业绩简评 3月 18 日，公司发布2023 年业绩公告，2023 年收入/净利润分别 同比-8.0%/-34.5%至 111.7/16.5 亿元，H2 收入/净利润分别同比 -6.9%/-17.6%，整体业绩基本符合预期。 经营分析 中国市场承压，一次性烟+APV推动欧美市场延续增长：分业务来 看，公司 ODM/APV 收入分别同比-12.7%/+26.0%至 93.2/18.5 亿 元。ODM 业务方面，1）中国市场全年收入同比-92.7%至 1.6 亿元 （已剔除出口转运影响），H1/H2 收入分别同比-96.3%/-81.7%，由 于非法产品扰动H2 环比恢复幅度有限；2）美国市场、欧洲及其他 市场全年收入分别同比+8.2%/8.9%至 40.8/50.7 亿元，其中一次 性烟全年收入同比+74.5%至 33.7 亿元，是欧洲市场增长重要驱动 力。美国、欧洲及其他市场H2 收入分别同比-6.3%/-5.4%，预计主 因换弹式产品销售相对承压。APV 业务方面，美国、欧洲及其他市 主 要财务指标 场全年收入分别同比+8.8%/+31.3%至 3.7/14.8 亿元，H2 收入分别 项目 2022A 202 ...

Investment Rating - The report maintains a "Buy" rating for the company with a current price target of 7.02 HKD [2] Core Insights - The company reported a total revenue of 11.168 billion HKD and a net profit of 1.566 billion HKD for the year 2023, reflecting a decline of 8.04% and 37.21% respectively [2] - The company's market share decreased to 12.41%, down by 5.7 percentage points, with a notable revenue drop in the domestic market due to regulatory changes [2][3] - The overseas market showed resilience, with revenue growth attributed to localized operations and increased enforcement of regulations, particularly in the U.S. market [2][3] Summary by Sections Financial Performance - In Q4 2023, the company achieved revenue of 3.166 billion HKD and a net profit of 372 million HKD, representing a decline of 3.52% and 8.43% year-on-year [2] - The company's gross margin and net margin for 2023 were 38.8% and 14.03%, down by 4.5 and 6.5 percentage points respectively [2][3] - The company’s revenue from corporate clients decreased by 12.7% to 9.321 billion HKD, while retail client revenue increased by 26.0% to 1.847 billion HKD [2] Market Dynamics - The overseas sales accounted for 98.5% of total sales in 2023, with significant growth in the U.S. market where the company holds a leading market share of 42% for its major product line [2][3] - The company has established five overseas warehouses to enhance delivery speed and efficiency [2] Product Development and Strategy - The company is focusing on product innovation, including the launch of new electronic vaporization technologies and a range of differentiated products in the heated tobacco and medical sectors [3] - The report anticipates a gradual recovery in quarterly profits, driven by the introduction of compliant new products and a tightening regulatory environment [3] Future Projections - Forecasts suggest a revenue increase to 12.739 billion HKD in 2024, with a projected net profit of 1.658 billion HKD, indicating a recovery trend [4][7] - The company is expected to maintain a price-to-earnings ratio of 24 in 2024, with gradual improvements in profitability metrics over the next few years [4][7]

证券研究报告 | 年报点评报告 2024年03月19日 思摩尔国际（06969.HK） APV 表现靓丽，多元产品矩阵逐步成型 公司发布2023年财务数据：2023全年实现收入111.68亿元（同比-8.0%），归母 买入（维持） 净利润为15.66亿元（同比-37.2%）；单Q4实现收入31.66亿元（同比-3.5%）， 归母净利润为3.72亿元（同比-11.0%）。收入表现平稳，表观盈利能力下滑主要系 股票信息 一次性小烟占比提高，且加大研发投入。 行业 消费电子产品 自主品牌表现靓丽，ODM略承压。分业务来看，2023年APV实现收入18.47亿元 （同比+26.0%），其中欧洲及其他地区/美国分别实现收入 14.75 亿元（同比 前次评级 买入 +31.3%）/3.72亿元（同比+8.8%），表现靓丽主要系公司坚持本土化运营，推出 3月18日收盘价(港元) 6.56 COSS、ARMOUR等差异化产品系列（具备创新性自动注液、自动充电、更长寿命等 总市值(百万港元) 40,263.30 特性）。2023年代工业务实现收入93.21亿元（同比-12.7%），分地区来看： 总股本(百万股) 6,137.7 ...

Financial Performance - For the fiscal year ending December 31, 2023, the company's revenue was RMB 11,168,422 thousand, a decrease of 8.0% compared to RMB 12,144,980 thousand in 2022[4] - Gross profit for the same period was RMB 4,334,446 thousand, resulting in a gross margin of 38.8%, down from 43.3% in 2022[4] - The company reported a net profit of RMB 1,645,090 thousand, a decline of 34.4% from RMB 2,510,316 thousand in the previous year[4] - The total comprehensive income for the review period was approximately RMB 1,566,470 thousand, down about 37.2% from RMB 2,494,934 thousand in 2022[41] - Basic earnings per share for 2023 were RMB 27.01, down from RMB 41.66 in 2022, reflecting a decrease of 35.4%[85] - The company reported a significant increase in inventory provision costs, which rose to RMB 61,176 thousand in 2023 from RMB 8,791 thousand in 2022[129] Market Performance - The company maintained a market share of approximately 13.7% in the global electronic vaporizer equipment market, down from 18.1% in 2022[11] - Revenue from the mainland China market was approximately RMB 163,008 thousand, a significant decline of about 92.7%, accounting for approximately 1.5% of total revenue[19] - Revenue from overseas markets increased by approximately 11.2% to RMB 11,005,414 thousand, rising to approximately 98.5% of total revenue[16] - In the U.S. market, revenue from enterprise customers reached approximately RMB 4,083,779 thousand, an increase of about 8.2%, representing approximately 36.6% of total revenue[17] - Revenue from Europe and other regions increased by approximately 17.9% to RMB 5,065,271 thousand, representing about 45.4% of total revenue[46] Research and Development - The company continues to focus on research and development in electronic vaporization products, enhancing its R&D management system to improve efficiency[7] - The total R&D expenditure amounted to approximately RMB 1,482,846 thousand, representing an increase of about 8.1% compared to the previous year, with the percentage of revenue rising from approximately 11.3% to about 13.3%[28] - The company has over 1,400 R&D personnel and significantly higher R&D investment compared to peers, ensuring long-term growth and innovation[23] - The company has filed a total of 2,033 new patent applications globally during the review period, including 1,172 invention patents, bringing the cumulative total to 7,695 patents, of which 3,867 are invention patents[28] - The introduction of a digital management system for new product development has significantly improved the efficiency and effectiveness of R&D resource allocation[28] Cost Management - The company has implemented cost reduction strategies, resulting in a significant decrease in administrative expenses during the review period[9] - Distribution and sales expenses increased from approximately RMB 387,671 thousand to about RMB 526,238 thousand, a growth of approximately 35.7%, accounting for about 4.7% of revenue[53] - Administrative expenses decreased from approximately RMB 1,147,916 thousand to about RMB 867,154 thousand, a decline of approximately 24.5%, accounting for about 7.8% of revenue[54] - Total employee costs accounted for approximately 23.0% of the group's revenue in 2023, down from 25.0% in 2022, due to improved operational efficiency[78] Corporate Governance - The board of directors consists of eight members, including three independent non-executive directors, exceeding the one-third requirement set by listing rules[148] - The board has recommended a final dividend of HKD 0.05 per ordinary share for the year ending December 31, 2023, pending approval at the upcoming annual general meeting[158] - The company has adopted a dividend policy that considers its financial condition and other relevant factors before declaring dividends[158] - The audit committee has been established in accordance with the listing rules, consisting of three independent non-executive directors, with Mr. Zhong Shan as the chairman[171] - The board is committed to maintaining high standards of corporate governance and has reviewed the effectiveness of its governance structure[150] Future Outlook - The global electronic vaporization product market is projected to reach approximately $19.86 billion by 2028, with a compound annual growth rate (CAGR) of about 11.5% from 2023 to 2028[32] - The company plans to launch a new oil cartridge-based closed product in the European market in 2024, which has successfully obtained TPD compliance certification[33] - The company aims to enhance production management levels in 2024 to reduce manufacturing costs and improve product competitiveness[38] - The company will continue to invest in R&D across electronic vaporization, heated tobacco, and medical vaporization products to maintain its leading position in these sectors[37] - The company is committed to optimizing supply chains and production processes to shorten order delivery cycles and improve delivery efficiency[38]

Financial Performance - The group's revenue and profit experienced a decline during the first half of 2023 due to a rapidly changing market and external environment[12]. - The company's revenue for the first half of 2023 was RMB 5,122,862 thousand, a decrease of 9.4% compared to RMB 5,653,321 thousand in 2022[27]. - Gross profit for the same period was RMB 1,855,370 thousand, reflecting a decline of 31.4% from RMB 2,705,607 thousand in the previous year[27]. - The pre-tax profit dropped by 52.5% to RMB 796,170 thousand from RMB 1,675,965 thousand in 2022[27]. - The net profit for the period was RMB 717,342 thousand, down 48.2% from RMB 1,384,690 thousand in the prior year[27]. - The adjusted net profit margin decreased to 14.8%, down 10.6 percentage points from 25.4% in 2022[27]. - Total comprehensive income for the period decreased by 46.9% from RMB 1,384,101 thousand to RMB 734,356 thousand[90]. - Basic earnings per share decreased to RMB 11.81 from RMB 23.08, reflecting a drop of 48.9% year-on-year[173]. Market and Product Development - The company launched the upgraded FEELM Max ceramic atomization core technology platform, achieving significant shipment volumes while meeting compliance requirements[14]. - The company is focusing on four strategic areas: electronic atomization products, heat-not-burn products, special-purpose atomization products, and atomization in healthcare[14]. - The company plans to introduce more differentiated disposable innovative products to overseas markets in the second half of 2023, aiming to drive revenue growth[18]. - The company is committed to expanding the application of atomization technology in healthcare, collaborating with leading companies in the respiratory drug field[14]. - The company aims to diversify its revenue across different countries and regions while expanding its product portfolio and applications of aerosol technology in healthcare[40]. - The company plans to launch more innovative products in the special-purpose aerosol market to enhance competitiveness[19]. Research and Development - The company's R&D expenditure totaled RMB 614.724 million, representing a 1.8% increase compared to the same period last year[41]. - Research and development in the aerosol medical field is progressing steadily, with plans to continue development of pharmaceutical projects in the second half of 2023[19]. - The company aims to leverage its R&D capabilities and management improvements to navigate industry changes and deliver greater returns to shareholders[19]. - The R&D spending for electronic nicotine delivery systems (including electronic vapor products and heated non-combustible products) accounted for approximately 68.1% of total R&D expenditure, down from 82.4% year-on-year[47]. - The company has filed a total of 1,154 new patent applications globally during the review period, including 684 invention patents, bringing the cumulative total to 6,816 patents, with 3,379 being invention patents[44]. Regulatory Environment - The introduction of the "E-cigarette Management Measures" in mainland China has led to a prohibition on the sale of flavored e-cigarettes, impacting short-term sales[33]. - The FDA has issued marketing denial orders (MDO) for over 100,000 non-tobacco and non-menthol flavored ENDS products, affecting market dynamics in the US[35]. - The revised Import and Export (Amendment) Ordinance in Hong Kong allows for the transit of alternative smoking products, which may influence market operations[37]. - The company continues to monitor global regulatory developments to ensure compliance and adapt its R&D and production activities accordingly[40]. Operational Efficiency - Management expenses decreased during the review period as part of cost reduction and efficiency improvement initiatives[17]. - The company is optimizing its supply chain management and strengthening local warehousing to improve customer service experience[15]. - The company has adopted agile modular production to meet the rapidly changing market demand for disposable electronic vapor products, significantly improving production efficiency and delivery capabilities[51]. - The company aims to enhance production operations management to improve customer service responsiveness and supply chain management to strengthen cost control capabilities[67]. Market Trends - The company believes that the electronic atomization product market is in a phase of low penetration and steady growth, with opportunities arising from clearer regulatory policies[18]. - In the US market, the market share of disposable e-cigarettes increased from 24.7% in January 2020 to 51.8% in December 2022, according to the CDC[33]. - The global electronic vaporization equipment market is projected to reach approximately USD 23,413.9 million by 2027, with a compound annual growth rate (CAGR) of 18.5% from 2022 to 2027[62]. - The global heated tobacco product market is expected to reach approximately USD 16,600 million by 2027, also with a CAGR of 18.5% during the same period[63]. - The global market for pulmonary drugs and drug delivery devices is estimated to reach approximately USD 56 billion in 2022, with expectations to grow to about USD 93.3 billion by 2030[66]. Shareholder and Corporate Governance - The board of directors consists of eight members, including three independent non-executive directors, ensuring sufficient checks and balances[109]. - The audit committee, led by independent non-executive director Zhong Shan, reviews the group's financial and accounting practices, risk management, and internal controls[112]. - The company has established an internal audit mechanism to independently assess the effectiveness of its risk management and internal control systems[116]. - The company has committed to ongoing professional training for all directors to enhance their knowledge and skills in corporate governance[120]. - The remuneration committee is responsible for recommending overall remuneration policies for directors and senior management, ensuring competitiveness and fairness[113]. Cash Flow and Liquidity - Cash and cash equivalents increased by 29.1% to RMB 12,605,378 thousand from RMB 9,762,933 thousand[31]. - The current ratio improved to 639.3% from 534.9% as of December 31, 2022[91]. - The company reported a significant increase in cash inflow from short-term deposits, with RMB 7,052,638 thousand withdrawn during the six months ended June 30, 2023, compared to RMB 3,048,345 thousand in the previous year[181]. - The company’s financing activities resulted in a net cash outflow of RMB 537,990 thousand for the six months ended June 30, 2023, compared to a net cash inflow of RMB 460,937 thousand in the same period of 2022[181]. Employee Compensation and Stock Options - Employee compensation and benefits rose by 54.7% from RMB 70,117 thousand to RMB 108,439 thousand, representing 2.1% of revenue, up from 1.2%[83]. - The company has a significant number of stock options, with 3,520,000 options granted to non-director employees[140]. - The total number of stock options exercised during the six months ended June 30, 2023, was 2,917,000[140]. - The company continues to manage its stock option plan actively, reflecting its commitment to employee incentives and retention strategies[140].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負責，對其準確性或完整性亦不 發表任何聲明，並明確表示，概不對因本公告全部或任何部分內容而產生或因倚賴該等內容而引致之任何損 失承擔任何責任。 Smoore International Holdings Limited 思 摩 爾 國 際 控 股 有 限 公 司 （於開曼群島註冊成立的有限公司） （股份代號：6969） 截至2023年6月30日止 6個月中期業績公告 思摩爾國際控股有限公司（「本公司」）董事（「董事」）會（「董事會」）欣然公佈本公司及其附屬 公司（統稱「本集團」）截至2023年6月30日止6個月（「回顧期」）的未經審核綜合業績。本公司 獨立核數師德勤‧關黃陳方會計師行（執業會計師）已根據香港會計師公會頒佈的香港審閱 委聘準則第2410號「由實體之獨立核數師審閱中期財務資料」審閱本集團截至2023年 6月30日止6個月的未經審核簡明綜合中期財務資料。此外，該等中期業績亦由本公司審核 委員會（「審核委員會」）審閱。 ...

Financial Performance - Smoore reported a revenue of approximately 1.2 billion HKD for the fiscal year 2022, representing a year-over-year increase of 15%[2]. - The company achieved a net profit margin of 25%, with net profit reaching around 300 million HKD, up from 240 million HKD in the previous year[2]. - Total revenue for the year ended December 31, 2022, was RMB 12,144,980 thousand, a decrease of 11.7% compared to RMB 13,755,242 thousand in 2021[5]. - Gross profit for 2022 was RMB 5,259,632 thousand, resulting in a gross margin of 43.3%, down from 53.6% in 2021[5][7]. - Net profit for the year was RMB 2,510,316 thousand, a decline of 52.5% from RMB 5,286,967 thousand in 2021[5]. - Adjusted net profit for 2022 was RMB 2,575,122 thousand, reflecting a decrease of 52.7% compared to RMB 5,442,613 thousand in 2021[5][6]. - The adjusted net profit margin for 2022 was 21.2%, down from 39.6% in 2021[7]. - Total comprehensive income for the year was RMB 2,494,934 thousand, down 52.8% from RMB 5,286,991 thousand in 2021[77]. Market Expansion and Strategy - Smoore plans to expand its market presence in Europe and North America, targeting a 30% increase in market share by 2025[2]. - Future guidance estimates revenue growth of 10-15% for the next fiscal year, driven by new product launches and market expansion[2]. - The company is exploring potential acquisitions to enhance its product portfolio and market reach, with a budget of 200 million HKD allocated for this purpose[2]. - The company aims to reduce production costs by 5% through operational efficiencies and supply chain optimization[2]. - The company is focusing on expanding its product line in the special-purpose vaporization products sector to increase market share[17]. Research and Development - The company is investing 100 million HKD in R&D for new product development, focusing on innovative vaping technologies[2]. - The company increased R&D investment, achieving significant breakthroughs in core technologies, particularly in heated tobacco products and new heating element technologies[12]. - R&D expenditure totaled RMB 1,372,258 thousand, an increase of 104.6% year-on-year, representing 11.3% of revenue compared to 4.9% the previous year[45]. - The company expanded its R&D team by over 320 personnel, bringing the total to over 1,500, which is more than 40% of the total non-production staff[43]. - The company launched a new generation ceramic core technology platform, FEELM Max, which outperforms competitors in vaporization efficiency and user experience[44]. Regulatory Environment - The company is actively monitoring ongoing legal challenges related to MDOs issued by the FDA, with some being temporarily stayed by federal courts[20]. - The company is preparing for compliance with the new electronic cigarette management regulations that took effect on May 1, 2022[23]. - The company has obtained tobacco monopoly licenses and supported brand clients in submitting electronic vapor product technical reviews compliant with national standards as of March 11, 2022[23]. - The national standard for electronic cigarettes (GB 41700-2022) was officially released on April 8, 2022, and will be implemented starting October 1, 2022[25]. Corporate Governance - The company adhered to the corporate governance code and complied with all provisions, except for a deviation from the code's C.2.1[105]. - The board of directors is composed of a balanced mix of executive and independent non-executive directors, ensuring strong independence and effective judgment[106]. - The company has established an Environmental, Social, and Governance (ESG) committee as of December 28, 2022[114]. - The board has committed to holding at least four regular board meetings annually, approximately once per quarter[114]. Employee and Management - The group has over 14,787 employees in mainland China, 9 in Hong Kong, and 1,577 overseas as of December 31, 2022[87]. - The group established the "Simor Academy" for continuous professional and management training for employees, including a 6-month onboarding program for new graduates[88]. - The company has a strong management team with over 10 years of experience in the electronic vaporization industry, led by the CEO who has been instrumental in the company's strategic direction[194]. Shareholder Engagement and Dividends - The company plans to declare a final dividend of HKD 0.08 per ordinary share for the year ended December 31, 2022[6]. - The annual general meeting is scheduled for May 25, 2023, to approve the proposed dividend and other matters[153]. - The company’s board believes that the share buyback plan reflects confidence in the long-term strategy and growth of the company[155]. Financial Health and Assets - Total assets as of December 31, 2022, amounted to RMB 24,359,317 thousand, an increase from RMB 22,871,306 thousand in 2021[5]. - Current assets reached RMB 19,198,773 thousand, up from RMB 17,985,772 thousand in 2021, with a current ratio of 534.9%[5][7]. - The debt-to-asset ratio for 2022 was 16.3%, slightly up from 15.8% in 2021, indicating stable financial leverage[7]. Sales and Revenue Trends - Revenue from sales to overseas corporate clients increased by approximately 6.5%, while revenue from sales to overseas retail clients rose by 26.2% compared to the previous year[34]. - In the US market, sales revenue from electronic vapor products decreased by 22.7% year-over-year, accounting for 31.1% of total revenue, down from 35.5%[38]. - Revenue from disposable electronic vapor products reached RMB 1,931,028 thousand, a growth of 1,919.2% compared to RMB 95,634 thousand in 2021[41]. - Revenue from retail customer products grew by 26.2% year-over-year, totaling RMB 1,465,608 thousand, with the second half of the year showing a 28.3% increase[42].

Financial Performance - For the year ended December 31, 2022, the total revenue was RMB 12,144,980, a decrease of 11.7% compared to RMB 13,755,242 in 2021[2] - The adjusted net profit for 2022 was RMB 2,575,122, reflecting a decline from RMB 5,442,613 in 2021[3] - The gross profit margin for 2022 was 43.3%, down from 53.6% in 2021[2] - The total revenue for the group was RMB 12,144,980 thousand, a decrease of 11.7% compared to RMB 13,755,242 thousand in 2021[22] - Gross profit for the period was RMB 5,259,632 thousand, down 28.7% from RMB 7,377,039 thousand in 2021, resulting in a gross margin of 43.3%[22] - Adjusted net profit decreased by 52.7% to RMB 2,575,122 thousand from RMB 5,442,613 thousand in 2021, primarily due to a decline in sales revenue from enterprise customers and increased expenses[22] - The net profit for the year was RMB 2,510,316 thousand, a decline of 52.5% from RMB 5,286,967 thousand in 2021[58] Revenue Breakdown - Export revenue accounted for 81.5% of total revenue, significantly increasing from 66.0% in 2021, with a notable rise in the second half of the year[8] - Sales revenue in the U.S. market decreased by 22.7%, with its share of total revenue dropping from 35.5% to 31.1%[9] - In the European market, sales revenue increased by 53.4%, rising from 22.1% of total revenue to 38.3%[10] - Revenue from enterprise customers decreased to RMB 10,679,372 thousand, a decline of 15.2% compared to RMB 12,593,523 thousand in 2021, primarily due to regulatory impacts in the US and China[24] - Revenue from retail customers increased to RMB 1,465,608 thousand, representing a growth of approximately 26.2% from RMB 1,161,719 thousand in 2021, driven by strong R&D capabilities and successful new product launches[25] Research and Development - The total R&D expenditure amounted to RMB 1,372,258 thousand, representing a 104.6% increase year-on-year, and accounting for 11.3% of revenue, up from 4.9% the previous year[13] - The group added over 320 R&D personnel during the review period, bringing the total to over 1,500, which is more than 40% of the total non-production staff[12] - The group established 7 new research institutes focusing on new materials, medical research, and health and beauty applications of atomization technology[12] - The group has applied for a total of 5,662 patents globally, including 2,695 invention patents, with 2,254 new patent applications filed during the review period[14] - Research and development expenses increased significantly to RMB 1,372,258 thousand in 2022, compared to RMB 670,629 thousand in 2021, reflecting a rise of 104.5%[58] Market and Product Development - The company is focusing on long-term competitiveness through increased investment in core technology R&D and talent development[5] - The company aims to expand its product line in the special-purpose atomization products sector to increase market share[5] - The company launched disposable electronic vaporization products, achieving revenue of RMB 1,931,028 thousand, a growth of 1,919.2% compared to RMB 95,634 thousand in 2021[11] - The company aims to expand its market share in specialized atomization products by entering more niche markets with new product launches[13] - The company plans to invest in R&D, including the establishment of a group-level research institute in Shenzhen and the development of new heating technologies[105] Operational Efficiency - The company successfully implemented an SAP system to enhance management capabilities, laying a solid foundation for long-term development[6] - The group has introduced advanced product development management processes to enhance manufacturability and automation feasibility in product design[16] - The group successfully implemented an SAP system to improve operational efficiency across procurement, production, sales, and financial management[15] - The company is upgrading its group-level ERP system and existing factories to enhance operational efficiency[105] Challenges and Risks - The company faced challenges from the ongoing COVID-19 pandemic, impacting production, logistics, and supply chains[5] - The cost of raw materials accounted for 73.3% of total sales costs, up from 70.0% in the previous year, primarily due to increased sales of low-margin disposable products[30] - Distribution and selling expenses rose to RMB 387,671 thousand, an increase of 101.0% from RMB 192,916 thousand in 2021, representing 3.2% of total revenue[31] Shareholder Communication and Governance - The company has maintained compliance with corporate governance principles, adhering to all code provisions except for the separation of the roles of Chairman and CEO[89] - The board consists of eight directors, including three independent non-executive directors, ensuring adequate checks and balances[89] - The company established various communication channels with shareholders, including printed and electronic reports, annual meetings, and dedicated investor relations teams[94] - The board expressed confidence in the company's long-term strategy and growth potential, as evidenced by recent share purchases by directors totaling HKD 201,410,020[100] Dividends and Share Buybacks - The company plans to distribute a final dividend of HKD 0.08 per ordinary share for the year ended December 31, 2022[4] - The company declared a mid-year dividend of HKD 0.10 per share for 2022, down from HKD 0.21 per share in 2021[80] - The total dividend paid for the year was approximately RMB 1,448,103 thousand, a decrease of 38.8% compared to RMB 2,369,905 thousand in 2021[80] - The company aims to enhance shareholder value through its share buyback program, reflecting confidence in its business outlook[98] Future Outlook - The global electronic vaporization equipment market is projected to grow at a compound annual growth rate (CAGR) of approximately 18.5% from 2022 to 2027[7] - The global heated tobacco products market is expected to grow at a CAGR of about 18.5%, with a projected market size of approximately USD 16,600 million by 2027[19] - The global special purpose vaporization equipment market is anticipated to grow at a CAGR of around 18.4%, reaching approximately USD 2,784.6 million by 2027[19] - The company aims to apply for additional resources from PMTA to launch more products in the medical and pharmaceutical sectors[105]

Financial Performance - Total revenue for the first half of 2022 was RMB 5,653,321, a decrease of 18.7% compared to RMB 6,953,406 in the same period of 2021[23]. - Gross profit for the first half of 2022 was RMB 2,705,607, down 29.2% from RMB 3,818,784 in the previous year[23]. - Adjusted net profit for the first half of 2022 was RMB 1,436,304, reflecting a 51.7% decline from RMB 2,975,225 in the first half of 2021[24]. - The company reported a decrease in gross margin to 47.9%, down 7.0 percentage points from 54.9% in the previous year[23]. - The total comprehensive income for the period was RMB 1,384,101 thousand, down 51.9% from RMB 2,878,816 thousand in the previous year[68]. - The company recorded a net profit of RMB 418,628 thousand for the six months ended June 30, 2022, compared to RMB 546,401 thousand in the same period of 2021, representing a decrease of approximately 23.4%[134]. - The net profit for the six months ended June 30, 2022, was RMB 1,384,690,000, a decrease of 52.2% compared to RMB 2,878,816,000 for the same period in 2021[154]. Research and Development - The company increased R&D investment, particularly in basic research, new materials, and aerosol medical fields, leading to the launch of a new ceramic atomization core technology platform for disposable electronic vaporization devices[19]. - R&D expenditure totaled RMB 604,120 thousand, an increase of 155.7% year-on-year, representing 10.7% of revenue compared to 3.4% in the same period last year[42]. - The company added over 300 R&D personnel, bringing the total to over 1,400, which is more than 40% of the total non-production staff[42]. - The company established 7 new research institutes, increasing the total to 14, focusing on new materials, medical research, and health-related applications of atomization technology[42]. - The company filed 929 new patent applications globally during the review period, including 381 invention patents, bringing the total to 4,337 patents, with 1,951 being invention patents[42]. Market and Sales - The company reported significant sales growth for its new disposable electronic vaporization products, which received positive market recognition[19]. - The company launched the Feelm Max ceramic atomization core technology platform for disposable electronic vapor devices, achieving significant sales growth in overseas markets[27]. - Revenue from enterprise customers was RMB 5,092,905 thousand, accounting for 90.1% of total revenue, down 21.6% year-on-year[51]. - Revenue from retail customers increased by 22.9% to RMB 560,416 thousand, rising from 6.6% to 9.9% of total revenue[51]. - In the US market, sales to enterprise customers decreased by 33.0% year-on-year, contributing 28.6% to total revenue[45]. - Sales in Europe and other markets increased by 42.1%, rising to 31.5% of total revenue[46]. Regulatory Compliance - The company actively applied for tobacco production licenses in compliance with Chinese regulatory requirements, with three subsidiaries already obtaining production licenses[19]. - The company is recognized as the manufacturer with the most models of vaporized electronic nicotine delivery systems (ENDS) products that have passed the Pre-Market Tobacco Application (PMTA) certification in the U.S.[19]. - The implementation of the "E-cigarette Management Measures" began on May 1, 2022, requiring compliance with national standards for e-cigarette products[33]. - The national standard for e-cigarettes (GB 41700-2022) was officially released on April 8, 2022, and will be implemented starting October 1, 2022[35]. - The company has established a dedicated team to coordinate compliance matters related to the "E-cigarette Management Measures" to ensure strict adherence to regulations[33]. Financial Position - As of June 30, 2022, total assets increased by 3.4% to RMB 23,653,877 from RMB 22,871,306 at the end of 2021[26]. - Cash and cash equivalents rose by 21.4% to RMB 13,875,609 compared to RMB 11,426,758 at the end of 2021[26]. - The asset-liability ratio increased to 16.8% from 15.8% at the end of 2021, indicating a slight rise in financial leverage[26]. - The company reported trade payables of RMB 794,580,000 as of June 30, 2022, a slight decrease from RMB 826,800,000 as of December 31, 2021[159]. - The company incurred capital expenditures of RMB 651,851 thousand for the acquisition of property, plant, and equipment, compared to RMB 480,254 thousand in the prior year[136]. Shareholder Information - The interim dividend declared for the six months ended June 30, 2022, is HKD 0.10 per share, compared to HKD 0.21 per share for the same period in 2021[95]. - The company has established various communication channels with shareholders and investors, including printed and electronic communications[94]. - The company’s major shareholders include Mr. Chen Zhiping and Mr. Liu Jincheng, who have significant holdings in the company[101]. - The company will suspend share registration from September 8 to September 13, 2022, to determine the shareholders entitled to the interim dividend[96]. - The company has a stock option plan approved by shareholders on September 30, 2019, allowing for the purchase of a total of 319,032,000 shares[104]. Strategic Initiatives - The company plans to leverage its technological advantages to redefine the disposable electronic vaporization market and enhance its offerings in the medical aerosol field[20]. - The introduction of high-level talent and expansion of organizational scale are expected to increase management and sales expenses in the short term[20]. - The company aims to diversify its revenue across different countries and regions while expanding its product portfolio in atomization technology for medical, health, and beauty applications[41]. - The company is committed to maintaining a leading position in technology and manufacturing through continuous automation and intelligent production improvements[44]. - The company plans to invest approximately RMB 1,500 million from 2022 to 2026 for the headquarters office project[80].

Financial Performance - Revenue for 2021 reached RMB 13,755,242 thousand, a significant increase from RMB 10,009,937 thousand in 2020[11] - Gross profit margin improved to 53.6% in 2021, up from 52.9% in 2020[11] - Net profit and total comprehensive income for 2021 was RMB 5,286,991 thousand, compared to RMB 2,399,921 thousand in 2020[11] - Adjusted net profit for 2021 was RMB 5,442,613 thousand, up from RMB 3,893,428 thousand in 2020[12] - Total assets increased to RMB 22,871,306 thousand in 2021 from RMB 14,773,809 thousand in 2020[11] - Cash and cash equivalents stood at RMB 11,426,758 thousand in 2021, compared to RMB 9,557,802 thousand in 2020[11] - Non-current assets grew to RMB 4,885,534 thousand in 2021 from RMB 2,333,221 thousand in 2020[11] - Current assets increased to RMB 17,985,772 thousand in 2021 from RMB 12,440,588 thousand in 2020[11] - Total equity/assets net worth rose to RMB 19,246,359 thousand in 2021 from RMB 12,399,721 thousand in 2020[11] - Adjusted net profit margin rose to 39.6% in 2021, compared to 38.9% in 2020[18] - Sales revenue reached RMB 13.76 billion in 2021, a year-on-year increase of 37.4%[24] - Revenue from enterprise customers grew by 37.4% to approximately RMB 12,593,523 thousand, surpassing the RMB 10 billion mark for the first time[37] - Revenue from retail customers increased by 37.1% to approximately RMB 1,161,719 thousand[38] - Export revenue accounted for 66.0% of total revenue, amounting to approximately RMB 9,082,316 thousand[37] - Domestic sales revenue accounted for 34.0% of total revenue, amounting to approximately RMB 4,672,926 thousand[37] - Total revenue for the period was approximately RMB 13.755 billion, a 37.4% year-on-year increase, with gross profit rising 39.3% to RMB 7.377 billion and a gross margin of 53.6%[45] - Adjusted net profit increased by 39.8% to approximately RMB 5.443 billion, driven by revenue growth and improved cost efficiency[45] - Revenue from Mainland China surged by 104.1% to RMB 5,530,301 thousand, reflecting economic recovery and increased customer orders[50] - Gross profit rose by 39.3% to RMB 7,377,039 thousand, with gross margin improving from 52.9% to 53.6% due to scale effects and product mix changes[52] - Net profit and total comprehensive income for the year surged by 120.3% to approximately RMB 5,286,991 thousand, with adjusted net profit increasing by 39.8% to RMB 5,442,613 thousand, primarily due to revenue growth, improved gross margin, and other income gains[67] Costs and Expenses - Raw material costs increased by 30.3% to RMB 4,467,152 thousand, accounting for 70.0% of total cost of sales[53] - Labor costs grew by 49.3% to RMB 1,011,034 thousand, representing 15.9% of total cost of sales, partly due to reduced government subsidies[54] - Distribution and sales expenses increased by 33.8% to RMB 192,916 thousand, driven by expanded marketing activities[55] - Administrative expenses rose by 26.5% to RMB 863,701 thousand, but decreased as a percentage of revenue from 6.8% to 6.3% due to cost-saving measures[57] - R&D expenses grew by 59.7% to RMB 670,629 thousand, with R&D as a percentage of revenue increasing from 4.2% to 4.9%[58] - Employee compensation and benefits in R&D surged by 76.5% to RMB 374,637 thousand, reflecting increased investment in talent and research areas[58] - Tax expenses increased by 28.5% to approximately RMB 922,375 thousand, accounting for 16.9% of adjusted net profit, driven by higher taxable profits[66] Market and Sales - Sales to enterprise customers grew by 37.4% year-on-year in 2021[24] - Sales to retail customers increased by 37.1% year-on-year in 2021[24] - The company's market share in the global atomization technology sector continues to grow[24] - The company's sales to the top five customers accounted for approximately 75.5% of total sales in 2021, with the largest customer contributing about 34.3% of total sales[119] - Purchases from the top five suppliers accounted for approximately 28.3% of total purchases in 2021, with the largest supplier contributing about 10.9% of total purchases[119] Regulatory and Geographic Revenue - The company faces regulatory challenges in key markets, such as the FDA's PMTA requirements in the US, which impact 12.2% of total revenue[25] - China's revenue contribution accounted for 40.2% of total revenue in 2021, with a significant portion affected by new tobacco regulations[26] - The U.S. revenue contribution, excluding products resold through Hong Kong, was approximately 37.1% in 2021[28] - Hong Kong's revenue contribution was 27.5% in 2021, with new regulations banning the import, production, and sale of e-cigarettes effective from April 2022[27] - The UK's revenue contribution was 11.1% in 2021, with regulatory changes post-Brexit requiring separate product notifications for Great Britain and Northern Ireland[27] - Japan and the EU contributed 1.5% and 3.0% respectively to revenue in 2021, with no significant regulatory changes reported[27] Research and Development - The company launched a new fully automated atomizer production line with a record efficiency of 7,200 atomizers per hour[20] - The company continues to invest in R&D for atomization technology, exploring applications in healthcare, beauty, and wellness[21] - R&D expenditure increased by 59.7% to approximately RMB 670.629 million, accounting for 4.9% of revenue, up from 4.2% in the previous year[39] - The company filed 1,187 new patent applications globally, including 605 invention patents, bringing the total number of patent applications to 3,408, with 1,570 being invention patents[39] - The company plans to establish at least 5 new research institutes in 2022, focusing on new materials, innovative vaporization technologies, and medical vaporization products[43] - R&D expenditure for 2022 is projected to reach approximately RMB 1.68 billion, exceeding the total R&D investment of the past six years[44] - The company launched the Feelm Air, a next-generation ultra-thin e-vaporizer solution, featuring a seven-layer composite heating film and a thinner ceramic core[44] Production and Capacity - Production capacity utilization rates were 67.6% for enterprise customers and 90.7% for retail customers, with total production reaching 1,748.4 million standard units for enterprise and 22.4 million for retail[41] - The company invested approximately RMB 977 million to acquire a commercial land plot in Shenzhen for the construction of its headquarters, with a planned construction area of 66,000 square meters[42] - Total investment in property, plant, and equipment and intangible assets during the review period: RMB 1,234,123 thousand, mainly for expanding production scale and increasing R&D activities[75] - Capital commitments for land use rights and property, plant, and equipment as of December 31, 2021: RMB 390,128 thousand, compared to RMB 70,272 thousand in 2020[76] - Significant investment of approximately RMB 977 million in a commercial land plot in Shenzhen for the construction of the company's headquarters, with a planned completion by the end of 2026[77] - Planned investment of approximately RMB 1,500 million over the next five years for the headquarters office building project[78] Market Growth and Projections - The global electronic vaporization device market is expected to grow at a CAGR of 25.3% from 2022 to 2026[35] - The company maintained its position as the world's largest electronic vaporization device manufacturer, with a market share increase from 18.9% in 2020 to 22.8% in 2021[35] - The global closed-system electronic vaporization device market is expected to grow at a CAGR of 24.6% from 2022 to 2026[35] - The global open-system electronic vaporization device market is expected to grow at a CAGR of 11.0% from 2022 to 2026[35] - The global special-purpose electronic vaporization device market is expected to grow at a CAGR of 45.8% from 2022 to 2026[35] - Global e-vapor device market is expected to grow at a CAGR of 25.3% from 2022 to 2026, according to Frost & Sullivan[43] Dividends and Shareholder Returns - The Board proposed a final dividend of 18 HK cents per ordinary share for the year ended December 31, 2021[17] - The board proposed a final dividend of 18 HK cents per ordinary share for the year ended December 31, 2021, subject to approval at the annual general meeting[124] - The company's annual general meeting is scheduled to be held on May 27, 2022[125] - The company will suspend share transfer registration from May 24, 2022, to May 27, 2022, to determine shareholders eligible to attend the annual general meeting and vote[126] - The company will suspend share transfer registration from June 6, 2022, to June 8, 2022, to determine shareholders eligible for the final dividend[126] Share Options and Incentives - The company granted a total of 319,032,000 share options under the Pre-IPO Share Option Plan to eligible participants[130] - The exercise price for each share option granted under the Pre-IPO Share Option Plan is RMB 0.38[132] - The Pre-IPO Share Option Plan has a maximum term of 10 years from the date of the option offer[131] - The Pre-IPO Share Option Plan was effective from the adoption date (September 30, 2019) to the listing date (July 10, 2020)[133] - The total number of share options granted under the Pre-IPO Share Option Scheme as of December 31, 2021, was 16,000,000 for Chen Zhiping, with an exercise price of RMB 0.38[134] - Wang Guisheng exercised 6,000,000 share options during the period, with an exercise price of RMB 0.38[134] - Li Xiaoping exercised 1,192,000 share options during the period, with an exercise price of RMB 0.38[134] - Yuan Xiang exercised 52,000 share options during the period, with an exercise price of RMB 0.38[134] - Xiong Fei exercised 81,000 share options during the period, with an exercise price of RMB 0.38[134] - Other employees exercised 39,535,000 share options during the period, with an exercise price of RMB 0.38[134] - The Post-IPO Share Option Plan was conditionally approved and adopted on June 15, 2020, with the purpose of encouraging and rewarding eligible participants for their contributions to the group[136][137] - The maximum number of shares that can be issued under the Post-IPO Share Option Plan and other share option plans is 10% of the total issued shares as of the listing date, or 574,351,272 shares[138] - The total number of shares that can be issued under all share option plans at any time cannot exceed 30% of the total issued shares[138] - The total number of stock options granted under the post-IPO share option plan in 2021 was 39,791,000 shares, distributed on April 1 (26,388,000 shares), July 9 (3,670,000 shares), and September 30 (9,733,000 shares)[142] - The closing share prices on the day before the option grant dates were HK$47.30 (April 1), HK$42.95 (July 9), and HK$35.50 (September 30)[142] - The exercise price for stock options granted under the post-IPO share option plan must not be lower than the highest of: the closing price on the grant date, the average closing price of the five trading days preceding the grant date, or the face value of the shares[141] - The post-IPO share option plan has a remaining lifespan of 10 years from the listing date (July 10, 2020), after which no further options will be granted[142] - The maximum number of shares that can be issued under all share option plans (including exercised, canceled, and unexercised options) within any 12-month period must not exceed 1% of the total issued shares[139] - For participants who are substantial shareholders or independent non-executive directors, the total value of shares issued upon exercise of all options granted within 12 months must not exceed HK$5,000,000[139] - The company adopted a Share Award Plan on September 2, 2021, to reward eligible participants for their contributions to the group's growth and development[144] - As of December 31, 2021, the total number of unexercised stock options held by employees was 6,620,668 shares (granted on April 1), 821,000 shares (granted on July 9), and 2,464,500 shares (granted on September 30)[143] - The company's share incentive plan has a validity period of 10 years, starting from the adoption date, with the board having the authority to terminate it early, provided that the termination does not affect the vested rights of any selected participants[146] - The maximum number of shares that the trustee may hold at any point during the plan's validity period shall not exceed 2% of the company's total issued share capital, and the maximum number of shares that may be awarded under the plan shall not exceed 5% of the company's total issued share capital[149] - On September 2, 2021, the company's board approved the adoption of the share incentive plan, and as of December 31, 2021, the trustee purchased 1,412,700 and 1,449,000 shares in the market on September 15, 2021, and November 5, 2021, respectively[151] - On December 24, 2021, the company granted 4,797,300 award shares to specific selected participants under the terms of the share incentive plan[151] - The share incentive plan allows for the award of shares to eligible participants, including employees, non-executive directors, consultants, and other contributors to the company's development and growth[145] - The trustee is required to transfer and vest the legal and beneficial ownership of the award shares to the selected participants as soon as practicable after the latest of the earliest vesting date specified in the award notice, receipt of necessary documents, and achievement of any performance targets[148] - If a selected participant who is an employee ceases to be an employee due to corporate restructuring, any awards granted to them will immediately lapse and be canceled[149] - The trustee is prohibited from exercising voting rights and must waive voting rights for any shares held under the trust, including award shares, additional shares, returned shares, bonus shares, and dividend shares[150] - The share incentive plan will terminate on the earlier of the 10th anniversary of the adoption date or the early termination date determined by the board or committee, without affecting the vested rights of any selected participants[150] Corporate Governance and Board Structure - The Board of Directors consists of 7 members, including 3 independent non-executive directors and 1 non-executive director, ensuring sufficient checks and balances[91] - The Chairman and CEO roles are held by the same individual, Mr. Chen Zhiping, which the Board considers appropriate for shareholder interests[91] - The company has a policy for the continuous professional development of directors, with all directors participating in training types A and B during the reporting period[94] - The Board held 5 meetings, the Audit Committee held 3 meetings, and other committees held a total of 3 meetings during the year ending December 31, 2021[95] - The company holds at least four regular board meetings annually, with agendas and documents sent to directors at least 3 days in advance[96] - All directors and relevant employees strictly complied with the Model Code for Securities Transactions as of December 31, 2021[97] - The company has adopted a Board Diversity Policy to enhance diversity, which is considered a key element in maintaining competitive advantage[98] - The Nomination Committee reviews the board's structure annually and considers diversity in gender, age, cultural background, professional experience, and skills[99] - The company has a Director Nomination Policy to ensure a balanced board with diverse skills, experience, and perspectives[100] - The Audit Committee includes three independent non-executive directors and focuses on financial reporting, risk management, and internal controls[104] - The Audit Committee held three meetings with external auditors in 2021 to review financial statements and discuss audit procedures[105] - The Nomination Committee evaluates board composition and considers factors like gender, age, and industry experience for board appointments[106] - The company's remuneration committee, chaired by Mr. Yan Xiaoying, is responsible for recommending the overall remuneration policy and structure for directors and senior management[107] - The company's senior management salary range for the fiscal year ending December 31, 2021, includes 2 individuals earning between 0 HKD and 10,000,000 HKD, and 1 individual earning between 10,000,001 HKD and 20,000,000 HKD[109] - The company's independent external auditor, Deloitte Touche Tohmatsu, received approximately 3,300,000 RMB for audit services and 973,000 RMB for non-audit services during the fiscal year ending December 31, 2021[113] - The company's risk management and internal control systems are designed to manage operational efficiency, ensure asset protection, maintain proper accounting records, and comply with relevant