智通财经APP获悉，思摩尔国际(06969)盘中涨超5%，截至发稿，涨5.67%，报18.07港元，成交额1.44亿 港元。 消息面上，长江证券指出，9月18日，波兰Glo官网正式发布Glo Hilo新品，除改良的分体式设备和一体 式设备外(新增颜色选择至7种)，本次波兰市场发布了更丰富的烟支口味选择，初期已发布13款口味烟 支(8种茶基调味+5种烟草味)。在营销投入方面，英美烟草提供了购买加热器具赠送4包烟支的活动，继 续加大对Glo Hilo新品的推广力度。在其他市场方面，该行预计Glo Hilo下一站将进入意大利市场(2024 年全球HNB出货量第三大市场)，此外期待其他增量市场的有序拓展。 中金此前指出，随产品打磨成熟，HNB新品普遍以试销经验复用进行全球扩张，新市场开拓节奏、用 户成长斜率等阶段性成果推动资本市场预期修正，市占率提升节奏、收入增速、盈利兑现共同锚定合理 估值。看好头部国际烟草品牌依托创新性新品实现份额提升趋势。 ...

机构：长江证券 研究员：蔡方羿/米雁翔 近日，波兰Glo 官网发布Glo Hilo（一体式）和Glo Hilo Plus（分体式）加热不燃烧器具（分别有7 种颜 色选择），以及13 种口味烟支（8 种茶基调味+5 种烟草味）。分体式/一体式器具定价分别为289/149 波兰兹罗提，约合人民币约578/298 元；烟支定价19.99 波兰兹罗提/包，约合人民币约40 元/包。 事件评论 雾化电子烟：美国加强非法市场监管，合规产品迎来增长机遇，公司雾化业务修复或好于预期。1）美 国执法层面：9 月10 日，HHS 宣布FDA 和CBP 查获470 万件未经授权的电子烟产品，估计零售价值达 8650 万美元，是美国迄今规模最大的电子烟查获行动；2）从我国电子烟对美出口表现看：2025 年5-8 月，我国电子烟对美出口金额合计同比下降约23%，估计主要受监管政策收紧和关税影响。3）欧洲市 场：在一次性禁令推行背景下，公司通过快速推出创新合规新品满足市场需求，预计业务增长&产品结 构改善有望延续。 基本面趋势好、底部坚定看好全球新烟趋势下公司的成长潜力。1）雾化烟：主业修复趋势明确，有望 受益行业监管转向和大客户市占率 ...

Investment Rating - The investment rating for the company is "Buy" and is maintained [9] Core Viewpoints - The Glo Hilo new market is steadily advancing, with the vaporization business expected to recover rapidly. The Glo Hilo products have been launched in Poland and Japan, with positive initial feedback and promotional activities in place [10][10] - The company is well-positioned to benefit from regulatory changes in the U.S. market, which may lead to growth opportunities for its vaporization business [10] - The overall growth potential of the company is strong, driven by the recovery of its main business and the expansion of its HNB (Heated Not Burned) products [10] Summary by Relevant Sections HNB Business - Glo Hilo has launched in Japan and Poland, with positive sales feedback and a variety of product offerings including 13 flavors of tobacco and tea-based sticks [6][10] - The marketing strategy includes promotional offers to boost initial sales [10] Vaporization Business - The U.S. market is seeing increased regulation of illegal products, which may provide a favorable environment for compliant products [10] - The company has introduced innovative compliant products to meet market demand, which is expected to drive growth [10] Fundamental Trends - The recovery trend in the vaporization business is clear, with expectations of accelerated growth due to improved market share among major clients [10] - The company anticipates significant growth in the HNB segment, with a current global market penetration of only about 6% [10] - Long-term growth opportunities are also present in medical and specialty vaporization products [10] Profit Forecast - The company is projected to achieve net profits of 1.3 billion, 2.04 billion, and 2.89 billion RMB for the years 2025 to 2027, with corresponding PE ratios of 78, 50, and 35 [10]

Investment Rating - The investment rating for Smoore International (6969.HK) is not explicitly stated in the provided documents, but the report suggests a positive outlook based on market developments and company performance [1]. Core Viewpoints - The marketing promotion of HILO in Japan is expected to accelerate, while the compliance market in the US is showing signs of recovery [1]. - The competitive landscape in Japan is intensifying, with major players like Philip Morris and British American Tobacco reducing prices, which may enhance HILO's market share [2]. - The US market is anticipated to improve further, with an increase in the compliance product listing rate expected from Q3 2025, benefiting Smoore's core supply chain [2]. - In Europe, Smoore's ODM revenue is projected to grow significantly, with a year-on-year increase of 38% in the first half of 2025, indicating a successful transition from disposable products to compliant alternatives [3]. - The HNB (Heated Not Burned) product line is set to launch in Japan and expand into Europe, with expectations for revenue growth in subsequent quarters [3]. - Profit forecasts indicate a continuous improvement in operational performance, with net profits projected to reach 1.23 billion, 2.02 billion, and 3.06 billion yuan for 2025, 2026, and 2027 respectively [3]. Summary by Sections Market Developments - The US FDA and CBP have conducted significant enforcement actions against unauthorized e-cigarette products, indicating a tightening regulatory environment that may benefit compliant products [1]. - The introduction of new regulations in various US states is expected to enhance the market for compliant products, with a notable increase in the market share of compliant flavors [2]. Financial Projections - Total revenue is projected to grow from 11.8 billion yuan in 2024 to 19.3 billion yuan in 2027, with a compound annual growth rate (CAGR) of approximately 18% [6]. - The net profit is expected to recover from a decline in 2024 to a significant increase by 2027, reflecting a turnaround in profitability [6]. - Earnings per share (EPS) are forecasted to rise from 0.21 yuan in 2024 to 0.49 yuan in 2027, indicating improved shareholder value [6]. Operational Insights - The company is focusing on product innovation and compliance, with a shift from disposable products to more sustainable and compliant offerings, which is expected to drive growth in various markets [3]. - The operational cash flow is projected to improve significantly, reflecting better management of working capital and operational efficiency [9].

Group 1 - The core viewpoint of the article highlights the recent stock transfer of Smoore International (06969) from Wing Lung Bank to CITIC Securities, with a market value of HKD 51.96 billion, representing 4.51% of the company's shares [1] - Smoore International reported a revenue of RMB 6.013 billion for the six months ending June 30, 2025, reflecting an 18.3% year-on-year increase [1] - The adjusted profit for the same period was RMB 737 million, showing a decrease of 2.1% year-on-year, while the net profit was RMB 492 million, down 27.96% year-on-year [1] - The basic earnings per share for the company stood at 8.08 cents [1]

Group 1 - The core viewpoint of the article highlights the recent stock transfer of Smoore International (06969) from Wing Lung Bank to CITIC Securities Brokerage in Hong Kong, with a market value of HKD 51.96 billion, representing 4.51% of the total shares [1] - Smoore International reported its interim results for the six months ending June 30, 2025, achieving revenue of RMB 6.013 billion, an increase of 18.3% year-on-year [1] - The adjusted profit for the period was RMB 737 million, reflecting a decrease of 2.1% year-on-year, while the net profit was RMB 492 million, down 27.96% year-on-year [1] - The basic earnings per share for the company stood at 8.08 cents [1]

Company Information [Board of Directors and Committees](index=3&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E5%8F%8A%E5%A7%94%E5%93%A1%E6%9C%83) SMOORE International Holdings Limited's Board of Directors comprises executive, non-executive, and independent non-executive directors, with audit, nomination, remuneration, and ESG committees ensuring sound corporate governance - Board members include Chairman and President Mr. Chen Zhiping (executive director), Ms. Jiang Min (non-executive director), and Mr. Zhong Shan (independent non-executive director)[7](index=7&type=chunk) - The company has established an Audit Committee, Nomination Committee, Remuneration Committee, and Environmental, Social and Governance Committee to strengthen corporate governance[7](index=7&type=chunk) [Registered and Business Address](index=3&type=section&id=%E6%B3%A8%E5%86%8C%E5%8F%8A%E8%90%A5%E4%B8%9A%E5%9C%B0%E5%9D%80) The company is registered in the Cayman Islands, with its principal place of business in Kowloon, Hong Kong, and its China headquarters in Shenzhen, Guangdong Province - Registered office is located at Cricket Square, Cayman Islands[7](index=7&type=chunk) - Hong Kong principal place of business is Unit B, 28/F, EGL Tower, 83 Hung To Road, Kowloon, Hong Kong[8](index=8&type=chunk) - China headquarters is located at No. 16 Dongcai Industrial Zone, Gushu Community, Xixiang Street, Bao'an District, Shenzhen, Guangdong Province[8](index=8&type=chunk) [Stock Information and Advisors](index=4&type=section&id=%E8%82%A1%E7%A5%A8%E4%BF%A1%E6%81%AF%E4%B8%8E%E9%A1%BE%E9%97%AE) The company's stock ticker is "SMOORE International" with stock code **6969**, and it has appointed IR Asia Limited as its investor relations advisor - Stock ticker: SMOORE International, Stock code: **6969**[9](index=9&type=chunk) - Investor relations advisor is IR Asia Limited[9](index=9&type=chunk) Chairman's Statement [Business Review](index=5&type=section&id=%E4%B8%9A%E5%8A%A1%E5%9B%9E%E9%A1%B1) In the first half of 2025, SMOORE International achieved significant growth in its Heated Tobacco Product (HNB) business, supported key clients in launching high-end HNB products, saw a strong recovery in its vaping business due to enhanced global regulatory enforcement and strong compliance capabilities, and continued investing in emerging businesses like medical atomization and beauty atomization while optimizing management efficiency - **2025** marks a key milestone for SMOORE, with the HNB business achieving significant growth, successfully assisting a core client in launching a high-end HNB product series in Sendai, Japan, receiving positive market feedback[12](index=12&type=chunk)[13](index=13&type=chunk) - The vaping business experienced a strong recovery, with both ToB and own-brand businesses recording revenue growth, primarily benefiting from strengthened global regulatory enforcement against non-compliant products[12](index=12&type=chunk)[14](index=14&type=chunk) - Increased sales and distribution expenses and a significant rise in share-based non-cash expenses were the main reasons affecting net profit, but these are considered important investments for long-term growth[12](index=12&type=chunk) - Continued investment in emerging businesses such as medical atomization (Transpire Bio Inc.) and beauty atomization ("Lan Zhi" brand), achieving key milestones like "Lan Zhi" professional beauty device obtaining China Class II medical device certification[12](index=12&type=chunk)[15](index=15&type=chunk) - Implemented strategic initiatives such as strengthening talent management, decentralizing decision-making authority, and optimizing performance management to enhance management efficiency and operational capabilities[16](index=16&type=chunk) [Outlook](index=7&type=section&id=%E5%89%8D%E6%99%AF%E5%B1%95%E6%9C%9B) For the second half of 2025, SMOORE International will continue to strengthen R&D, enhance organizational agility, and improve management efficiency, planning to promote HNB products nationwide in Japan and in more core markets, while also launching new compliant vaping products, deepening localized operations, and increasing investment in medical and beauty atomization businesses - In the second half of **2025**, the company will continue to strengthen R&D capabilities, enhance organizational agility, and improve management efficiency[18](index=18&type=chunk) - The HNB business plans to assist strategic clients in launching their product series nationwide in Japan by September **2025** and expand to more core markets, continuously investing in R&D to optimize user experience[18](index=18&type=chunk) - The vaping business will continue to adhere to principles of compliance, innovation, and agility, launching new products that meet regulatory requirements and strengthening the VAPORESSO brand's competitiveness[19](index=19&type=chunk) - The special-purpose atomization product business will deepen localized operations, optimize its business model, and launch innovative products to drive business recovery[19](index=19&type=chunk) - In the medical atomization sector (Transpire Bio), the company will increase investment in independent R&D and collaborative development, and evaluate external licensing opportunities[20](index=20&type=chunk) - The beauty atomization business ("Lan Zhi" brand) will increase promotion efforts in professional institutions and continuously optimize its strategy[21](index=21&type=chunk) [Heartfelt Thanks](index=8&type=section&id=%E8%A1%B7%E5%BF%83%E6%84%9F%E8%B0%A2) The Chairman, on behalf of the Group, extends sincere gratitude to all colleagues, clients, regulators, and shareholders for their contributions and support in achieving solid results in the first half of 2025, looking forward to continued collaboration and value creation - Thanks to all colleagues for their full efforts in a challenging environment, contributing to the solid performance in the first half of **2025**[22](index=22&type=chunk) - Thanks to clients for their consistent trust and partnership, and to regulatory bodies for their commitment to fostering a more sustainable and compliant industry environment[22](index=22&type=chunk) - Sincere appreciation to all shareholders for their steadfast support and confidence in the Group's vision and strategy[22](index=22&type=chunk) Financial Summary [Key Financial Performance](index=9&type=section&id=%E5%85%B3%E9%94%AE%E8%B4%A2%E5%8A%A1%E4%B8%9A%E7%BB%A9) In the first half of 2025, the company's revenue increased by **18.3%** to **RMB 6.013 billion**, gross profit grew by **16.6%** to **RMB 2.244 billion**, but gross margin slightly decreased, while profit for the period declined by **28.0%** to **RMB 492 million**, mainly due to increased share-based payment expenses and market development costs, with adjusted profit for the period decreasing by **2.1%** to **RMB 737 million** Key Financial Data for the 6 Months Ended June 30 | Indicator | 2025 (RMB '000) | 2024 (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 6,013,290 | 5,083,554 | 18.3 | | Gross Profit | 2,243,850 | 1,923,951 | 16.6 | | Gross Margin | 37.3% | 37.8% | (0.5 percentage points) | | Profit Before Tax | 698,735 | 811,555 | (13.9) | | Profit for the Period | 492,154 | 683,198 | (28.0) | | Total Comprehensive Income for the Period | 501,166 | 724,597 | (30.8) | | Total Comprehensive Income for the Period Attributable to Shareholders | 501,166 | 724,597 | (30.8) | | Adjusted Profit for the Period | 737,410 | 752,851 | (2.1) | | Adjusted Net Profit Margin | 12.3% | 14.8% | (2.5 percentage points) | Adjusted Profit for the Period Reconciliation | Indicator | 2025 (RMB '000) | 2024 (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | Profit for the Period Before Adjustment | 492,154 | 683,198 | (28.0) | | Add: Share-based Payment Expenses Related to Share Option Scheme and Share Award Scheme | 245,256 | 69,653 | 252.1 | | Adjusted Profit for the Period | 737,410 | 752,851 | (2.1) | - Adjusted profit for the period excludes non-cash share-based payment expenses to provide a clearer view of operating performance[27](index=27&type=chunk) [Key Financial Position Indicators](index=10&type=section&id=%E5%85%B3%E9%94%AE%E8%B4%A2%E5%8A%A1%E7%8A%B6%E5%86%B5%E6%8C%87%E6%A0%87) As of June 30, 2025, the company's total assets slightly decreased, total equity grew by **2.5%**, cash and cash equivalents remained stable, and both the debt-to-asset ratio and current ratio improved, indicating a sound financial position, while trade receivables turnover days remained stable and inventory turnover days slightly increased Key Financial Position Indicators | Indicator | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 27,331,803 | 27,654,378 | (1.2) | | Total Equity | 22,445,554 | 21,904,711 | 2.5 | | Cash and Cash Equivalents | 5,211,753 | 5,170,700 | 0.8 | | Debt-to-Asset Ratio (%) | 17.9 | 20.8 | (2.9 percentage points) | | Current Ratio (%) | 336.7 | 320.3 | 16.4 percentage points | | Trade Receivables and Bills Receivable Turnover Days (days) | 61.4 | 61.5 | (0.2) | | Inventory Turnover Days (days) | 45.7 | 41.8 | 9.3 | | Trade Payables and Bills Payable Turnover Days (days) | 62.4 | 65.2 | (4.3) | Management Discussion and Analysis [Principal Businesses of the Group](index=11&type=section&id=%E6%9C%AC%E9%9B%86%E5%9B%A2%E4%B8%BB%E8%A6%81%E4%B8%9A%E5%8A%A1) SMOORE International, a global leader in atomization technology solutions, primarily operates two business segments: business-to-business (ToB) and own-brand, with ToB covering atomization products, HNB, special-purpose atomization products, and medical atomization products, while own-brand focuses on vaping and beauty atomization products, achieving an **18.3%** revenue increase in the first half of 2025 due to strengthened global regulatory enforcement and rapid launch of compliant innovative products - The Group's principal businesses are divided into business-to-business (ToB business) and own-brand business[30](index=30&type=chunk) - ToB business provides R&D, design, and manufacturing of atomization products, HNB products, special-purpose atomization products, and medical atomization products, along with related technical services, to leading global tobacco companies, independent vaping brands, and other enterprise clients[30](index=30&type=chunk) - Own-brand business focuses on R&D, design, manufacturing, and sales of own-brand vaping products and beauty atomization products[30](index=30&type=chunk) - Revenue for the first half of **2025** was approximately **RMB 6.013 billion**, an **18.3%** year-on-year increase, primarily due to strengthened global enforcement against non-compliant products and the Group's rapid launch of innovative and compliant products[31](index=31&type=chunk) - ToB business revenue was approximately **RMB 4.739 billion**, a **19.5%** year-on-year increase; own-brand business revenue was approximately **RMB 1.274 billion**, a **14.1%** year-on-year increase[31](index=31&type=chunk) - Sales and distribution expenses were approximately **RMB 491 million**, a **31.2%** year-on-year increase, mainly due to expanding overseas market sales channel coverage[12](index=12&type=chunk)[32](index=32&type=chunk) - R&D expenses were approximately **RMB 723 million**, a **4.9%** year-on-year decrease, mainly due to focusing on strategic segments (HNB and medical atomization) and optimizing resource allocation[32](index=32&type=chunk) - Administrative expenses increased to approximately **RMB 610 million**, a significant **79.7%** year-on-year increase, primarily affected by increased non-cash share-based payment expenses resulting from the grant of share options and awarded shares in the fourth quarter of **2024**[33](index=33&type=chunk) - Profit for the period was approximately **RMB 492 million**, a **28.0%** year-on-year decrease; adjusted profit for the period was approximately **RMB 737 million**, a **2.1%** year-on-year decrease[33](index=33&type=chunk) [Business Review](index=13&type=section&id=%E4%B8%9A%E5%8A%A1%E5%9B%9E%E9%A1%B1) This section details the company's business progress in the first half of 2025, including legal and regulatory updates in key markets, sales and marketing strategies, R&D breakthroughs, and production optimization, demonstrating the company's proactive response to global regulatory changes, consolidation of market position through innovative products and localized operations, and significant advancements in emerging areas like HNB, medical atomization, and beauty atomization [Summary of Major Legal, Regulatory, Administrative Orders and Policy Updates](index=13&type=section&id=%E9%87%8D%E5%A4%A7%E6%B3%95%E5%BE%8B%E3%80%81%E6%B3%95%E8%A7%84%E3%80%81%E8%A1%8C%E6%94%BF%E5%91%BD%E4%BB%A4%E5%8F%8A%E6%94%BF%E7%AD%96%E6%9B%B4%E6%96%B0%E6%A6%82%E8%A6%81) Global major markets continue to tighten regulations on e-cigarettes and atomization products, with the US FDA acting on over **99%** of ENDS PMTA applications, issuing MDOs for non-tobacco and non-menthol flavored products, the UK banning disposable vaping products from June 1, 2025, EU countries implementing flavor restrictions and disposable e-cigarette bans, and China's Hong Kong and mainland regulating alternative smoking products and e-cigarette production, to which the Group actively adjusts R&D and production to ensure compliance - The US FDA has acted on over **99%** of ENDS product PMTA applications, issuing Marketing Denial Orders (MDOs), though some MDOs have been overturned in court; the FDA has issued marketing authorizations for **25** tobacco-flavored and **4** menthol-flavored ENDS products manufactured by the Group's clients[35](index=35&type=chunk) - The UK will ban the sale of disposable e-cigarettes from June 1, **2025**, and the Group has developed products compliant with the new regulations[35](index=35&type=chunk) - Multiple EU countries (e.g., Finland, Netherlands, Belgium, France) have implemented or plan to implement flavor restrictions and disposable e-cigarette bans, and the Group has developed compliant products[36](index=36&type=chunk)[37](index=37&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk) - The EU has updated battery regulations, and the Group has developed new solutions compliant with the new battery requirements[38](index=38&type=chunk) - China's Hong Kong has banned the import, promotion, manufacture, sale, and commercial possession of alternative smoking products since April 30, **2022**, and proposed banning possession of ASPs in public places from April 30, **2026**[43](index=43&type=chunk)[44](index=44&type=chunk) - Mainland China issued regulations on tobacco monopoly licenses for e-cigarette production and wholesale enterprises in May **2025**[48](index=48&type=chunk) - The Group has established a dedicated team to closely monitor global regulatory developments, promptly adjust business activities to ensure compliance, and promote the application of atomization technology in medical, health, and other industries[45](index=45&type=chunk)[46](index=46&type=chunk) [Sales and Marketing](index=16&type=section&id=%E9%94%80%E5%94%AE%E4%B8%8E%E8%90%A5%E9%94%80) Stricter global regulations on vaping products create growth opportunities for compliant companies, with enhanced enforcement in the US and disposable vaping product bans in Europe, leading to SMOORE International's **18.3%** revenue growth in the first half of 2025, driven by **19.5%** growth in ToB business and **14.1%** in own-brand business, while its VAPORESSO brand performed strongly in Europe and its "Lan Zhi" beauty atomization products saw significant revenue growth in mainland China and obtained Class II medical device certification - The global regulatory landscape for vaping products is clearer and enforcement measures are stricter, creating growth opportunities for compliant participants[49](index=49&type=chunk) - The US FDA seized nearly **2 million** unauthorized vaping products with a retail value of approximately **USD 33.8 million**; **13** states passed vaping product registration bills[49](index=49&type=chunk) - The UK will implement a ban on the sale of disposable vaping products from June 1, **2025**, creating significant market opportunities for compliant products[50](index=50&type=chunk) H1 2025 Revenue by Business Segment | Business Segment | H1 2025 Revenue (RMB '000) | Year-on-Year Growth (%) | % of Total Revenue | | :--- | :--- | :--- | :--- | | Own-brand Business | 1,274,306 | 14.1 | 21.2 | | Business-to-Business (ToB) | 4,738,984 | 19.5 | 78.8 | | **Total** | **6,013,290** | **18.3** | **100.0** | - Own-brand vaping product revenue in Europe and other markets was approximately **RMB 1.069 billion**, a **15.1%** year-on-year increase, mainly due to the excellent performance of the VAPORESSO brand and the launch of upgraded XROS 5 and XROS 5 Mini series[51](index=51&type=chunk) - Own-brand beauty atomization product "Lan Zhi" revenue in mainland China was approximately **RMB 31 million**, a **2,595.2%** year-on-year increase, with professional devices obtaining Class II medical device certification[53](index=53&type=chunk) - ToB business revenue in Europe and other countries was approximately **RMB 2.734 billion**, a **38.0%** year-on-year increase, primarily driven by sales of vaping products and HNB products, and technical services[54](index=54&type=chunk)[77](index=77&type=chunk) - ToB business revenue in the US market was approximately **RMB 1.888 billion**, a **1.5%** year-on-year increase, including vaping and special-purpose atomization products, with the company strengthening localized operations[55](index=55&type=chunk)[77](index=77&type=chunk) - ToB business revenue in mainland China market was approximately **RMB 117 million**, a **6.1%** year-on-year decrease[55](index=55&type=chunk)[77](index=77&type=chunk) [Research and Development](index=18&type=section&id=%E7%A0%94%E7%A9%B6%E4%B8%8E%E5%BC%80%E5%8F%91) SMOORE International continues to invest in R&D to solidify its technological leadership, with R&D expenses of approximately **RMB 723 million** in the first half of 2025, a **4.9%** year-on-year decrease due to focusing on HNB and medical atomization and capitalizing some development costs, while achieving significant progress in HNB products, medical atomization, vaping, and special-purpose atomization products, and continuously building a global intellectual property protection system - Total R&D expenses were approximately **RMB 723 million**, a **4.9%** year-on-year decrease, with the percentage of revenue decreasing from **15.0%** to **12.0%**[56](index=56&type=chunk)[61](index=61&type=chunk) - R&D focus is on HNB products and medical atomization, with eligible R&D expenditures capitalized[56](index=56&type=chunk) - Successfully supported a strategic client in launching a high-end HNB product series in Sendai, Japan, with plans for a nationwide launch in Japan by September **2025**[57](index=57&type=chunk) - Medical atomization subsidiary Transpire Bio established an inhalation product R&D center in Miami, Florida, and collaborated with CDMOs to build manufacturing capabilities[57](index=57&type=chunk) - Vaping business launched FEELM multi-category solution portfolio (adjustable flavor system, large puff transparent oil tank, and 2+10 platform) and upgraded VAPORESSO XROS 5 and XROS 5 Mini series[59](index=59&type=chunk) - Special-purpose atomization product business began to recover, launching several innovative product solutions[60](index=60&type=chunk) - Own-brand "Lan Zhi" professional devices obtained Class II medical device certification and published three academic papers with IFSCC[60](index=60&type=chunk) - **839** new patent applications globally (including **464** invention patents), with a cumulative total of **10,092** patent applications (including **5,224** invention patents)[60](index=60&type=chunk) R&D Expenses by Area | R&D Area | 2025 (RMB '000) | % of Total | 2024 (RMB '000) | % of Total | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | R&D for Electronic Nicotine Delivery Systems (including vaping products and HNB products) | 478,591 | 66.2 | 481,988 | 63.4 | (0.7) | | R&D for Medical Atomization and Beauty Atomization Products | 179,241 | 24.8 | 185,471 | 24.4 | (3.4) | | R&D for Special-Purpose Atomization Products and Solutions | 64,732 | 9.0 | 92,653 | 12.2 | (30.1) | | **Total** | **722,564** | **100.0** | **760,112** | **100.0** | **(4.9)** | [Production and Operations](index=20&type=section&id=%E7%94%9F%E4%BA%A7%E8%BF%90%E8%90%A5) The company's production system demonstrated exceptional agility, continuously improving capacity utilization through flexible operational adjustments and strategic optimization of production layout, establishing a KPI system and regular tracking mechanisms to optimize quality control, cost management, and delivery assurance, with breakthrough progress in the HNB business effectively supported by the operations team, laying a foundation for future growth - The production system continuously improved capacity utilization through flexible operational adjustments and strategic optimization of production layout, ensuring rapid market response and customer delivery[62](index=62&type=chunk) - Established a Key Performance Indicator (KPI) system and regular tracking and benchmarking mechanisms to identify best practices in quality control, cost management, and delivery assurance[62](index=62&type=chunk) - Breakthroughs in the HNB business were effectively supported by the operations team for the launch and delivery of major clients' HNB products, establishing a strict quality control system and improving production efficiency[62](index=62&type=chunk) [Future Prospects and Strategies](index=21&type=section&id=%E6%9C%AA%E6%9D%A5%E5%89%8D%E6%99%AF%E5%8F%8A%E7%AD%96%E7%95%A5) In the second half of 2025, SMOORE International will continue to focus on "atomization technology," deepening its presence in key areas such as vaping, HNB, special-purpose atomization products, medical atomization, and beauty atomization, accelerating the commercialization of technology platforms, continuously investing in strategic R&D projects, and strengthening localized operations, channel expansion, and market insights, while optimizing authorization and empowerment within business segments, enhancing talent development and management, and improving employee incentive mechanisms to achieve long-term sustainable growth and create shareholder value - In the second half of **2025**, the company will continue to adhere to "atomization technology" as its core, deepening its presence in key areas such as vaping, HNB, special-purpose atomization products, medical atomization, and beauty atomization[64](index=64&type=chunk) - The HNB product market size is expected to reach **USD 66.86 billion** by **2029**, with a CAGR of approximately **10.1%** from **2024-2029**; the company plans to support strategic clients in launching high-end HNB products nationwide in Japan and continuously invest in R&D to enhance user experience[65](index=65&type=chunk) - The global vaping product market size is expected to reach **USD 91.42 billion** by **2029**, with a CAGR of approximately **7.4%** from **2024-2029**; the company will leverage its technology and manufacturing expertise to provide innovative and compliant products and deepen cooperation with clients[66](index=66&type=chunk) - The special-purpose atomization product market size is expected to reach **USD 3.44 billion** by **2029**, with a CAGR of approximately **17.2%** from **2024-2029**; the company will launch innovative products, expand its product portfolio, and refine its business model[67](index=67&type=chunk) - In the medical atomization sector, Transpire Bio will steadily advance the development of drug-device combination products for respiratory diseases and seek cooperation with more international pharmaceutical companies[68](index=68&type=chunk) - The beauty atomization market in China is expected to expand significantly by **2025**; the company will closely monitor "Lan Zhi" product sales trends and adjust its business model as needed[69](index=69&type=chunk) - R&D efforts will focus on accelerating the commercialization of technology platforms, continuously investing in strategic R&D projects, addressing core technical challenges and user pain points, and collaborating with clients on joint research[70](index=70&type=chunk) - Continue to invest in localized operations, channel expansion, and market insights, deepening commercial cooperation with some clients to provide comprehensive one-stop solutions[70](index=70&type=chunk) - Optimize authorization and empowerment within business segments, strengthen talent development and management, and improve employee incentive mechanisms to build a sustainable and successful long-term enterprise[72](index=72&type=chunk) - Strengthen production and operations management, combining automated equipment with intelligent production management systems to enhance automation and efficiency, and promote a "prevention-first" quality assurance approach[72](index=72&type=chunk) [Financial Review](index=23&type=section&id=%E8%B4%A2%E5%8A%A1%E5%9B%9E%E9%A1%B1) This section provides a detailed review of SMOORE International's financial performance in the first half of 2025, with total revenue increasing by **18.3%** to **RMB 6.013 billion**, gross profit growing by **16.6%** to **RMB 2.244 billion**, but gross margin slightly decreasing to **37.3%**, while profit for the period declined by **28.0%** to **RMB 492 million**, primarily due to significant increases in share-based payment expenses, market development costs, and legal and compliance service fees, with adjusted profit for the period decreasing by **2.1%** to **RMB 737 million**, also analyzing revenue composition, cost structure, expense changes, other income and losses, finance costs, income tax expenses, and liquidity and financial resources [Overall Financial Performance](index=23&type=section&id=%E6%95%B4%E4%BD%93%E8%B4%A2%E5%8A%A1%E8%A1%A8%E7%8E%B0) In the first half of 2025, SMOORE International's total revenue increased by **18.3%** to **RMB 6.013 billion**, gross profit grew by **16.6%** to **RMB 2.244 billion**, gross margin slightly decreased to **37.3%**, and profit for the period declined by **28.0%** to **RMB 492 million**, mainly due to significant increases in share-based payment expenses, market development costs, and legal and compliance service fees, with adjusted profit for the period decreasing by **2.1%** to **RMB 737 million** - Total revenue was approximately **RMB 6,013,290 thousand**, an increase of approximately **18.3%** compared to the same period last year[73](index=73&type=chunk) - Gross profit was approximately **RMB 2,243,850 thousand**, an increase of approximately **16.6%** compared to the same period last year, with gross margin slightly decreasing from approximately **37.8%** in the same period last year to approximately **37.3%** in the review period[73](index=73&type=chunk) - Profit for the period was approximately **RMB 492,154 thousand**, a decrease of approximately **28.0%** compared to the same period last year[73](index=73&type=chunk) - The decrease in profit for the period was primarily attributable to: (i) a significant increase in share-based payment expenses; (ii) a significant increase in market development expenses for own-brand products; and (iii) a significant increase in legal and compliance service-related fees[73](index=73&type=chunk) - Excluding share-based payment expenses, adjusted profit for the period was approximately **RMB 737,410 thousand**, a decrease of approximately **2.1%** compared to the same period last year[73](index=73&type=chunk) [Revenue — By Business Type](index=24&type=section&id=%E6%94%B6%E7%9B%8A%E2%80%94%E6%8C%89%E4%B8%9A%E5%8A%A1%E7%B1%BB%E5%9E%8B%E5%88%92%E5%88%86) In the first half of 2025, own-brand business revenue was approximately **RMB 1.274 billion**, a **14.1%** year-on-year increase, accounting for **21.2%** of total revenue, with beauty atomization products in China seeing a significant **2,595.2%** revenue increase, while business-to-business (ToB) revenue was approximately **RMB 4.739 billion**, a **19.5%** year-on-year increase, accounting for **78.8%** of total revenue, with strong performance in Europe and other countries/regions (**38.0%** increase) and a **6.1%** decrease in the China market Revenue by Business Type | Business Type | 2025 (RMB '000) | % of Total | 2024 (RMB '000) | % of Total | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Own-brand Business | 1,274,306 | 21.2 | 1,116,743 | 22.0 | 14.1 | | Business-to-Business | 4,738,984 | 78.8 | 3,966,811 | 78.0 | 19.5 | | **Total** | **6,013,290** | **100.0** | **5,083,554** | **100.0** | **18.3** | - Within own-brand business, revenue from Europe and other countries/regions increased by **15.1%**, all from vaping product sales[75](index=75&type=chunk) - Within own-brand business, revenue from the US market decreased by **6.7%**, all from vaping product sales[75](index=75&type=chunk) - Within own-brand business, revenue from the China market increased by **2,595.2%**, primarily from beauty atomization product sales[75](index=75&type=chunk) - Within business-to-business, revenue from Europe and other countries/regions increased by **38.0%**, primarily from vaping products, HNB product sales, and technical services[77](index=77&type=chunk) - Within business-to-business, revenue from the US market increased by **1.5%**, primarily from vaping products, special-purpose atomization product sales, and technical services[77](index=77&type=chunk) - Within business-to-business, revenue from the China market decreased by **6.1%**, primarily from vaping product sales and technical services[77](index=77&type=chunk) [Gross Profit and Cost of Revenue](index=27&type=section&id=%E6%AF%9B%E5%88%A9%E4%B8%8E%E6%94%B6%E7%9B%8A%E6%88%90%E6%9C%AC) In the first half of 2025, the company's gross profit increased by **16.6%** to **RMB 2.244 billion**, while gross margin slightly decreased by **0.5** percentage points to **37.3%**, with cost of revenue increasing by **19.3%**, and raw material costs' proportion slightly decreasing, while labor and indirect costs' proportions both increased - Gross profit was approximately **RMB 2,243,850 thousand**, an increase of approximately **16.6%** compared to the same period last year, with gross margin slightly decreasing from approximately **37.8%** in the same period last year to approximately **37.3%** in the review period[80](index=80&type=chunk) Cost of Revenue Composition | Cost Type | 2025 (RMB '000) | % of Total | 2024 (RMB '000) | % of Total | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Raw Material Costs | 2,845,798 | 47.3 | 2,428,773 | 47.8 | 17.2 | | Labor Costs | 433,682 | 7.2 | 341,758 | 6.7 | 26.9 | | Indirect Costs | 454,955 | 7.6 | 354,390 | 7.0 | 28.4 | | Taxes and Surcharges | 35,005 | 0.6 | 34,682 | 0.7 | 0.9 | | **Total** | **3,769,440** | **62.7** | **3,159,603** | **62.2** | **19.3** | - The proportion of raw material costs to revenue slightly decreased, mainly due to continuous efforts to reduce product costs and improve efficiency[81](index=81&type=chunk) [Distribution and Selling Expenses](index=27&type=section&id=%E5%88%86%E9%94%80%E5%8F%8A%E9%94%80%E5%94%AE%E5%BC%80%E6%94%AF) In the first half of 2025, distribution and selling expenses increased by **31.2%** to **RMB 491 million**, with its proportion of revenue rising from **7.4%** to **8.2%**, primarily due to increased marketing investment in own-brand business, leading to significantly higher staff remuneration and market development costs - Distribution and selling expenses were approximately **RMB 491,229 thousand**, a year-on-year increase of approximately **31.2%**, with the percentage of revenue increasing from **7.4%** to **8.2%**[82](index=82&type=chunk) - Staff remuneration and benefits increased by **24.9%**, mainly due to increased remuneration for marketing personnel[82](index=82&type=chunk) - Market development expenses increased by **123.2%**, mainly due to increased promotion efforts for vaping products and beauty atomization products[85](index=85&type=chunk) [Administrative Expenses](index=28&type=section&id=%E8%A1%8C%E6%94%BF%E5%BC%80%E6%94%AF) In the first half of 2025, administrative expenses increased by **79.7%** to **RMB 610 million**, with its proportion of revenue rising from **6.7%** to **10.1%**, primarily due to significant increases in share-based payment expenses and professional fees related to legal and compliance services - Administrative expenses were approximately **RMB 609,548 thousand**, a year-on-year increase of approximately **79.7%**, with the percentage of revenue increasing from **6.7%** to **10.1%**[85](index=85&type=chunk) - Staff remuneration and benefits increased by **76.2%**, mainly due to increased share-based payment expenses[86](index=86&type=chunk) - Professional fees increased by **819.6%**, mainly due to increased legal and compliance service-related fees[86](index=86&type=chunk) [Research and Development Expenses](index=29&type=section&id=%E7%A0%94%E5%8F%91%E5%BC%80%E6%94%AF) In the first half of 2025, R&D expenses decreased by **4.9%** to **RMB 723 million**, with its proportion of revenue falling from **15.0%** to **12.0%**, primarily due to reduced investment in vaping products and the capitalization of eligible development costs - R&D expenses were approximately **RMB 722,564 thousand**, a year-on-year decrease of approximately **4.9%**, with the percentage of revenue decreasing from **15.0%** to **12.0%**[88](index=88&type=chunk) - R&D expenses for electronic nicotine delivery systems decreased by **0.7%**, for medical atomization and beauty atomization products decreased by **3.4%**, and for special-purpose atomization products and solutions decreased by **30.1%**[88](index=88&type=chunk) - The decrease in R&D expenses was mainly due to reduced investment in vaping products and the capitalization of eligible development costs during the review period[88](index=88&type=chunk) [Other Income and Expenses](index=29&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E4%B8%8E%E5%BC%80%E6%94%AF) In the first half of 2025, total other income decreased by **9.3%** to **RMB 350 million**, mainly due to reduced bank deposit interest income and government grants, while total other losses significantly increased by **811.9%** to **RMB 55.177 million**, primarily due to exchange losses and losses from disposal/write-off of property, plant, and equipment Other Income Composition | Item | 2025 (RMB '000) | 2024 (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | Interest Income from Bank Deposits | 235,658 | 322,425 | (26.9) | | Interest Income from Investment Notes Measured at Amortized Cost | 87,130 | — | Not Applicable | | Government Grants | 19,192 | 57,955 | (66.9) | | Others | 7,711 | 5,255 | 46.7 | | **Total** | **349,691** | **385,635** | **(9.3)** | Other Gains and Losses | Item | 2025 (RMB '000) | 2024 (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | Net Exchange (Loss) Gain | (37,238) | 8,134 | Not Applicable | | Loss from Forward Foreign Exchange Contracts/Swap Contracts | (482) | — | Not Applicable | | Gain from Short-term Floating Rate Bank Deposits | 5,524 | 1,118 | 394.1 | | Gain from Debt Instruments | 2,498 | — | Not Applicable | | Gain from Early Termination of Leases | 258 | 396 | (34.8) | | Loss from Disposal/Write-off of Property, Plant and Equipment | (25,737) | (22,935) | 12.2 | | Others | — | 7,236 | Not Applicable | | **Total** | **(55,177)** | **(6,051)** | **811.9** | [Finance Costs and Income Tax Expenses](index=30&type=section&id=%E8%9E%8D%E8%B5%84%E6%88%90%E6%9C%AC%E4%B8%8E%E6%89%80%E5%BE%97%E7%A8%8E%E5%BC%80%E6%94%AF) In the first half of 2025, finance costs decreased by **26.4%** to **RMB 13.619 million**, mainly from interest expenses on lease liabilities and discounted bills receivable, while income tax expenses increased by **60.9%** to **RMB 207 million**, primarily due to increased tax provisions related to international business expansion - Finance costs were approximately **RMB 13,619 thousand**, a decrease of approximately **26.4%** compared to the same period last year, mainly from interest expenses on lease liabilities and discounted bills receivable[91](index=91&type=chunk) - Income tax expenses were approximately **RMB 206,581 thousand**, an increase of approximately **60.9%** compared to the same period last year, primarily due to increased tax provisions related to international business expansion[92](index=92&type=chunk) [Profit for the Period and Total Comprehensive Income](index=31&type=section&id=%E6%9C%9F%E5%86%85%E6%BA%A2%E5%88%A9%E5%8F%8A%E5%85%A8%E9%9D%A2%E7%BB%BC%E5%90%88%E6%94%B6%E7%9B%8A%E6%80%BB%E9%A2%9D) In the first half of 2025, profit for the period decreased by **28.0%** to **RMB 492 million**, and total comprehensive income for the period decreased by **30.8%** to **RMB 501 million**, primarily because the growth in revenue and gross profit was insufficient to offset the increase in expenses - Profit for the period was approximately **RMB 492,154 thousand**, a decrease of approximately **28.0%** compared to the same period last year[94](index=94&type=chunk) - Total comprehensive income for the period was approximately **RMB 501,166 thousand**, a decrease of approximately **30.8%** compared to the same period last year[94](index=94&type=chunk) - The decrease was mainly because the growth in revenue and gross profit was insufficient to offset the increase in expenses[94](index=94&type=chunk) [Liquidity and Financial Resources](index=31&type=section&id=%E6%B5%81%E5%8A%A8%E8%B5%84%E9%87%91%E5%8F%8A%E8%B4%A2%E5%8A%A1%E8%B5%84%E6%BA%90) As of June 30, 2025, the company's net current assets were approximately **RMB 10.20 billion**, cash and cash equivalents were approximately **RMB 5.21 billion**, the current ratio increased to **336.7%**, and the debt ratio decreased to **21.8%**, indicating a sound financial position, with no bank or other financial institution borrowings but available bank credit facilities of approximately **RMB 7.3 billion**, of which approximately **RMB 723 million** has been utilized - Net current assets were approximately **RMB 10,198,578 thousand** (December 31, **2024**: approximately **RMB 11,587,063 thousand**)[95](index=95&type=chunk) - Cash and cash equivalents were approximately **RMB 5,211,753 thousand** (December 31, **2024**: approximately **RMB 5,170,700 thousand**)[95](index=95&type=chunk) - Current ratio was approximately **336.7%** (December 31, **2024**: approximately **320.3%**)[95](index=95&type=chunk) - No bank or other financial institution borrowings (December 31, **2024**: none)[97](index=97&type=chunk) - Possesses bank credit facilities of approximately **RMB 7,300.0 million**, of which approximately **RMB 722.9 million** has been utilized[97](index=97&type=chunk) - Debt ratio was approximately **21.8%** (December 31, **2024**: approximately **26.2%**)[98](index=98&type=chunk) - No assets pledged (December 31, **2024**: bank deposits of approximately **RMB 590.0 million**)[99](index=99&type=chunk) [Foreign Exchange Risk](index=32&type=section&id=%E5%A4%96%E6%B1%87%E9%A3%8E%E9%99%A9) The company's functional currency is RMB, with approximately **70%** of revenue settled in USD and **30%** in RMB, while approximately **80%** of expenses are settled in RMB, making USD exposure the primary foreign exchange risk, which the company manages through timely settlement or forward foreign exchange contracts, with a sensitivity analysis showing a **10%** change in USD to RMB exchange rate would impact total comprehensive income by approximately **RMB 1.146 billion** - The Company's functional currency is RMB, with approximately **70%** of revenue settled in USD and approximately **30%** settled in RMB[100](index=100&type=chunk) - Approximately **80%** of expenses are settled in RMB, with foreign exchange risk primarily arising from USD exposure[100](index=100&type=chunk) - Foreign exchange risk is controlled through timely settlement or entering into forward foreign exchange contracts[101](index=101&type=chunk) - Sensitivity analysis shows that if the USD to RMB exchange rate increases/decreases by **10%**, total comprehensive income would increase/decrease by approximately **RMB 1,145,717 thousand**[101](index=101&type=chunk) [Employment, Training and Development](index=32&type=section&id=%E9%9B%87%E4%BD%A3%E3%80%81%E5%9F%B9%E8%AE%AD%E4%B8%8E%E5%8F%91%E5%B1%95) As of June 30, 2025, the company had **20,978** employees in China and **2,205** overseas employees, offering attractive remuneration, retirement plans, share incentive schemes, and benefits, while prioritizing employee learning, growth, and career development through targeted talent cultivation programs, with total employee costs representing approximately **28.5%** of revenue, an increase primarily due to higher share-based payment expenses - As of June 30, **2025**, the Group had **20,978** employees in China (including mainland China and Hong Kong) and **2,205** employees in other countries and regions[102](index=102&type=chunk) - Provides comprehensive and attractive remuneration, retirement plans, share incentive schemes, and benefits[102](index=102&type=chunk) - Developed targeted talent cultivation programs, such as the "Hong Yi Program," "Zhen Yu Program," and a "1–3–5–7–10" ten-year development path for fresh graduates[102](index=102&type=chunk) - Total employee costs accounted for approximately **28.5%** of the Group's revenue (same period **2024**: approximately **25.6%**), with the increase primarily due to a year-on-year increase in share-based payment expenses[104](index=104&type=chunk) [Capital Expenditure and Commitments](index=33&type=section&id=%E8%B5%84%E6%9C%AC%E5%BC%80%E6%94%AF%E4%B8%8E%E6%89%BF%E8%AF%BA) In the first half of 2025, the company's total investment in property, plant, and equipment and intangible assets was approximately **RMB 785 million**, primarily for its headquarters building, equipment, and capitalized R&D expenditures, with capital commitments of approximately **RMB 474 million** as of June 30, 2025 - For the six months ended June 30, **2025**, the Group's total investment in property, plant and equipment and intangible assets was approximately **RMB 784,581 thousand** (same period **2024**: approximately **RMB 282,315 thousand**)[105](index=105&type=chunk) - Investments were primarily due to the recognition of (1) capital expenditures related to the headquarters building, (2) capital expenditures related to equipment, and (3) capitalized R&D expenditures[105](index=105&type=chunk) - As of June 30, **2025**, the Group had capital commitments contracted for the acquisition of property, plant and equipment of approximately **RMB 474,461 thousand** (December 31, **2024**: approximately **RMB 707,750 thousand**)[106](index=106&type=chunk) [Significant Events](index=33&type=section&id=%E9%87%8D%E5%A4%A7%E4%BA%8B%E9%A1%B9) For the six months ended June 30, 2025, the company did not undertake any significant acquisitions or disposals, nor did it have any significant investments or material contingent liabilities - For the six months ended June 30, **2025**, the Group did not undertake any significant acquisitions or disposals of subsidiaries, associates, or joint ventures[107](index=107&type=chunk) - For the six months ended June 30, **2025**, the Group did not have any significant investments[108](index=108&type=chunk) - As of June 30, **2025**, the Group did not have any material contingent liabilities[109](index=109&type=chunk) Other Information [Major Customers and Suppliers](index=34&type=section&id=%E4%B8%BB%E8%A6%81%E5%AE%A2%E6%88%B7%E5%8F%8A%E4%BE%9B%E5%BA%94%E5%95%86) For the six months ended June 30, 2025, sales to the company's top five customers accounted for approximately **54.7%** of total sales, and purchases from the top five suppliers accounted for approximately **21.0%** of total purchases, with the company committed to maintaining long-term cooperative relationships with reputable customers and suppliers - Sales to the top five customers accounted for approximately **54.7%** of total sales (same period **2024**: approximately **56.2%**)[112](index=112&type=chunk) - Purchases from the top five suppliers accounted for approximately **21.0%** of total purchases (same period **2024**: approximately **22.3%**)[112](index=112&type=chunk) [Corporate Governance](index=34&type=section&id=%E4%BC%81%E4%B8%9A%E7%AE%A1%E6%B2%BB) The company is committed to maintaining good corporate governance practices and complies with all code provisions and recommended best practices of the Corporate Governance Code, except for the combined roles of Chairman and CEO, with a diverse Board of Directors and established Audit, Remuneration, Nomination, and ESG Committees to ensure checks and balances and effective operation, and an independent internal audit mechanism to assess risk management and internal control systems - The company has complied with all code provisions and recommended best practices of the Corporate Governance Code, except for the combined roles of Chairman and Chief Executive Officer held by Mr. Chen Zhiping[113](index=113&type=chunk) - The Board believes the current arrangement of Chairman and Chief Executive Officer is appropriate, as there are sufficient checks and balances within the Board, and the Board comprises individuals with diverse experience in various fields[113](index=113&type=chunk)[114](index=114&type=chunk) - The Audit Committee consists of three independent non-executive directors and is responsible for reviewing financial matters, risk management, and internal controls[117](index=117&type=chunk) - The Remuneration Committee is responsible for making recommendations on the remuneration policies and structure for directors and senior management[118](index=118&type=chunk) - The Nomination Committee is responsible for reviewing the Board's composition, making recommendations on director rotation, appointment, and succession, and assessing the independence of independent non-executive directors[120](index=120&type=chunk) - An Environmental, Social and Governance (ESG) Committee has been established to enhance the company's ESG management level[121](index=121&type=chunk) - The company has established an internal audit mechanism to independently assess the effectiveness of risk management and internal control systems[123](index=123&type=chunk) [Information on Directors and Senior Management](index=37&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E4%B8%BB%E8%A6%81%E8%A1%8C%E6%94%BF%E4%BA%BA%E5%91%98%E4%BF%A1%E6%81%AF) All directors have confirmed strict compliance with the Model Code for Securities Transactions by Directors and, for the six months ended June 30, 2025, no director held any interest in any business competing with the company or its subsidiaries, with directors continuously participating in professional training and no significant changes in information on directors and senior management - All directors have confirmed strict compliance with the Model Code for Securities Transactions by Directors[126](index=126&type=chunk) - For the six months ended June 30, **2025**, no director held any interest in any business competing with the Company or any of its subsidiaries[127](index=127&type=chunk) - All directors are required to attend continuous professional training[128](index=128&type=chunk) - As of June 30, **2025**, there were no changes in the information of directors and senior management[129](index=129&type=chunk) [Investor Relations and Dividends](index=37&type=section&id=%E6%8A%95%E8%B5%84%E8%80%85%E5%85%B3%E7%B3%BB%E4%B8%8E%E8%82%A1%E6%81%AF) The company communicates with shareholders and investors through various channels, including its website, AGMs, and press conferences, and to thank shareholders, the Board resolved to declare an interim dividend of **HKD 20 cents** per share for the six months ended June 30, 2025, a significant increase from the prior year, with share transfer registration suspended from September 9 to 11, 2025 - The company has established various communication channels with shareholders and investors, including its company website, annual general meetings, press conferences, and investor analyst briefings[130](index=130&type=chunk) - The Board resolved to declare an interim dividend of **HKD 20 cents** per share for the six months ended June 30, **2025** (same period **2024**: **HKD 5 cents** per share)[132](index=132&type=chunk) - The interim dividend will be paid on September 25, **2025**, with the ex-dividend date on September 5, **2025**, and the record date on September 11, **2025**[132](index=132&type=chunk) - The company will suspend share transfer registration from September 9, **2025**, to September 11, **2025**[133](index=133&type=chunk) [Share Movements and Holdings](index=38&type=section&id=%E8%82%A1%E4%BB%BD%E5%8F%98%E5%8A%A8%E4%B8%8E%E6%8C%81%E8%82%A1%E6%83%85%E5%86%B5) For the six months ended June 30, 2025, neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities, and this section details the interests and short positions of directors and chief executives, substantial shareholders, and other persons in the company's shares and related shares, as well as changes in share option schemes and share award schemes, noting that controlling shareholders' pledged shares have been fully released and the company maintains sufficient public float - During the review period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities (including treasury shares)[134](index=134&type=chunk) Interests and Short Positions of Directors or Chief Executives in the Company's Shares (as of June 30, 2025) | Name of Director or Chief Executive | Nature of Interest | Long/Short Position | Number of Ordinary Shares Held | Approximate % of Total Issued Shares | | :--- | :--- | :--- | :--- | :--- | | Chen Zhiping | Interest in controlled corporation | Long Position | 2,073,708,600 | 33.51% | | Chen Zhiping | Interest of parties acting in concert | Long Position | 280,201,400 | 4.53% | | Chen Zhiping | Beneficial owner | Long Position | 61,000,000 | 0.99% | | Chen Zhiping | Other | Long Position | 40,927,848 | 0.66% | | Xiong Shaoming | Interest in controlled corporation | Long Position | 319,692,100 | 5.17% | | Xiong Shaoming | Interest of parties acting in concert | Long Position | 1,997,635,600 | 32.28% | | Xiong Shaoming | Beneficial owner | Long Position | 1,437,148 | 0.0232% | | Xiong Shaoming | Other | Long Position | 137,073,000 | 2.22% | | Wang Guisheng | Interest in controlled corporation | Long Position | 12,000,000 | 0.19% | | Wang Guisheng | Beneficial owner | Long Position | 4,003,486 | 0.0647% | | Wang Xin | Interest in controlled corporation | Long Position | 1,243,000 | 0.0201% | | Wang Xin | Beneficial owner | Long Position | 1,586,557 | 0.0256% | Interests and Short Positions of Substantial Shareholders and Other Persons in Shares and Related Shares (as of June 30, 2025) | Name of Substantial Shareholder/Person | Nature of Interest | Long/Short Position | Number of Ordinary Shares Held | Approximate % of Total Issued Shares | | :--- | :--- | :--- | :--- | :--- | | SMR & Alon Limited | Beneficial owner | Long Position | 1,997,635,600 | 32.28% | | Zhao Zihan | Spouse's interest | Long Position | 2,455,837,848 | 39.69% | | Andy Xiong Holding Limited | Beneficial owner | Long Position | 319,692,100 | 5.17% | | Han Xiao | Spouse's interest | Long Position | 2,455,837,848 | 39.69% | | EVE BATTERY INVESTMENT LTD. | Beneficial owner | Long Position | 1,901,520,000 | 30.73% | | EVE Asia Limited | Interest in controlled corporation | Long Position | 1,901,520,000 | 30.73% | | Huizhou EVE Energy Co., Ltd. | Interest in controlled corporation | Long Position | 1,901,520,000 | 30.73% | | Liu Jincheng | Interest in controlled corporation | Long Position | 1,950,240,000 | 31.51% | | Luo Jinhong | Spouse's interest | Long Position | 1,950,240,000 | 31.51% | - The share option scheme aims to incentivize and reward eligible individuals for their contributions to the Group; **2,390,000** share options were granted on May 7, **2025**, and Mr. Chen Zhiping was conditionally granted **61,000,000** share options on December 27, **2024**, which became effective on February 18, **2025**[143](index=143&type=chunk)[144](index=144&type=chunk) - The share award scheme aims to recognize and reward eligible participants for their contributions to the Group; **1,614,000** awarded shares were granted on May 7, **2025**[152](index=152&type=chunk) - The controlling shareholder's **USD 350 million** secured exchangeable bonds due in **2026** were delisted from the Stock Exchange on December 23, **2024**, and the **60,909,821** ordinary shares of the Company pledged by EVE Battery were fully released[160](index=160&type=chunk) - For the six months ended June 30, **2025**, the public held at least **25%** of the total issued share capital of the Company (excluding treasury shares)[161](index=161&type=chunk) [Use of Proceeds from Global Offering](index=51&type=section&id=%E5%85%A8%E7%90%83%E5%8F%91%E5%94%AE%E6%89%80%E5%BE%97%E6%AC%BE%E9%A1%B9%E7%94%A8%E9%80%94) The company listed on July 10, 2020, raising net proceeds of approximately **HKD 7.91 billion**, of which approximately **HKD 5.31 billion** had been utilized as of June 30, 2025, primarily for automated production, ERP system upgrades, R&D investments, and working capital, with approximately **HKD 2.60 billion** remaining unutilized, mainly for increasing production capacity - Net proceeds from listing were approximately **HKD 7,909.9 million**[163](index=163&type=chunk) Use of Proceeds from Global Offering and Actual Utilization (as of June 30, 2025) | Intended Use of Proceeds | Approximate % of Total | Net Proceeds Allocated (HKD millions) | Actual Utilization During Review Period (HKD millions) | Actual Utilization as of June 30, 2025 (HKD millions) | Unutilized Amount as of June 30, 2025 (HKD millions) | Expected Timeline | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Increase production capacity, including establishing industrial parks | 50% | 3,954.9 | 24.8 | 1,356.0 | 2,598.9 | By end of 2026 | | Implement automated production, upgrade ERP system and existing factories | 25% | 1,977.5 | — | 1,977.5 | — | — | | Invest in R&D, including establishing research institutes, developing new technologies, and paying for product certification expenses | 20% | 1,582.0 | — | 1,582.0 | — | — | | Allocate for working capital and other general corporate purposes | 5% | 395.5 | — | 395.5 | — | — | | **Total** | **100%** | **7,909.9** | **24.8** | **5,311.0** | **2,598.9** | | [Use of Proceeds from Placing](index=52&type=section&id=%E9%85%8D%E5%94%AE%E6%89%80%E5%BE%97%E6%AC%BE%E9%A1%B9%E7%94%A8%E9%80%94) The company completed a placing and subscription in February 2021, raising net proceeds of approximately **HKD 4.45 billion**, of which approximately **HKD 2.20 billion** had been utilized as of June 30, 2025, primarily for investments in electronic atomization equipment for the healthcare and pharmaceutical industries, with approximately **HKD 2.25 billion** remaining unutilized, mainly for expanding production capacity and PMTA applications - Net proceeds from placing and subscription were approximately **HKD 4,445.5 million**[165](index=165&type=chunk) Use of Proceeds from Placing and Actual Utilization (as of June 30, 2025) | Intended Use of Proceeds | Approximate % of Total | Net Proceeds Allocated (HKD millions) | Actual Utilization During Review Period (HKD millions) | Actual Utilization as of June 30, 2025 (HKD millions) | Unutilized Amount as of June 30, 2025 (HKD millions) | Expected Timeline | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Expand production capacity | 55% | 2,445.0 | 59.5 | 640.8 | 1,804.2 | Before end of 2026 | | Allocate more resources and funds for PMTA applications | 10% | 444.5 | — | — | 444.5 | Before end of 2026 | | Invest in electronic atomization equipment for healthcare and pharmaceutical industries | 35% | 1,556.0 | — | 1,556.0 | — | — | | **Total** | **100%** | **4,445.5** | **59.5** | **2,196.8** | **2,248.7** | | [Other Disclosures](index=53&type=section&id=%E5%85%B6%E4%BB%96%E6%8A%AB%E9%9C%B2) The company confirms no material changes to matters listed in Appendix D2 of the Listing Rules, and the independent auditor has reviewed the condensed consolidated interim financial information, finding no material issues, with no significant events requiring disclosure after the reporting period - The company confirms that there are no material changes to the existing information disclosed in the **2024** Annual Report regarding matters listed in paragraph 32 of Appendix D2 of the Listing Rules[168](index=168&type=chunk) - Independent auditor Deloitte Touche Tohmatsu has reviewed the unaudited condensed consolidated interim financial information for the six months ended June 30, **2025**[169](index=169&type=chunk) - No significant events after June 30, **2025**, requiring disclosure by the Company[170](index=170&type=chunk) Review Report on Condensed Consolidated Financial Statements [Review Conclusion](index=54&type=section&id=%E5%AE%A1%E9%98%85%E7%BB%93%E8%AE%BA) Deloitte Touche Tohmatsu has reviewed SMOORE International Holdings Limited's condensed consolidated financial statements for the six months ended June 30, 2025, in accordance with Hong Kong Standard on Review Engagements 2410, concluding that nothing has come to their attention to indicate that the condensed consolidated financial statements are not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34 - Independent auditor Deloitte Touche Tohmatsu has reviewed the condensed consolidated financial statements[172](index=172&type=chunk) - The scope of review is substantially less than an audit, thus no audit opinion is expressed[173](index=173&type=chunk) - Nothing has come to their attention to indicate that the condensed consolidated financial statements are not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34[174](index=174&type=chunk) Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income [Profit or Loss Statement Overview](index=55&type=section&id=%E6%8D%9F%E7%9B%8A%E8%A1%A8%E6%A6%82%E8%A7%88) For the six months ended June 30, 2025, the company reported revenue of **RMB 6.013 billion**, gross profit of **RMB 2.244 billion**, profit for the period of **RMB 492 million**, and total comprehensive income of **RMB 501 million**, with basic earnings per share of **8.08 RMB cents** and diluted earnings per share of **7.96 RMB cents** Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (for the 6 Months Ended June 30, 2025) | Item | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Revenue | 6,013,290 | 5,083,554 | | Cost of Revenue | (3,769,440) | (3,159,603) | | Gross Profit | 2,243,850 | 1,923,951 | | Other Income and Expenses | 349,691 | 385,635 | | Distribution and Selling Expenses | (491,229) | (374,516) | | Administrative Expenses | (609,548) | (339,229) | | Research and Development Expenses | (722,564) | (760,112) | | Finance Costs | (13,619) | (18,512) | | Other Gains and Losses | (55,177) | (6,051) | | Net Impairment Loss Recognized on Trade Receivables | (2,669) | 389 | | Profit Before Tax | 698,735 | 811,555 | | Income Tax Expense | (206,581) | (128,357) | | Profit for the Period | 492,154 | 683,198 | | Exchange Differences Arising from Translation of Overseas Operations | 9,012 | 41,399 | | Total Comprehensive Income for the Period | 501,166 | 724,597 | | Basic Earnings Per Share (RMB cents) | 8.08 | 11.20 | | Diluted Earnings Per Share (RMB cents) | 7.96 | 11.11 | Condensed Consolidated Statement of Financial Position [Balance Sheet Overview](index=56&type=section&id=%E8%B5%84%E4%BA%A7%E8%B4%9F%E5%80%BA%E8%A1%A8%E6%A6%82%E8%A7%88) As of June 30, 2025, the company's total non-current assets were **RMB 12.824 billion**, total current assets were **RMB 14.508 billion**, total current liabilities were **RMB 4.309 billion**, net current assets were **RMB 10.199 billion**, net assets were **RMB 22.446 billion**, and total equity was **RMB 22.446 billion** Condensed Consolidated Statement of Financial Position (as of June 30, 2025) | Item | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, Plant and Equipment | 4,989,627 | 4,637,073 | | Intangible Assets | 369,205 | 196,363 | | Other Non-current Assets Total | 7,465,382 | 5,974,514 | | **Total Non-current Assets** | **12,824,214** | **10,807,950** | | **Current Assets** | | | | Inventories | 1,003,180 | 910,425 | | Trade and Bills Receivables | 2,015,323 | 2,084,825 | | Other Current Assets Total | 11,489,086 | 13,851,178 | | **Total Current Assets** | **14,507,589** | **16,846,428** | | **Current Liabilities** | | | | Trade and Bills Payables | 1,241,857 | 1,369,576 | | Other Current Liabilities Total | 3,067,154 | 3,889,789 | | **Total Current Liabilities** | **4,309,011** | **5,259,365** | | **Net Current Assets** | **10,198,578** | **11,587,063** | | **Total Assets Less Current Liabilities** | **23,022,792** | **22,395,013** | | **Non-current Liabilities** | | | | Lease Liabilities | 275,852 | 190,214 | | Deferred Income | 13,397 | 13,965 | | Deferred Tax Liabilities | 287,989 | 286,123 | | **Total Non-current Liabilities** | **577,238** | **490,302** | | **Net Assets** | **22,445,554** | **21,904,711** | | **Capital and Reserves** | | | | Share Capital | 431,909 | 431,299 | | Reserves | 21,994,903 | 21,465,789 | | Equity Attributable to Shareholders of the Company | 22,426,812 | 21,897,088 | | Non-controlling Interests | 18,742 | 7,623 | | **Total Equity** | **22,445,554** | **21,904,711** | Condensed Consolidated Statement of Changes in Equity [Overview of Changes in Equity](index=58&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) For the six months ended June 30, 2025, total equity attributable to shareholders of the company increased from **RMB 21.897 billion** as of January 1, 2025, to **RMB 22.427 billion**, with profit for the period at **RMB 492 million** and total comprehensive income at **RMB 501 million**, and share-based payment expenses, exercise of share options, and dividend distribution being key factors in the changes Condensed Consolidated Statement of Changes in Equity (for the 6 Months Ended June 30, 2025) | Item | Share Capital (RMB '000) | Share Premium (RMB '000) | Share Option Reserve (RMB '000) | Share Award Reserve (RMB '000) | Shares Held (RMB '000) | Retained Profits (RMB '000) | Equity Attributable to Shareholders of the Company (RMB '000) | Non-controlling Interests (RMB '000) | Total Equity (RMB '000) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | January 1, 2025 (Audited) | 431,299 | 7,681,080 | 405,821 | 94,882 | (738,726) | 15,120,057 | 21,897,088 | 7,623 | 21,904,711 | | Profit for the Period | — | — | — | — | — | 492,154 | 492,154 | — | 492,154 | | Other Comprehensive Income for the Period | — | — | — | — | — | — | 9,012 | — | 9,012 | | Total Comprehensive Income for the Period | — | — | — | — | — | 492,154 | 501,166 | — | 501,166 | | Share-based Payment Expenses Recognized | — | — | 113,320 | 120,817 | — | — | 234,137 | 11,119 | 245,256 | | Exercise of Share Options | 610 | 91,950 | (18,831) | — | — | — | 73,729 | — | 73,729 | | Lapsed Share Options | — | — | (31,347) | — | — | 31,347 | — | — | — | | Vesting of Share Awards | — | 12,500 | — | (25,372) | 12,872 | — | — | — | — | | Lapsed Share Awards | — | — | — | (16,887) | — | 16,887 | — | — | — | | Dividends Declared | — | (283,456) | — | — | 4,148 | — | (279,308) | — | (279,308) | | **June 30, 2025 (Unaudited)** | **431,909** | **7,502,074** | **468,963** | **173,440** | **(721,706)** | **15,660,445** | **22,426,812** | **18,742** | **22,445,554** | Condensed Consolidated Statement of Cash Flows [Cash Flow Overview](index=59&type=section&id=%E7%8E%B0%E9%87%91%E6%B5%81%E6%A6%82%E8%A7%88) For the six months ended June 30, 2025, net cash from operating activ

Core Viewpoint - The company is leveraging its R&D advantages to launch HNB products, aiming to capitalize on new industry trends and recover from previous regulatory challenges [1] Company Overview - Smoore International possesses strong R&D capabilities, particularly in ceramic core technology, and has established deep partnerships with major global tobacco companies [1] - The company is transitioning its business model from a device supplier to a tobacco business, opening new growth avenues with the launch of HNB products in collaboration with British American Tobacco [1][2] Industry Insights - The HNB segment is expected to accelerate its development, with a low penetration rate of approximately 6% in 2024, indicating significant growth potential [2] - The global traditional tobacco sales are declining, making new tobacco products a viable solution for market recovery, with 2025 anticipated as a pivotal year for major international tobacco companies [2] Market Dynamics - The HNB market is currently in a phase where supply is creating demand, with potential for increased penetration in large markets like the U.S. and China [2] - If HNB penetration in the U.S. reaches 15%, it could correspond to an incremental market size of $19.9 billion and a sales volume of 49.7 billion sticks [2] Product Development - The collaboration between Smoore and British American Tobacco on the Glo Hilo product combines their strengths, with Glo Hilo expected to compete effectively against Philip Morris's IQOS [2] - The latest Glo Hilo product features a quick preheating time of 3-5 seconds and high flavor fidelity, significantly enhancing consumer experience [2] Financial Projections - Revenue sharing for Glo Hilo is projected to be in the single to double-digit percentage range, with expected earnings per stick ranging from 0.04 to 0.11 RMB [2] - If HNB penetration increases to 12% and Glo Hilo market share reaches 25%, Smoore's annual profits from HNB could reach 6 to 7 billion RMB [2] Traditional Business Outlook - The U.S. vaping market is expected to grow from $19.81 billion in 2021 to $27.03 billion in 2024, with a CAGR of 11% [3] - Positive changes in the industry include FDA approvals for new flavors and increased enforcement against illegal products, which may benefit Smoore's vaping business [3] Long-term Strategy - The company is diversifying into medical and beauty vaping, along with special-purpose vaping, to build a sustainable future [3]

Investment Rating - The investment rating for the company is "Buy" and is maintained [12] Core Insights - Smoore International is the largest electronic vaporizer supplier globally, with growth potential unlocked by its technology positioning in HNB (Heated Not Burn) products [3][6] - The company's core business is recovering, benefiting from regulatory shifts in the industry and increasing market share among major clients [3][6] - The HNB business is expected to see significant growth, with a projected annual growth rate in the double digits and a current global penetration rate of less than 6% [3][7] Summary by Sections Introduction - Smoore International leverages its R&D advantages to launch HNB products, marking a new phase in the industry [6][17] - The company has transitioned from a pure equipment supplier to a tobacco business model, opening new growth avenues [6][17] Core Business - The HNB segment is poised for accelerated development, with a low penetration rate and high barriers to entry, indicating substantial growth potential [7][28] - The collaboration with British American Tobacco to launch Glo Hilo combines both companies' strengths, enhancing market competitiveness [7][28] Performance Outlook - The revenue-sharing model for Glo Hilo is expected to yield significant profits, with projections estimating annual profits for Smoore's HNB business to reach 6-7 billion RMB if market penetration increases [8][9] - The U.S. market presents a significant opportunity, with potential market size increases if HNB penetration rises to 15% [8][37] Traditional Business - The U.S. vaping market is expected to grow from $19.81 billion in 2021 to $27.03 billion in 2024, with a CAGR of 11% [9][20] - Regulatory changes in the U.S. are becoming more favorable, allowing for a recovery in the vaporizer business [9][20] Long-term Strategic Direction - The company is diversifying into medical and beauty vaporization, aiming for long-term growth across multiple sectors [10][19]

股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年8月31日 狀態: 新提交 致：香港交易及結算所有限公司 公司名稱: 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) FF301 呈交日期: 2025年9月1日 I. 法定/註冊股本變動 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | 於香港聯交所上市 (註1) | | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 06969 | 說明 | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | 法定/註冊股本 | | | 上月底結存 | | | 10,000,000,000 | USD | | 0.01 USD | | 100,000,000 | | 增加 / 減少 (-) | | | 0 | | | USD | | 0 | | 本月底結存 | | | 10,000,000,000 | USD | | 0.01 USD | | 100,000,00 ...