Investment Rating - Buy (Maintained Rating) [2] Core Views - The report highlights the positive signals from British American Tobacco's (BAT) capital market communication day, where BAT reiterated its goal to become a smoke-free company by 2035 and shared updates on its new tobacco-related products [2] - The report emphasizes the growth potential in the compliant vaping market, particularly in the US, where regulatory actions against illegal products are expected to drive market expansion [3] - The report also notes the upcoming launch of BAT's new heated tobacco product, Glo Hilo, which is expected to target the high-end market and contribute to the company's growth [3] Market Analysis Vaping Market - The vaping market is expected to see significant growth, with BAT projecting that the number of vaping users will reach 110 million by 2030 [3] - The trend is shifting from disposable vaping products back to rechargeable closed-system products, which are regaining growth momentum [3] - In the US, illegal flavored products account for 70% of the vaping market, but regulatory actions in states like Louisiana have led to a 28% increase in the legal vaping market and a 91% reduction in illegal disposable product channels [3] Heated Tobacco Products (HNB) - BAT sees significant opportunities to improve its market position in the HNB category and plans to launch a breakthrough product, Glo Hilo, by the end of the year [3] - Glo Hilo is positioned as a high-end product and is expected to be further promoted in key markets by 2025 [3] - BAT has submitted a PMTA application for Glo products in the US, aiming to enter the market at an appropriate time [3] Financial Performance and Projections Revenue and Profit - The company's revenue is projected to grow from RMB 11,957 million in 2024E to RMB 16,659 million in 2026E, with a revenue growth rate of 7.06% in 2024E, 14.26% in 2025E, and 21.93% in 2026E [5] - Net profit attributable to the parent company is expected to increase from RMB 1,348 million in 2024E to RMB 2,289 million in 2026E, with a growth rate of 28.60% in 2025E and 32.09% in 2026E [5] Earnings Per Share (EPS) - EPS is projected to be RMB 0.22 in 2024E, RMB 0.28 in 2025E, and RMB 0.37 in 2026E [5] Valuation Metrics - The current stock price corresponds to a P/E ratio of 46x for 2024E, 36x for 2025E, and 27x for 2026E [5] - ROE (Return on Equity) is expected to improve from 5.92% in 2024E to 8.55% in 2026E [5] Industry Trends - The report highlights the tightening regulatory environment in the US, with the FDA and the Department of Justice forming a joint enforcement team to crack down on illegal products [3] - The FDA is also gradually approving more compliant products, such as menthol products, which could further drive market growth [3] - The European market is increasing regulation on disposable vaping products, which is expected to optimize the product structure and improve the company's profit margins [3]

Investment Rating - The report maintains a "Buy" rating for Smoore International (06969) with a target price of 12.54 HKD [1] Core Views - The company reported steady revenue growth in Q3 2024, achieving a revenue of 32.86 billion HKD, a year-on-year increase of 14.1% and a quarter-on-quarter increase of 16.5% [1] - The company's proprietary brand business is experiencing rapid growth, while the closed-system product business is gradually recovering [1] - The decline in net profit is attributed to increased R&D and management expenses, with net profit for Q3 2024 at 3.79 billion HKD, down 22.5% year-on-year but up 10.2% quarter-on-quarter [1] Summary by Relevant Sections Financial Performance - For the first three quarters of 2024, the company achieved a total revenue of 83.23 billion HKD, a 4.0% increase year-on-year, with a net profit of 10.62 billion HKD, down 11.9% year-on-year [1] - In Q3 2024, the revenue was 32.86 billion HKD, with a year-on-year increase of 14.1% and a quarter-on-quarter increase of 16.5% [1] Business Segments - The revenue from proprietary brand business reached 11.16 billion HKD, showing a significant year-on-year growth of 71.9% [1] - The company is expected to continue benefiting from the growth of both proprietary open and closed-system products due to increasing regulatory pressures in the European electronic vaporization market [1] R&D and Future Outlook - The company is increasing its R&D investments, focusing on non-combustible products and medical vaporization products, which are anticipated to become new revenue and profit growth points [1] - The company has completed the development and production of several devices for asthma and COPD medications, with research results gaining industry recognition [1]

Investment Rating - The report maintains a "Buy" rating for the company [2] Core Views - The company's Q1-Q3 revenue reached RMB 8.323 billion, a year-on-year increase of 4.0%, with total comprehensive income of RMB 1.055 billion, a year-on-year decrease of 11.7% [1] - Q3 revenue was RMB 3.286 billion, a year-on-year increase of 14.1% and a quarter-on-quarter increase of 16.5%, while comprehensive income was RMB 330 million, a year-on-year decrease of 28.3% and a quarter-on-quarter decrease of 20.4% [1] - Revenue growth was driven by strong performance in APV and the recovery of refillable products, while profitability was pressured by increased income tax expenses and rising R&D and management costs [1] - The company's self-owned brand Vaporesso saw a 71.9% year-on-year increase in H1 2024, with expectations of continued improvement in Q3 [1] - The refillable market in the US is recovering due to FDA enforcement actions, with core client VUSE's Alto tobacco flavor and Njoy menthol passing PMTA reviews [1] - The disposable e-cigarette market in Europe faced challenges due to stricter regulations, with H1 2024 revenue down 18.9% year-on-year, but a recovery is expected in Q3 [1] - The company is diversifying its product portfolio with investments in HNB, medical atomization, and beauty products, including the launch of the beauty brand Moyal and the first high-viscosity essence atomization beauty device [1] Financial Projections - The report forecasts net profit attributable to the parent company for 2024-2026 to be RMB 1.35 billion, RMB 1.79 billion, and RMB 2.28 billion, respectively, with corresponding P/E ratios of 52.4X, 39.3X, and 30.9X [2] Industry and Market Performance - The company operates in the consumer electronics industry [4] - As of October 10, 2024, the stock price was HKD 12.54, with a total market capitalization of HKD 77.452 billion and a free float of 100% [4] - The 30-day average trading volume was 18.24 million shares [4]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 15.42 [7][8] Core Insights - The company reported a strong Q3 revenue growth of 14.1% year-on-year, reaching RMB 3.286 billion, while the net profit decreased by 22.5% to RMB 379 million [2][3] - The company is expected to continue its revenue growth trajectory, driven by the expansion of its proprietary brand business and the recovery of traditional business segments [3][5] - The report forecasts the company's net profit for 2024-2026 to be RMB 1.698 billion, RMB 2.010 billion, and RMB 2.393 billion respectively, with corresponding EPS of RMB 0.28, RMB 0.33, and RMB 0.39 [2][12] Revenue Performance - For the first three quarters of 2024, the company achieved a revenue of RMB 8.323 billion, a 4.0% increase year-on-year [2] - Q3 revenue alone was RMB 3.286 billion, marking a 14.1% increase compared to the same quarter last year [2][3] Profitability Analysis - The company's pre-tax profit for Q3 was RMB 513 million, down 2.6% year-on-year, while net profit saw a more significant decline of 22.5% [2][4] - The report attributes the profit pressure to increased R&D investments and a significant rise in tax expenses compared to the previous year [4][5] Business Segments - The ToB segment is benefiting from stricter regulations in the U.S. and Europe, leading to a shift from traditional disposable products to new closed and open products [3] - The ToC segment has shown remarkable growth, with proprietary brand revenue increasing by 71.9% year-on-year in H1 2024 [3] R&D and Innovation - The company is increasing its R&D investments, particularly in the heated non-combustible products and medical nebulization sectors, which are seen as long-term growth strategies [5] - New product developments in the medical nebulization field have received recognition from regulatory bodies in Europe and the U.S. [5] Financial Projections - The report projects a revenue increase for 2024 to RMB 12.066 billion, with a growth rate of 8.03% [12] - The expected net profit for 2024 is RMB 1.698 billion, reflecting a slight recovery from the previous year's decline [12]

Investment Rating - Buy rating maintained for Smoore International (6969 HK) [4] Core Views - Closed-end products expected to show positive trends, with APV continuing strong growth [1][4] - Q3 2024 revenue reached RMB 3 286 million, up 14 1% YoY and 16 5% QoQ [5] - Q3 2024 pre-tax profit was RMB 513 million, down 2 6% YoY but up 24 4% QoQ [5] - Q3 2024 comprehensive income was RMB 330 million, down 28 3% YoY and 20 4% QoQ [5] Financial Performance - Revenue growth driven by strong performance in proprietary brand (APV) and closed-end products [6] - US pod system product revenue grew 6 1% QoQ and 6 5% YoY in Q2 2024 [6] - Europe and other regions pod system product revenue surged 93 2% QoQ and 22 5% YoY in Q2 2024 [6] - APV revenue increased 72% YoY in H1 2024, expected to maintain strong growth in Q3 [6] Profit Analysis - Pre-tax profit growth attributed to revenue and gross profit increase [6] - Net profit declined 22 5% YoY due to higher tax expenses [6] - R&D expenses increased, focusing on HNB and medical vaporization products [6] Market Position and Strategy - Major client VUSE held 51 2% market share in US closed-end and disposable products as of H1 2024 [6] - Company continues to optimize R&D structure, focusing on medical vaporization, HNB, and proprietary brands [6] - Launched MOYAL skincare brand and first-generation vaporization beauty product solution in Q1 2024 [6] - Completed development and production layout for several drug delivery devices for asthma and COPD in H1 2024 [6] Future Outlook - Expected net profit for 2024-2026: RMB 1 34 billion, RMB 1 67 billion, and RMB 1 92 billion respectively [6] - Corresponding PE ratios: 52X, 42X, and 36X [6]

Investment Rating - The investment rating for the company is "Buy" [2][4]. Core Insights - The company's performance is under pressure year-on-year due to cost input strategies, but there is a positive trend on a quarter-on-quarter basis. Future revenue growth from new business segments and an improved market landscape is anticipated [4]. - The company has slightly underperformed expectations, leading to a downward revision of profit forecasts. The projected net profits for 2024-2026 are 1.35 billion, 1.89 billion, and 2.48 billion RMB, respectively, with corresponding PE ratios of 51, 37, and 28 times [4]. - Revenue growth is driven by proprietary brands and closed products, with a year-on-year increase of 14.1% and a quarter-on-quarter increase of 16.5% in Q3 2024. The decline in net profit year-on-year is attributed to tax expenses and increased operational costs [4]. - The market for nebulization products is expected to improve, with recent policy signals indicating a more favorable regulatory environment for flavored electronic cigarettes [4]. - The HNB (Heated Not Burned) business is projected to contribute to revenue growth, supported by increased R&D investment and collaboration with BAT to provide comprehensive product and technology solutions [4]. Financial Summary - The company's revenue for 2024 is estimated at 12.42 billion RMB, with a year-on-year growth of 11%. The projected revenues for 2025 and 2026 are 14.29 billion and 16.43 billion RMB, respectively, both reflecting a 15% growth rate [7]. - The net profit for 2024 is forecasted to be 1.35 billion RMB, with a year-on-year decline of 18%. The net profits for 2025 and 2026 are expected to recover to 1.89 billion and 2.48 billion RMB, showing growth rates of 40% and 31% respectively [7]. - The PE ratio for 2024 is projected at 51.4, decreasing to 36.7 in 2025 and 28.0 in 2026, indicating an improving valuation over time [7].

Investment Rating - Buy (Maintained) [1] Core Views - The company's Q3 revenue showed steady growth, driven by its own-brand business and closed-system product revenue from enterprise clients [3] - The company continues to invest heavily in R&D, particularly in heated tobacco (HNB) and medical vaporization products, positioning itself for future growth [4] - The global HNB market is expected to grow at a CAGR of 15.5% from 2023 to 2028, reaching USD 75.51 billion by 2028 [4] - The company is expected to benefit from increasing overseas demand for new tobacco products and potential market share gains from major clients [4] Financial Performance - Q3 2024 revenue reached RMB 3.286 billion, up 14.1% YoY, while net profit declined by 22.5% YoY to RMB 379 million [3] - For the first three quarters of 2024, the company achieved revenue of RMB 8.323 billion, up 4.0% YoY, and net profit of RMB 1.062 billion, down 11.9% YoY [3] - The company's own-brand revenue grew by 71.9% YoY in the first half of 2024, reaching RMB 1.116 billion, with continued strong growth expected in Q3 [3] - R&D expenses increased by 23.7% YoY in the first half of 2024, reaching RMB 760 million [4] Future Projections - The company is expected to achieve net profits of RMB 1.7 billion, RMB 2.05 billion, and RMB 2.48 billion for 2024, 2025, and 2026, respectively [4] - Revenue is projected to grow at a CAGR of 19.87% and 16.65% in 2025 and 2026, respectively [5] - Net profit growth is expected to accelerate to 20.45% and 20.98% in 2025 and 2026, respectively [5] - The company's PE ratio is forecasted to be 43x, 35x, and 29x for 2024, 2025, and 2026, respectively [4] Business Strategy - The company is focusing on digital marketing and rapid response to consumer demand for its own-brand products [3] - It is expanding its international market presence and localizing operations to enhance its competitive edge [3] - The company's HNB product portfolio is gaining recognition, and potential orders from major clients like British American Tobacco could drive future growth [4] Financial Ratios - The company's gross margin is expected to improve from 38.81% in 2023 to 40.88% by 2026 [7] - ROE is projected to increase from 7.68% in 2023 to 9.05% by 2026 [7] - The company's net debt ratio is expected to remain negative, indicating a strong financial position [7]

Investment Rating - Buy rating maintained for Smoore International (6969 HK) [1] Core Views - Smoore International's 2024H1 results were largely in line with expectations, with revenue of RMB 5 037 million (-1 7% YoY) and net profit of RMB 683 million (-4 8% YoY) [1] - The company's self-branded business showed strong growth, with revenue increasing by 71 9% YoY to RMB 1 116 million, driven by new product launches and market share gains [1] - Smoore's gross margin improved by 1 8 percentage points to 38 0% in 2024H1, mainly due to the expansion of higher-margin self-branded business and cost optimization efforts [1] - The company is expected to benefit from industry consolidation amid tightening global regulations, leveraging its compliance capabilities, technological advantages, and flexible business model [1] Business Performance - Self-branded business revenue grew significantly in Europe (88% YoY) and the US (20 6% YoY) in 2024H1 [1] - Enterprise client business revenue declined by 12 3% YoY, with mixed performance across regions: US (-9 8%), Mainland China (+41 4%), Europe (-16 0%) [1] - Smoore increased its R&D investment, particularly in medical vaporization and heat-not-burn products, with R&D expense ratio rising by 3 08 percentage points to 15 09% [1] Financial Projections - Revenue is forecasted to grow 6% in 2024, 15% in 2025, and 11% in 2026, reaching RMB 11 811 million, RMB 13 583 million, and RMB 15 033 million respectively [1][2] - Net profit is expected to be RMB 1 632 million (-1% YoY) in 2024, RMB 1 915 million (+17% YoY) in 2025, and RMB 2 134 million (+11% YoY) in 2026 [1][2] - EPS projections are RMB 0 27 (2024), RMB 0 31 (2025), and RMB 0 35 (2026), with corresponding P/E ratios of 31 38x, 26 75x, and 23 99x [1][2] Financial Ratios - ROE is expected to remain stable at around 7 08%-7 88% from 2024 to 2026 [2] - Gross margin is projected to maintain at approximately 38 0%-38 4% over the next three years [5] - The company's net debt ratio is expected to stay negative, indicating a strong financial position [5]

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) ...