Financial Performance - The group's revenue for the six months ended June 30, 2024, was RMB 5,037,242 thousand, a decrease of 1.7% compared to RMB 5,122,862 thousand in the same period of 2023 [20]. - Gross profit increased by 3.2% to RMB 1,914,597 thousand, with a gross margin of 38.0%, up 1.8 percentage points from 36.2% in 2023 [20]. - The net profit margin decreased to 13.6% from 14.0% in the previous year, with net profit for the period at RMB 683,198 thousand, down 4.8% from RMB 717,342 thousand [20]. - The comprehensive income for the period was approximately RMB 724.60 million, a decrease of about 1.3% compared to the same period last year [70]. - Basic earnings per share decreased to RMB 11.20 from RMB 11.81, reflecting a decline of 5.2% year-over-year [197]. - The total revenue for the group during the review period was approximately RMB 5,037.24 million, a decrease of about 1.7% compared to the same period last year [70]. Research and Development - The company continued to increase R&D investment in the first half of 2024, focusing on aerosol medical and heated non-combustible products, with expectations for new revenue and profit growth points [13]. - Research and development expenditure totaled approximately RMB 760,112 thousand, an increase of about 23.7% compared to the previous year, with R&D spending as a percentage of revenue rising from approximately 12.0% to about 15.1% [57]. - The R&D team consists of over 1,400 personnel, with significant investment in innovation to support long-term growth and maintain competitive advantages [49]. - The company filed a total of 699 new patent applications globally during the review period, including 401 invention patents, bringing the total to 8,394 patents as of June 30, 2024 [54]. Product Development and Launches - The company launched multiple new products, including the FEELM Pro and the XROS 4, which received positive feedback and contributed to rapid revenue growth in its proprietary brand business [10]. - The atomization beauty product "MOYAL" was successfully launched, being the first in the industry to atomize high-viscosity serums, and is currently in the channel development phase [12]. - The company successfully launched several new product solutions in the first half of 2024, including the world's first 20,000 puff high-explosion dual-core disposable solution [25]. - The company plans to launch more innovative products in the second half of 2024 to enhance its product matrix and market share [15]. Market Expansion and Strategy - The company is actively advancing its atomization technology into new business areas, with steady progress in atomization medical and beauty sectors [12]. - The company is focusing on localizing its sales teams and enhancing delivery capabilities to better meet consumer preferences [12]. - The company plans to diversify its revenue across different countries and regions and enhance its product portfolio, focusing on the application of aerosol technology in healthcare and other industries [39]. - The company is committed to building a global leading aerosol technology platform, with confidence in the long-term growth of the global aerosol market [60]. Financial Position and Assets - The total assets of the group as of June 30, 2024, reached RMB 26,540,994 thousand, representing a 4.0% increase from RMB 25,508,284 thousand at the end of 2023 [20]. - Cash and cash equivalents increased by 22.6% to RMB 6,534,871 thousand from RMB 5,332,076 thousand at the end of 2023 [20]. - As of June 30, 2024, net current assets were approximately RMB 13,861,870 thousand, down from RMB 16,004,419 thousand as of December 31, 2023 [102]. - The current ratio as of June 30, 2024, was approximately 396.2%, down from 548.8% as of December 31, 2023 [102]. Regulatory Environment - The regulatory environment for electronic atomization products is strengthening, which is expected to benefit the long-term development of the industry [10]. - The EU's new regulations require all tobacco products to have unique identification codes, enhancing traceability and compliance [34]. - Belgium has received EU approval to implement a ban on disposable e-cigarettes, set to take effect on January 1, 2025 [35]. Shareholder and Governance - The board declared an interim dividend of HKD 0.05 per share for the six months ended June 30, 2024, consistent with the previous year [145]. - The company has established an ESG committee to enhance its ESG management capabilities [131]. - The company has established various communication channels with shareholders and investors to provide updates and gather feedback [141]. - The board of directors believes that the current governance structure is appropriate for shareholder interests and will continue to review its effectiveness [123]. Employee and Operational Efficiency - The company emphasizes employee training and development, with structured programs for various talent levels and a focus on online learning [110]. - The company is focusing on cost reduction and efficiency improvements, successfully achieving a significant decrease in administrative expenses during the review period [27]. - Employee compensation and benefits increased by 37.1% to RMB 148,642 thousand, accounting for 3.0% of total revenue [88]. Future Outlook - The company has outlined a future outlook with a focus on market expansion and new product development [1]. - The company projects a revenue growth of 2.99% to 3.51% for the periods ending in 2025 and 2026, respectively [1]. - The company plans to continue its strategy of incentivizing key personnel through the share incentive plan to drive further growth [169].

上 市 公 司 电子 公 司 点 评 / 公 司 点 评 报告原因：有业绩公布需要点评 | --- | --- | |------------------------|---------------------| | 市场数据： | 2024 年 08 月 23 日 | | 收盘价（港币） | 8.94 | | 恒生中国企业指数 | 6219.24 | | 52 周最高/最低（港币） | 10.52/4.61 | | H 股市值（亿港币） | 548.76 | | 流通 H 股（百万股） | 6,138.24 | | 汇率（人民币/港币） | 1.0926 | 一年内股价与基准指数对比走势： -34% 16% 66% HSCEI 思摩尔国际 资料来源：Bloomberg 证券分析师 屠亦婷 A0230512080003 tuyt@swsresearch.com 研究支持 张文静 A0230122100001 zhangwj@swsresearch.com 联系人 张文静 (8621)23297818× zhangwj@swsresearch.com 2024 年 08 月 26 日 思摩尔国际 (06969) ...

Investment Rating - The report maintains a Buy-A rating for Smoore International (06969 HK) with a 6-month target price of HKD 12 12 [4] Core Views - Smoore International's self-owned brand business showed strong growth in H1 2024 with revenue increasing by 71 94% YoY to RMB 1 116 billion while ODM revenue declined by 12 35% YoY to RMB 3 922 billion [2] - The company's gross margin improved to 38 0% in H1 2024 up 1 8 percentage points YoY driven by the higher proportion of high-margin self-owned brand business and cost reduction efforts [3] - Smoore International is expected to achieve revenue of RMB 12 357 billion in 2024 representing a YoY growth of 10 65% with adjusted net profit of RMB 1 694 billion a YoY increase of 0 95% [3] Business Performance - In H1 2024 Smoore's self-owned brand VAPORESSO continued to gain market share in the open-system product category with revenue from Europe and other markets surging 88 0% YoY to RMB 929 million and US revenue growing 20 6% YoY to RMB 187 million [2] - The company's enterprise-facing sales showed signs of recovery with US revenue declining 9 8% YoY to RMB 1 858 billion and European revenue down 16 0% YoY to RMB 1 976 billion However Q2 2024 saw a sequential recovery with US revenue up 6 1% QoQ and European closed-system pod revenue surging 93 2% QoQ [2] Financial Performance - Smoore's H1 2024 revenue decreased by 1 67% YoY to RMB 5 037 billion while net profit attributable to shareholders declined by 4 76% YoY to RMB 683 million [1] - The company's adjusted net profit margin in H1 2024 was 13 6% down 0 4 percentage points YoY due to increased sales and R&D expenses [3] Valuation and Forecast - The report forecasts Smoore's revenue to grow to RMB 14 024 billion in 2025 and RMB 15 702 billion in 2026 with adjusted net profit expected to reach RMB 1 891 billion and RMB 2 164 billion respectively [3] - Smoore's PE ratio is projected to be 31 6x 30 8x and 27 6x for 2024 2025 and 2026 respectively [3]

Investment Rating - Buy rating maintained for Smoore International (6969 HK) [4] Core Views - Smoore International reported H1 2024 revenue/net profit/total comprehensive income of RMB 5 037/683/725 million down 2%/5%/1% YoY [2][5] - Self-branded business grew strongly with Q2 pod product sales recovering and showing growth momentum [6] - R&D investments in HNB and atomization products driving long-term growth [7] Revenue Analysis - TOB business revenue declined 12% YoY in H1 2024 accounting for 78% of total revenue [6] - US/China/Europe & other regions revenue changed -10%/+41%/-16% YoY respectively [6] - Disposable/pod & HNB/APV product revenue was RMB 1 217/2 704/1 116 million changing -19%/-9%/+72% YoY [6] - US pod product revenue grew 6 1% QoQ and 6 5% YoY in Q2 [6] - Europe & other regions pod product revenue surged 93 2% QoQ and 22 5% YoY in Q2 [6] - TOC business revenue jumped 72% YoY in H1 2024 with share rising 9pcts to 22% [6] - US/Europe & other regions revenue increased 20 6%/88 0% YoY [6] - New XROS 4 product became a market hit [6] - VAPORESSO brand strengthened its leading position in open system products [6] Profitability Analysis - Gross margin improved 1 8pcts to 38 0% in H1 2024 driven by [6] - Higher-margin self-branded products gaining share [6] - Lower-margin disposable products declining [6] - Net profit declined 5% YoY in H1 2024 due to [6] - Sales expense ratio up 3 3pcts to 7 4% from international market expansion and new product launches [6] - R&D expense ratio up 3 1pcts to 15 1% from increased investments in medical atomization and HNB [6] - Management expense ratio down 2 4pcts to 6 7% from cost control and efficiency improvements [6] R&D and Growth Prospects - HNB R&D spending increased 15% YoY in H1 2024 with differentiated product solutions developed [7] - Atomization product R&D spending accounted for 24 4% of total in H1 2024 up from 18 5% in H1 2023 [7] - Launched MOYAL skincare brand and first-generation atomization beauty product solution in Q1 2024 [7] - Completed development of several drug delivery devices for asthma and COPD and 10+ drug formulations in H1 2024 [7] - Leading compliant brands expected to gain market share amid tightening regulations [7] - Key client VUSE held 51 2% US market share (closed system and disposable products) as of H1 2024 [7] - Forecast 2024-2026 net profit of RMB 1 660/1 910/2 160 million with PE of 29/25/22X [7]

Investment Rating - The report maintains a "Buy" rating for Smoore International Holdings (6969.HK) with a target price of HKD 10.7, indicating a potential upside of 17% from the current price of HKD 9.12 [3][4]. Core Insights - Smoore's revenue for the first half of 2024 was HKD 50.3 billion, a year-on-year decrease of 1.7%, while net profit was HKD 6.8 billion, down 4.8% year-on-year. The gross margin improved to 38%, up 1.8 percentage points, while the net margin slightly decreased to 13.6%, down 0.4 percentage points [1]. - The company's proprietary brand products saw significant growth, with APV product revenue reaching HKD 11.1 billion, a 72% increase year-on-year. The European market experienced an 88% revenue growth, while the U.S. market grew by 20% [1]. - The report anticipates a recovery in the domestic market, with a 41% year-on-year increase in revenue from 2B products in China, suggesting that the compliant market has likely bottomed out [1]. Financial Performance Summary - Revenue and Profit Forecasts: The expected net profits for 2024, 2025, and 2026 are HKD 16.5 billion, HKD 19.0 billion, and HKD 21.0 billion, respectively, with corresponding EPS of HKD 0.29, HKD 0.34, and HKD 0.38 [1][7]. - Sales and Cost Structure: The sales expenses increased significantly by 70% to HKD 7.6 billion, primarily due to increased marketing investments in proprietary brands and beauty products. Management expenses decreased by 27% to HKD 3.4 billion [1][15]. - R&D Investment: R&D expenses for the first half of 2024 were HKD 7.6 billion, accounting for 15.1% of revenue, reflecting a year-on-year increase of 3.1 percentage points. The company is focusing on medical and beauty product development, with a 63% increase in related R&D spending [1][15]. Market Dynamics - The report highlights a shift in European regulations favoring refillable products, which is expected to boost demand for Smoore's products in the region. The company's 2B business in Europe and other markets saw a revenue decline of 16% due to stricter regulations on disposable products, but the demand for refillable products is anticipated to recover [1]. - In the U.S. market, Smoore has the highest number of PMTA certifications among its clients, which is expected to enhance its market position as regulatory enforcement strengthens [1]. Valuation Analysis - The report employs DCF and PE valuation models, estimating a fair valuation of HKD 66.1 billion, corresponding to a target price of HKD 11.1. The average PE for the electronic cigarette industry is projected at 11.3x for 2025, and considering Smoore's market leadership, a PE of 30x is applied for 2025, leading to a target price of HKD 10.2. The final target price of HKD 10.7 reflects a blend of these valuation methods [7][10].

Investment Rating - The report suggests maintaining attention on the company due to its strategic clarity and solid fundamentals [2]. Core Insights - The company reported a revenue of 5.037 billion RMB for the first half of 2024, a year-on-year decrease of 1.7%. However, gross profit increased by 3.2% to 1.915 billion RMB, while net profit fell by 4.8% to 683 million RMB [1]. - The self-owned brand (APV) business saw significant growth, contributing 1.12 billion RMB in revenue, a year-on-year increase of 71.9%. The European and other markets experienced a rapid rise of 88%, while the US market grew by 20.6% [1]. - The company is focusing on cost management, with distribution and sales, administrative, and R&D expense ratios at 7.4%, 6.7%, and 15.1% respectively, showing changes of +3.3pp, -2.4pp, and +3.1pp year-on-year [1]. - The ODM segment aimed at enterprise clients is in a recovery phase, with reported revenue of 3.92 billion RMB. The European market saw a decline of 16%, while the US market decreased by 9.8%. In contrast, the Chinese market experienced a growth of 41.4% [1]. - The company continues to innovate, launching the MOYAL brand and developing products for asthma and COPD drug delivery systems [2].

Investment Rating - The report suggests maintaining attention on the company due to its solid fundamentals and clear strategic planning [2]. Core Insights - The company's revenue for the first half of 2024 was 5.037 billion RMB, a year-on-year decrease of 1.7%, while gross profit increased by 3.2% to 1.915 billion RMB, and net profit decreased by 4.8% to 683 million RMB [1]. - The self-owned brand (APV) business saw significant growth, contributing 1.12 billion RMB in revenue, a year-on-year increase of 71.9%, with notable growth in Europe and other markets at 88% and the US market at 20.6% [1]. - The company is focusing on cost management, with distribution and sales, administrative, and R&D expense ratios at 7.4%, 6.7%, and 15.1% respectively, showing changes of +3.3pp, -2.4pp, and +3.1pp year-on-year [1]. - The ODM segment aimed at enterprise clients reported revenue of 3.92 billion RMB, with a decline in Europe by 16% and in the US by 9.8%, while China saw an increase of 41.4% [1]. - The company is actively innovating, launching the MOYAL brand in the beauty aerosol field and developing devices for asthma and COPD medication delivery [2]. Summary by Sections Revenue Performance - Total revenue for the first half of 2024 was 5.037 billion RMB, down 1.7% year-on-year [1]. - Gross profit reached 1.915 billion RMB, up 3.2% year-on-year [1]. - Net profit was 683 million RMB, a decrease of 4.8% year-on-year [1]. Self-Owned Brand Growth - Revenue from self-owned brands (APV) was 1.12 billion RMB, increasing by 71.9% year-on-year [1]. - Growth in Europe and other markets was 88%, while the US market grew by 20.6% [1]. Cost Management - Distribution and sales expenses increased, with ratios at 7.4%, while administrative expenses were at 6.7% and R&D expenses at 15.1% [1]. - Year-on-year changes in expense ratios were +3.3pp for distribution and sales, -2.4pp for administrative, and +3.1pp for R&D [1]. ODM Segment Performance - Revenue from the ODM segment was 3.92 billion RMB, with a 16% decline in Europe and a 9.8% decline in the US, while China saw a 41.4% increase [1]. Innovation and Product Development - The company launched the MOYAL brand in the beauty aerosol sector and developed devices for asthma and COPD medication delivery [2].

证券研究报告 | 半年报点评 gszqdatemark 2024 08 21 年 月 日 思摩尔国际（06969.HK） APV 表现靓丽，换弹式恢复稳增，多元结构共驱成长 公司发布 2024H1 财务数据：24H1 实现收入 50.37 亿元（同比-1.7%）， 全面收益总额为 7.25 亿元（同比-1.3%）；单 Q2 我们预计收入约实现 28 亿元（同比约+9%），全面收益总额为 4.15 亿元（同比-3%）。APV 延续 靓丽表现，换弹式稳步复苏，收入逐季改善；盈利略承压主要系研发投入 加大。 自主品牌表现靓丽。2024H1 APV 实现收入 11.16 亿元（同比+71.9%）， 其中欧洲及其他地区/美国分别实现收入 9.29 亿元（同比+88.0%）/1.87 亿元（同比+20.6%），表现靓丽主要系全新数字化运营赋能、高速洞察终 端需求，H1 成功推出爆款 XRO 4，目前自有品牌 Vaporesso 已在开放式 产品中成为市场头部品牌。 换弹业务改善，一次性小烟阶段性承压。2024H1 代工业务实现收入 39.22 亿元（同比-12.3%），分地区来看： 美国：H1 代工实现 18.58 亿元 ...

Investment Rating - The report maintains a "Buy" rating for Smoore International (06969) with a target price of 8.54 HKD, indicating a potential upside of over 20% [1]. Core Insights - The company reported a revenue of 5.037 billion HKD for the first half of 2024, a year-on-year decrease of 1.7%, and a net profit of 683 million HKD, down 4.8% year-on-year [1]. - The retail customer sales segment (APV) saw a significant revenue increase of 71.9% year-on-year, driven by strong performance in Europe and other markets, while the enterprise customer sales segment (ODM) experienced a decline of 12.3% [1]. - The company is focusing on expanding its product range and reducing costs, which has positively impacted its gross margin, which increased by 1.8 percentage points to 38.0% [1]. Revenue Breakdown - For 2024H1, the revenue from retail customer sales (APV) was 1.116 billion HKD, accounting for 22.1% of total revenue, while enterprise customer sales (ODM) generated 3.922 billion HKD, making up 77.9% of total revenue [1]. - The sales distribution by region shows that Europe and other markets accounted for 45.4% of total sales, followed by the US at approximately 36.9%, with a year-on-year decline of 3.3 percentage points [1]. Research and Development - The company increased its R&D expenditure to 760 million HKD in 2024H1, representing a year-on-year growth of 23.7%, which constitutes 15.1% of total revenue [1]. - Significant investments were made in the development of new products, including the launch of the MOYAL brand and innovative vaping solutions [1]. Profit Forecast and Investment Advice - The report projects net profits for 2024-2026 to be 1.675 billion HKD, 2.152 billion HKD, and 2.603 billion HKD respectively, reflecting year-on-year growth rates of 1.82%, 28.48%, and 20.94% [1]. - The report emphasizes the company's competitive advantages in the vaping technology sector and suggests that the tightening regulations will benefit leading brands like Smoore [1].

Investment Rating - The report maintains an "Accumulate" rating for Smoore International (6969) [2][4]. Core Insights - The company's performance meets expectations, with significant growth in its proprietary brand segment. The report forecasts net profit for 2024-2026 to be 1.65 billion, 1.92 billion, and 2.23 billion RMB respectively, with corresponding PE ratios of 29, 25, and 22 times [4]. - The market trend is shifting, with proprietary brands showing impressive performance. In H1 2024, revenue from proprietary brands increased by 71.9% year-on-year to 1.11 billion RMB, with notable growth in the US (20.6%) and Europe/other regions (88.0%) [4]. - The company is expected to benefit from changes in the regulatory environment, with a focus on compliant products. The report highlights the ongoing crackdown on non-compliant products in the US and the UK, which may favor leading brands with strong compliance capabilities [4]. Financial Summary - Revenue for 2024 is projected at 12.42 billion RMB, with a growth rate of 11%. The net profit for 2024 is estimated at 1.65 billion RMB, reflecting a slight increase of 1% [6]. - The gross profit margin improved due to a higher proportion of high-margin proprietary brands and cost reduction initiatives. R&D expenses increased by 3.1 percentage points to 12.0% of revenue, reflecting investments in new product development [4]. - The company’s management efficiency has significantly improved, with a reduction in management fees by 2.4 percentage points to 6.7% of revenue, attributed to cost control measures and enhanced budget management [4].