross margin for 2024 was 37.4%, a decrease of 1.4 percentage points year-on-year, while the net profit margin was 12.01%, down 2.0 percentage points [5] Revenue Breakdown - The APV segment generated 2.475 billion yuan in revenue, marking a 34.0% increase year-on-year, with notable growth in Europe (+37.2%) and the US (+14.0%) [2] - The OEM business saw a slight decline of 0.3% year-on-year, totaling 9.224 billion yuan, but showed a recovery in the second half of the year with a 10.7% increase [2][3] Future Outlook - The company is focusing on HNB as a key growth area, with innovative product designs and positive feedback from customers, aiming for a significant market presence by 2025 [3] - The forecast for net profit from 2025 to 2027 is projected to grow to 1.547 billion yuan, 2.420 billion yuan, and 3.077 billion yuan respectively, with corresponding P/E ratios decreasing from 49.4X to 24.9X [5][7]

Investment Rating - The investment rating for the company is "Buy" with a target price set above the current price of 13.3 HKD, indicating an expected return of over 20% within the next six months [4][12]. Core Views - The company reported a revenue of 11.8 billion HKD for 2024, reflecting a year-on-year growth of 5.3%, while net profit decreased by 20.8% to 1.303 billion HKD [1][3]. - The company maintains its position as a global leader in the manufacturing of vaporization devices, with a market share of approximately 13.1% [7]. - The self-branded business segment showed significant growth, achieving a revenue of 2.475 billion HKD, which is a 34% increase year-on-year [7]. Summary by Sections Financial Performance - In 2024, the company generated 9.324 billion HKD from enterprise client business, accounting for 79.0% of total revenue, with a slight decline of 0.3% year-on-year. However, the second half of 2024 saw a recovery with a revenue of 5.357 billion HKD, up 9.7% [7]. - The company’s gross margin for 2024 was 37.4%, a decrease of 1.3 percentage points, primarily due to changes in product mix [7]. Business Segments - The enterprise client business saw revenues of 5.096 billion HKD from Europe and other markets, a slight increase of 0.3% year-on-year, while the U.S. market generated 3.988 billion HKD, down 2.4% [7]. - The self-branded business, including the newly launched "Lan Zhi" beauty vaporization product, contributed 2.475 billion HKD, with a notable growth of 34% [7]. Research and Development - The company invested 1.572 billion HKD in R&D in 2024, representing 13.3% of revenue, which is a 6.0% increase year-on-year [7]. - The focus of R&D includes products for vaporization medical applications and heated non-combustible products, with positive feedback received from consumers [7].

Core Viewpoint - Smoore International (06969) experienced a decline of over 6% in stock price, attributed to short-term pressure on profitability despite a revenue increase in the latest financial report [1] Financial Performance - For the fiscal year 2024, Smoore reported revenue of 11.799 billion RMB, reflecting a year-on-year increase of 5.3% [1] - The company's net profit was 1.303 billion RMB, showing a year-on-year decline of 20.8% [1] - Basic earnings per share were 21.42 cents, with a proposed final dividend of 0.05 HKD per share [1] Market and Product Outlook - The chairman and CEO, Chen Zhiping, indicated that the company's support for clients in launching heated not-burn (HNB) products will lead to increased sales in more global markets starting mid-year [1] - Although HNB products are not expected to contribute significantly to profits this year and may even incur losses, they are projected to provide substantial profit contributions starting next year, potentially exceeding those from e-cigarettes in the long term [1]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 16.78 [7][8]. Core Views - The company's revenue for 2024 is projected to be HKD 11.80 billion, reflecting a year-over-year increase of 5.3%, while the net profit attributable to shareholders is expected to be HKD 1.30 billion, a decrease of 20.8% year-over-year. This is slightly below previous expectations due to increased sales and R&D expenses, as well as higher tax expenses compared to the previous year [1][4]. - The second half of 2024 shows a recovery in revenue growth, primarily driven by increased demand for closed-system products due to stricter regulations on non-compliant e-cigarettes in the U.S. and bans on disposable e-cigarettes in several European countries. The company's proprietary brand VAPORESSO is also experiencing rapid growth [1][2]. Summary by Sections Revenue and Profitability - The company's revenue for the first half of 2024 is expected to be HKD 5.04 billion, a decrease of 1.7% year-over-year, while the second half is projected to be HKD 6.76 billion, an increase of 11.2% year-over-year. The net profit for the first half is expected to be HKD 680 million, a decrease of 4.8%, and for the second half, HKD 620 million, a decrease of 33.2% [1][2]. Business Segments - The To B sales revenue for 2024 is projected to be HKD 93.2 billion, a slight decrease of 0.3% year-over-year. The first half is expected to generate HKD 39.2 billion, a decrease of 12.3%, while the second half is expected to recover with HKD 54.0 billion, an increase of 10.7% year-over-year. The U.S. market is expected to see a revenue increase to HKD 21.3 billion in the second half, a quarter-over-quarter increase of 14.6% and a year-over-year increase of 5.2% [2][3]. Cost Structure and Margins - The gross profit margin for 2024 is projected to be 37.4%, a decrease of 1.4 percentage points year-over-year, primarily due to changes in the business structure leading to increased labor and indirect costs. The selling, administrative, and R&D expense ratios are expected to be 7.8%, 7.7%, and 13.2%, respectively, with the increase in selling expenses attributed to the expansion in international markets and new product promotions [3][4]. Future Outlook - The report forecasts net profits for 2025, 2026, and 2027 to be HKD 1.59 billion, HKD 2.21 billion, and HKD 2.85 billion, respectively, with corresponding EPS of HKD 0.26, HKD 0.36, and HKD 0.46. The HNB business is expected to ramp up significantly by 2026, leading to an adjustment in valuation to a PE of 43 times for 2026 [4][6].

Investment Rating - The report maintains a rating of "Buy" for Smoore International (06969.HK) [1] Core Views - The company achieved a revenue of 11.799 billion yuan in 2024, representing a year-on-year increase of 5.6%, while the net profit attributable to shareholders was 1.303 billion yuan, down 20.8% year-on-year [7] - The second half of 2024 saw a revenue of 6.761 billion yuan, up 11.8% year-on-year, but the net profit was 620 million yuan, down 33.2% year-on-year [7] - The gross margin for 2024 was 37.4%, a decrease of 1.3 percentage points, primarily due to changes in product mix [7] - The company is experiencing rapid growth in its proprietary brand business, with revenue reaching 2.475 billion yuan, up 34% year-on-year [7] - The HNB (Heated Not Burned) product line is expected to contribute significantly to profits, with the new product glo Hilo showing positive feedback during trials in Serbia [7] Summary by Sections Financial Performance - Total revenue for 2024 was 11.799 billion yuan, with a year-on-year decline of 8.04% in 2023 [1] - The net profit attributable to shareholders for 2024 was 1.303 billion yuan, down 34.47% from 2023 [1] - Earnings per share (EPS) for 2024 is projected at 0.21 yuan, with a P/E ratio of 59.07 [1] Business Segments - Revenue from proprietary brand business reached 2.475 billion yuan, up 34% year-on-year, while revenue from disposable electronic vapor products was 3.050 billion yuan, down 9.5% [7] - The company’s B2B business revenue for the second half of 2024 was 5.402 billion yuan, up 9.7% year-on-year [7] Market Trends - The report highlights a positive trend in H2 revenue growth due to stricter regulations in Europe and the US, which has led to a recovery in ODM sales [7] - The HNB market is rapidly growing, and the company is diversifying its vaporization business, including beauty and medical applications [7] Profit Forecast - The report adjusts profit forecasts for 2025 to 2027, estimating net profits of 1.636 billion yuan, 2.221 billion yuan, and 2.870 billion yuan respectively [7] - The corresponding P/E ratios for these years are projected at 47, 35, and 27 [7]

Investment Rating - The investment rating for the company is "Buy" (maintained) [6] Core Views - The company is expected to see steady growth in HNB (Heated Not Burned) products in 2025, with significant contributions anticipated in the second half of the year. The potential of the aerosol medical business is also highlighted as a key component of the company's 2030 goals [11] - Revenue for 2024 is projected at 117.99 billion CNY, with a year-on-year growth of 5.3%, while net profit is expected to decline by 20.8% to 13.03 billion CNY [1][11] - The company is focusing on expanding its HNB and aerosol medical product lines, with R&D investments showing significant increases in these areas [3][11] Financial Performance - In 2024, the company achieved a revenue of 117.99 billion CNY, with a net profit of 13.03 billion CNY, resulting in a net profit margin of 11.05% [1] - The company’s revenue for the fourth quarter of 2024 was 34.63 billion CNY, reflecting an 8% increase year-on-year, but a decline in profit by 42% due to high expenses [1] - The projected revenues for 2025, 2026, and 2027 are 128.92 billion CNY, 151.12 billion CNY, and 173.48 billion CNY, respectively, with corresponding net profits of 16.19 billion CNY, 21.21 billion CNY, and 26.59 billion CNY [11][12] Market Potential - The global market for electronic aerosol is expected to reach 91.42 billion USD by 2029, with a CAGR of approximately 7.4% from 2024 to 2029 [4] - The heated not burned market is projected to reach 66.86 billion USD by 2029, with a CAGR of about 10.1% during the same period [4] - The aerosol medical market is anticipated to grow significantly, with the global market for pulmonary drugs and delivery devices expected to reach 93.28 billion USD by 2030 [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 [3]. Core Views - The company reported a revenue of 11.8 billion yuan for 2024, reflecting a year-on-year increase of 5.3%, while net profit decreased by 20.8% to 1.3 billion yuan. The Q4 revenue was 3.48 billion yuan, up 9.8% year-on-year, but net profit fell by 43.2% to 240 million yuan [1]. - The company's ODM (Original Design Manufacturer) and OBM (Original Brand Manufacturer) revenues showed contrasting trends, with ODM revenue declining slightly by 0.3% to 9.32 billion yuan, while OBM revenue increased by 34.0% to 2.48 billion yuan. In H2, ODM and OBM revenues grew by 9.7% and 13.4% respectively [1]. - The company is experiencing a recovery in its ODM business, particularly in the Chinese market, where revenue increased by 49.6% in H2. However, the European market is facing challenges due to regulations on disposable products [1][2]. - The gross margin for 2024 decreased by 3.9 percentage points to 36.9%, attributed to changes in product mix and rising labor costs. R&D expenses reached 1.57 billion yuan, representing 13.3% of revenue, as the company increased investment in atomization medical and HNB (Heated Not Burned) products [2]. - The HNB market is expected to expand, with potential growth driven by new product launches and market entry strategies. The company is optimistic about its hilo product line following successful trials in Serbia [2]. Summary by Sections Performance Review - The company reported a revenue of 11.8 billion yuan for 2024, with a net profit of 1.3 billion yuan, reflecting a year-on-year decrease of 20.8% [1]. - Q4 revenue was 3.48 billion yuan, up 9.8% year-on-year, while net profit fell by 43.2% to 240 million yuan [1]. Business Analysis - ODM revenue decreased by 0.3% to 9.32 billion yuan, while OBM revenue increased by 34.0% to 2.48 billion yuan [1]. - The Chinese market showed strong growth in ODM, with H2 revenue up 49.6% [1]. - The gross margin decreased to 36.9% due to product mix changes and increased costs [2]. Profit Forecast and Valuation - EPS forecasts for 2025-2027 are 0.24, 0.40, and 0.56 yuan respectively, with corresponding PE ratios of 52, 32, and 22 [3].

Company and Industry Summary Company Overview - The company reported a revenue of 11.8 billion and a net profit of 1.3 billion for 2024, reflecting a year-on-year increase of 5.3% in revenue but a decrease of 20.8% in net profit [1] - The overall profit met expectations, with a recovery trend observed in ODM (Original Design Manufacturer) business revenue in the second half of the year [1] ODM Business Insights - The ODM business is projected to decline by 0.3% for the entire year 2024, but is expected to grow by 9.7% year-on-year in the second half [1] - Recovery in the ODM business is noted across various regions, with the United States and Europe showing growth rates of 5.1% and 14.2% respectively in the second half [1] - The Chinese market for ODM is expected to see a year-on-year increase of 25.1%, reaching 240 million [1] - The overall assessment aligns with previous expectations regarding the end of the global downturn for the company's aerosol ODM business [1] OBM Business Performance - The OBM (Original Brand Manufacturer) business is projected to generate 2.48 billion in revenue for the year, reflecting a year-on-year increase of 34%, with a 13.4% increase in the second half [1] R&D Investment - The company is increasing its R&D investment, with a projected R&D expenditure of 1.57 billion for 2024, marking a 6% year-on-year increase, primarily focused on HNB (Heated Not Burned) and medical aerosol products [2] Future Outlook - 2025 is anticipated to be a turning point for the company's performance, with long-term growth expected [2] - Two core growth drivers are emphasized: 1. **Aerosol Products**: The company is closely tied to leading tobacco groups and is expected to benefit significantly from the expansion of the compliant market in the U.S., where over 70% of aerosol sales are currently from the illegal market, as well as from category shifts in Europe [2] 2. **HNB Products**: The glo hilo product line is considered to have a competitive edge, with strong potential for market share growth as major clients express positive sentiments [2] Key Catalysts to Monitor - The market sales performance and consumer feedback for the gloHilo product line in key countries (excluding Serbia) after its launch in 2025 [2] - The regulatory environment for aerosol electronic cigarettes in the U.S. and Europe, and the pace of expansion in the compliant aerosol market [2]

Financial Data and Key Metrics Changes - In 2024, revenue was RMB 13.4 billion, up 5.3% year on year, with a better growth rate in the second half of the year compared to the first half [32] - Gross margin decreased to 37.4% from 38.7% in 2023, attributed to lower gross margin in ODM yield growth [33] - Profit before tax was RMB 1.655 billion, down 14.5%, while after-tax profit decreased by 4.8% [36] - Comprehensive income for the year was RMB 1.416 billion, with earnings per share at RMB 21.42 and a final dividend of RMB 5, resulting in a payout ratio of 40.2% [38] Business Line Data and Key Metrics Changes - Self-branded business revenue was RMB 2.48 billion, increasing its share of total revenue from 16.5% in 2023 to 21% in 2024 [39] - ODM business revenue was RMB 9.32 billion, accounting for 70% of total revenue, with a slight decline of 0.3% year on year [40] - The self-branded business saw a 30% growth in the first half of the year but only 13.3% in the second half due to a higher base [41] Market Data and Key Metrics Changes - In the U.S. market, revenue was RMB 402 million, with significant contributions from Europe and other overseas markets [42] - The China market generated RMB 30 million in revenue, primarily from beauty atomization products launched in the first half of the year [43] - ODM business in Europe saw a slight increase of 0.3%, while the U.S. market experienced a small decline of 2.4% due to cash flow pressures faced by some customers [46] Company Strategy and Development Direction - The company aims to solidify its position in the atomization industry, focusing on e-cigarettes, H&B, beauty, inhalation therapy, and special purpose atomization [20][22] - The management emphasizes the importance of R&D and technology as the main engine for development, with a commitment to innovation and long-term operation [24][25] - The company is optimistic about the future, expecting growth in various segments, particularly in H&B and beauty optimization products [20][22] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about growth amidst stability in the e-cigarette market, with expectations for a turning point in 2025 [18][21] - The company is focused on enhancing management quality and productivity to prepare for future high-speed growth [30] - The management highlighted the importance of compliance and adapting to regulatory changes in key markets like the U.S. and Europe [67][116] Other Important Information - The company has invested significantly in R&D, with expenses increasing from RMB 1.48 billion to RMB 1.57 billion in 2024 [35] - The beauty atomization product, Moyo, launched in 2024, has received positive feedback and is expected to perform better in 2025 [75] - The company is exploring new markets and product categories, including inhalation therapy and beauty atomization, to diversify its offerings [54][75] Q&A Session Summary Question: What are the considerations behind the stock incentive plan linked to market cap? - The management emphasized the alignment of the incentive plan with shareholder interests and the confidence in achieving the set market cap goals [81][83] Question: How is customer feedback on new HMB products and their global launch progress? - The management reported positive feedback from trial sales, highlighting improvements in convenience and flavor, with plans for a proactive global rollout [92][95][96] Question: How is the company adapting to changes in consumer behavior and regulations in Europe? - The management noted a shift towards pod-based and open system products, with a focus on compliance and product innovation to meet market demands [99][103] Question: What is the expected timeline for H&B product development and market launch? - The management indicated that the R&D process for H&B products took ten years, and they are now focused on empowering customers to expedite market entry [106][108] Question: What is the impact of new regulations on product pricing and profits in Europe? - The management expressed optimism about stable growth in Europe, driven by compliance and product iteration, which is expected to enhance revenue and profits [116]