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].

各项业务渐进良性通道，费用拖累业绩释放节奏 2024 年 08 月 20 日 ➢ 事件。思摩尔国际发布 24 半年度业绩公告，2024H1 实现收入/税后利润/ 调期内综合收益总额 50.37/6.83/7.25 亿元(同降 1.67%/4.76%/1.3%)，24Q2 实现调期内综合收益总额 4.15 亿元(同降 5.95%)。 ➢ 一次性产品承压&自主品牌产品放量&换弹式环比显著改善。2024H1 收入 同降 2%至 50 亿元：分客户：上半年面向企业客户/面向零售客户收入同比变动 -12.3%/+71.9%至 39.22/11.16 亿元；分产品：1）换弹产品收入同比个位数下 滑，不过伴随全球监管收紧，换弹产品收入呈现逐季改善势头，单 Q2 收入美国 同增 6.5%，欧洲同增 22.5%；2）自主品牌：加强数字化营销+新产品迭代（上 半年推出 XRO 4），自主品牌业务同比增长 72%至 11.16 亿元，占收入比重达 22%；3）一次性产品：同降 19%至 12.17 亿元，主要受制于欧洲一次性电子烟 监管升级；4）特殊雾化产品料仍有压力，主因上半年公司推动业务组织架构调 整，且渠道建设仍处于布局期， ...

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected price increase of over 15% in the next 6-12 months [2][5]. Core Insights - The company's H1 2024 revenue and net profit decreased by 1.7% and 4.8% year-on-year, reaching 5.04 billion and 680 million RMB, respectively, which is in line with expectations [2]. - The self-owned brand business is experiencing rapid growth, with Q2 2024 sales of pod-based products showing positive signals. ODM revenue decreased by 12.4% to 3.92 billion RMB, while OBM revenue increased by 71.9% to 1.12 billion RMB [2]. - The gross margin for H1 2024 improved by 1.8 percentage points to 38.0%, driven by an increase in OBM revenue proportion and ongoing cost reduction efforts [2]. - The company is increasing R&D investment in medical and heated non-combustible products, with R&D expense ratio rising by 3.1 percentage points to 15.1% [2]. Financial Performance Summary - Revenue for 2024 is projected to be 12.113 billion RMB, with a growth rate of 8.46% [3]. - Net profit for 2024 is expected to be 1.667 billion RMB, reflecting a growth rate of 1.33% [3]. - The diluted EPS for 2024 is estimated at 0.27 RMB, with corresponding P/E ratios of 30, 26, and 23 for 2024, 2025, and 2026, respectively [2][3].

Financial Performance - For the six months ended June 30, 2024, the company reported revenue of RMB 5,037,242 thousand, a decrease of approximately 1.7% compared to RMB 5,122,862 thousand in the same period last year[5]. - Gross profit for the same period was RMB 1,914,597 thousand, reflecting a growth of 3.2% year-on-year, with a gross margin of 38.0%, up 1.8 percentage points from 36.2%[5]. - The company achieved a profit before tax of RMB 811,555 thousand, an increase of 1.9% compared to RMB 796,170 thousand in the previous year[5]. - Net profit for the period was RMB 683,198 thousand, down 4.8% from RMB 717,342 thousand year-on-year, resulting in a net profit margin of 13.6%[5]. - The total revenue for the group during the review period was approximately RMB 5,037,242 thousand, a decrease of about 1.7% compared to RMB 5,122,862 thousand in the same period last year[39]. - The comprehensive income for the period was approximately RMB 724,597 thousand, a decrease of about 1.3% compared to RMB 734,356 thousand in the same period last year[39]. - The group reported a segment profit of RMB 820,065 thousand, a slight increase of 2.47% from RMB 802,075 thousand in the previous year[100]. - The company reported a net profit of RMB 683,198 thousand for the period, down 4.8% from RMB 717,342 thousand in the same period last year[84]. Assets and Liabilities - The total assets increased by 4.0% to RMB 26,540,994 thousand as of June 30, 2024, compared to RMB 25,508,284 thousand at the end of 2023[5]. - As of June 30, 2024, the group's current assets net value was approximately RMB 13,861,870 thousand, down from RMB 16,004,419 thousand as of December 31, 2023[65]. - The group's asset-liability ratio was approximately 24.5% as of June 30, 2024, compared to 19.1% as of December 31, 2023[68]. - The group had no bank or other financial institution borrowings as of June 30, 2024, consistent with the previous year[67]. Cash Flow and Expenditures - Cash and cash equivalents rose by 22.6% to RMB 6,534,871 thousand, up from RMB 5,332,076 thousand[5]. - Operating cash flow for the six months ended June 30, 2024, was RMB 602,829 thousand, a decline of 43.7% from RMB 1,072,440 thousand in 2023[89]. - Capital expenditures for the six months ended June 30, 2024, totaled approximately RMB 282,315 thousand, significantly lower than RMB 560,670 thousand in the same period of 2023[15]. - The group had capital commitments of approximately RMB 395,328 thousand, down from RMB 494,304 thousand as of December 31, 2023[78]. Revenue Breakdown - Revenue from the self-owned brand business was approximately RMB 1,115,607 thousand, representing a growth of about 71.9% compared to RMB 648,852 thousand in the same period last year[41]. - Revenue from enterprise customer sales was approximately RMB 3,921,635 thousand, a decrease of about 12.3% from RMB 4,474,010 thousand in the same period last year[43]. - Revenue from the European and other markets reached approximately RMB 928,687 thousand, with a year-on-year growth of about 88.0%[13]. - In the U.S. market, revenue was approximately RMB 1,858,160 thousand, a decrease of about 9.8% year-on-year, accounting for approximately 36.9% of total revenue[15]. - Revenue from the company's disposable electronic vapor products decreased by approximately 18.9% year-on-year to about RMB 1,217,423 thousand[16]. - Revenue from electronic vapor products and components (excluding APV) was RMB 3,921,635 thousand, down 12.34% from RMB 4,474,010 thousand in 2023[98]. - APV revenue increased significantly to RMB 1,115,607 thousand, up 71.93% from RMB 648,852 thousand in 2023[98]. Research and Development - The company has over 1,400 R&D personnel and significantly higher R&D investment compared to peers, ensuring long-term healthy growth[19]. - Research and development expenditure for the first half of 2024 totaled approximately RMB 760.1 million, representing a year-on-year increase of 23.7%, and accounting for about 15.1% of revenue, up from 12.0% in the same period last year[25]. - Research and development expenses grew by approximately 23.7% to RMB 760,112 thousand, increasing from 12.0% to 15.1% of total revenue, reflecting increased investment in nebulization medical and heat-not-burn product areas[56]. - The company’s employee compensation and benefits in R&D rose by approximately 23.6% to RMB 477,901 thousand, accounting for 9.5% of total revenue, due to increased salaries for R&D personnel in the nebulization medical field[56]. Market Expansion and Product Development - The company launched several new products during the review period, including the world's first 20,000 puff high-explosion dual-core disposable solution, enhancing user experience and nicotine delivery efficiency[8]. - The company is expanding its international market presence, operating six distribution centers in Europe and the United States as of June 30, 2024, to enhance global operational capabilities[10]. - The company is actively expanding its international market presence and localizing its product and sales systems to meet diverse consumer needs[13]. - The company plans to launch the MOYAL brand and its first generation of aerosol beauty products in Q1 2024, which will be the industry's first to achieve high-viscosity skincare essence aerosolization[22]. - In the medical field, the company has developed several drug delivery devices for asthma and COPD, with products receiving recognition from European and American regulatory authorities[23]. Compliance and Regulatory - The company is focusing on compliance and safety in the U.S. market, with a gradual recovery expected in its performance due to strengthened regulatory enforcement[15]. - The company aims to enhance its compliance operations to support customer market expansion amid increasing regulatory scrutiny in the electronic vapor market[29]. - The company has implemented cost reduction and efficiency improvement measures, resulting in a significant decrease in administrative expenses during the review period[10]. Other Financial Metrics - The group's financing costs were approximately RMB 18,512 thousand, representing an increase of about 68.6% from RMB 10,980 thousand in the same period last year[61]. - Income tax expenses for the group were approximately RMB 128,357 thousand, an increase of about 62.8% from RMB 78,828 thousand in the same period last year[62]. - The group recognized government grants amounting to RMB 57,955 thousand, an increase from RMB 35,096 thousand in 2023[107]. - The interim dividend declared for the six months ended June 30, 2024, is HKD 0.05 per share, totaling approximately HKD 308,888,000[122].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The FDA recently approved seven electronic cigarette products for sale in the U.S. market, all under the Vuse Alto brand, including six tobacco-flavored products and one electronic cigarette device [2] - The approval of Vuse tobacco-flavored products is significant as it indicates the FDA's recognition of their reduced harm potential compared to traditional cigarettes, suggesting that the benefits of switching to these products may outweigh the risks to youth [2] - The company is expected to benefit from its strong partnership with BAT, which has already seen multiple products approved under the PMTA process, positioning the company to capture a larger market share as regulatory scrutiny increases [2] - The company is diversifying its business across various sectors, including electronic vaporization, heated non-combustion, and medical vaporization, and has returned to positive profit growth with a net profit of 310 million yuan in Q1 2024, a year-on-year increase of 5.6% [2] Financial Projections - The company is projected to achieve a net profit of 1.8 billion, 2.08 billion, and 2.47 billion yuan for the years 2024, 2025, and 2026, respectively, with corresponding PE ratios of 27, 23, and 20 times [3] - Revenue is expected to grow from 12.19 billion yuan in 2024 to 15.33 billion yuan in 2026, reflecting a compound annual growth rate [4] - The company's net profit margin is projected to improve from 14.73% in 2023 to 16.08% in 2026, indicating enhanced profitability [6]

Investment Rating - The report maintains a "Buy" rating for Smoore International (06969) with a target price of HKD 12.00, indicating a potential upside from the current price of HKD 9.95 [1]. Core Views - The approval of four menthol-flavored e-cigarette products by the FDA marks a significant policy shift, as it is the first time non-tobacco flavored e-cigarettes have received PMTA authorization [1]. - Smoore International is expected to benefit from the compliance market development, as it supplies all NJOY LLC approved products and has been involved in the production of multiple other approved products [1]. - The menthol-flavored e-cigarettes are popular in the U.S. market, accounting for approximately 30% of the total e-cigarette shipment volume and about 50% of the pod-based product shipments, which is expected to drive sales growth for Smoore [1]. Summary by Sections Company Overview - Smoore International is a global leader in providing aerosol technology solutions, with a focus on the e-cigarette market [1]. - The company has a total share capital of 6,137.70 million shares and a market capitalization of 61,070.10 million HKD [1]. Recent Developments - On June 24, Smoore announced that four non-tobacco flavored e-cigarette products from its client NJOY received PMTA authorization from the FDA [1]. - This is the first FDA approval for menthol-flavored e-cigarettes, indicating a recognition of their safety and paving the way for compliant companies to benefit in the future [1]. Financial Projections - The report forecasts Smoore's net profit for 2024-2026 to be 16.64 billion, 20.71 billion, and 24.62 billion HKD, respectively, with year-on-year growth rates of 1.16%, 24.46%, and 18.88% [1].

Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 9.39 HKD per share based on a 30x PE valuation for 2024 [4]. Core Views - The FDA has approved NJOY's menthol-flavored e-cigarettes for sale in the U.S., which includes four products from NJOY, a key customer of the company [3]. - The approval of menthol flavors is expected to alleviate policy concerns for the company, as menthol flavors account for 27.8% of the U.S. e-cigarette market and 61.0% of the pod-based e-cigarette market [3]. - The approval of NJOY's main products is likely to benefit the company, given its deep and stable partnership with NJOY, which is supported by Altria's financial and channel backing [3]. - There is a possibility of the marketing denial order (MDO) for British American Tobacco's menthol products being revoked, based on the recent approval of NJOY's menthol products [3]. - Regulatory enforcement on non-compliant disposable products is expected to tighten, as most disposable e-cigarettes have not passed the PMTA [3]. - The company forecasts a recovery in domestic markets and stable overseas markets, with expected net profits of 1.74 billion, 2.15 billion, and 2.55 billion RMB for 2024-2026 [3]. Financial Summary - The company's revenue for 2022 was 12,145 million RMB, with a projected decline of 11.7% in 2023, followed by a recovery with a growth rate of 15.2% in 2024 [6]. - The net profit for 2022 was 2,510 million RMB, with a significant decline of 52.5% year-on-year, and a projected net profit of 1,645 million RMB for 2023 [6]. - The earnings per share (EPS) for 2022 was 0.41 RMB, expected to decrease to 0.27 RMB in 2023, with a gradual recovery to 0.42 RMB by 2026 [6]. - The company’s EBITDA for 2022 was 2,585 million RMB, with a forecasted decline to 1,731 million RMB in 2023 [6].

Investment Rating - The report maintains a "Buy-A" investment rating for the company, with a target price of HKD 12.12, while the current stock price is HKD 9.37 [1]. Core Insights - The report highlights that the company's performance is expected to improve in the medium to long term, driven by the growth of new products and a recovery in the market [6]. - The FDA's recent approval of menthol-flavored e-cigarettes marks a significant shift in regulatory stance, which is anticipated to benefit the company as it is a key supplier to NJOY, a major client [3][4]. - The company has demonstrated confidence in its growth prospects through active share buybacks, having repurchased 78.66 million shares, representing 1.28% of total shares, for a total expenditure of HKD 665 million [6]. Financial Summary - The company is projected to achieve revenues of CNY 123.57 billion, CNY 140.24 billion, and CNY 157.02 billion for the years 2024, 2025, and 2026, respectively, reflecting year-on-year growth rates of 10.65%, 13.49%, and 11.96% [6][8]. - Adjusted net profits are expected to be CNY 16.94 billion, CNY 18.91 billion, and CNY 21.64 billion for the same years, with corresponding growth rates of 0.95%, 11.64%, and 14.43% [6][8]. - The report indicates a projected PE ratio of 36.6x for 2024, decreasing to 30.0x by 2026, suggesting a favorable valuation trend [6][8]. Market Dynamics - The report notes that the demand for disposable products remains strong in overseas markets, and the company is actively launching innovative products to enhance its market share [4]. - Regulatory changes in the UK, which plan to ban disposable e-cigarettes by April 2025, are expected to favor the company's pod-based products, potentially leading to a market shift [4]. - The FDA's increased enforcement against illegal e-cigarette sales is seen as a positive for established players like the company, which have products already approved [6].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The FDA has recently approved four menthol-flavored e-cigarettes from NJOY, marking the first approval of flavored e-cigarettes beyond tobacco in the U.S. This indicates a clearer regulatory direction and potential benefits for compliant products [2] - The approval of menthol-flavored e-cigarettes is expected to create new opportunities for other brands to gain approval, particularly in the disposable and pod-based product segments [2] - The company, Smoore International, is positioned well in the e-vapor market, having achieved a net profit of 310 million yuan in Q1 2024, a year-on-year increase of 5.6%, indicating a return to positive growth [2] - The company is expected to see a net profit of 1.8 billion, 2.08 billion, and 2.47 billion yuan for the years 2024, 2025, and 2026 respectively, with corresponding P/E ratios of 29, 25, and 21 [3] Financial Summary - The company's revenue for 2024 is projected to be 12.19 billion yuan, with a growth rate of 9.17% [6] - The net profit for 2024 is estimated at 1.8 billion yuan, reflecting a growth rate of 9.17% [6] - The company's total assets are expected to grow from 25.51 billion yuan in 2023 to 32.17 billion yuan by 2026 [5] - The company's earnings per share (EPS) is projected to increase from 0.27 yuan in 2023 to 0.40 yuan in 2026 [6]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The FDA has revoked the marketing ban on Juul, shifting its status to pending review, which allows Juul products to continue selling in the U.S. until the PMTA approval process is completed. This is expected to benefit the market share of pod-based products as the FDA increases regulation on disposable products [5] - The company is positioned as a leading global manufacturer in the vaping industry, with diversified operations in electronic vaporization, heated non-combustion products, special-purpose vaporization, and medical vaporization. The company has seen steady growth in disposable products and improved profitability [5] - The company achieved a net profit of 310 million yuan in Q1 2024, marking a year-on-year increase of 5.6%, indicating a return to positive growth [5] - The company is expected to maintain a strong growth trajectory in the long term, driven by its innovative product offerings and market insights [5] Financial Data Summary - Closing price (HKD): 8.87 [2] - Circulating shares (billion): 6.138 [2] - Net asset per share (HKD): 3.42 [2] - Projected net profit for 2024-2026: 1.8 billion, 2.09 billion, and 2.47 billion yuan respectively, with corresponding PE ratios of 22, 19, and 16 [5] - Revenue growth rates for 2024-2026 are projected at 9.17%, 13.03%, and 11.27% respectively [6][8] - The company’s ROE is expected to improve from 7.68% in 2023 to 8.99% in 2026 [8]