Investment Rating - The investment rating for the company is "Accumulate" (maintained) [1] Core Views - The company has shown rapid revenue growth, with a 21.8% year-on-year increase in total revenue for the first three quarters of 2025, amounting to 10.21 billion yuan [8] - The HNB (Heated Not Burned) products are gradually being promoted, with positive feedback from customers and plans for expansion into new markets [8] - The company is expected to benefit from stricter regulations in the electronic vaporization market, leading to a recovery in its business [8] Financial Summary - Total revenue projections for 2023A, 2024A, 2025E, 2026E, and 2027E are 11,168 million yuan, 11,799 million yuan, 13,722 million yuan, 16,166 million yuan, and 18,395 million yuan respectively, with year-on-year growth rates of -8.04%, 5.64%, 16.30%, 17.81%, and 13.79% [1] - The net profit attributable to the parent company for the same years is projected to be 1,645 million yuan, 1,303 million yuan, 1,331 million yuan, 2,219 million yuan, and 2,893 million yuan, with year-on-year growth rates of -34.47%, -20.78%, 2.11%, 66.75%, and 30.37% [1] - The latest diluted EPS (Earnings Per Share) is forecasted to be 0.27 yuan, 0.21 yuan, 0.21 yuan, 0.36 yuan, and 0.47 yuan for the years 2023A to 2027E [1] Market Data - The closing price of the company's stock is 15.77 HKD, with a market capitalization of approximately 89.18 billion HKD [5] - The price-to-book ratio is 3.97 [5] - The company has a total share capital of 6,193.04 million shares [6]

Investment Rating - The investment rating for the company is "Buy" with a target price set for the next six months [6][14]. Core Insights - The company achieved a record high revenue of 41.97 billion yuan in Q3 2025, marking a 27.5% increase quarter-on-quarter and a 27.2% increase year-on-year. However, net profit for the same quarter was 3.17 billion yuan, reflecting a 16.4% year-on-year decline [1][2]. - The HNB (Heated Not Burned) business saw a significant increase in shipment volumes, contributing to the overall revenue growth. The company is also expanding its self-owned brand business and enhancing localized marketing efforts [2][5]. - The medical aerosol business has made a breakthrough with the submission of an ANDA application for Breo® Ellipta®, which, if approved, could provide a 180-day market exclusivity in the U.S. This product is expected to generate significant sales in the future [4][5]. Summary by Sections Financial Performance - For the first three quarters of 2025, the company reported revenues of 102.10 billion yuan, a year-on-year increase of 21.8%. Adjusted net profit was 11.82 billion yuan, a slight increase of 0.1% year-on-year [1]. - In Q3 2025, the company achieved revenues of 41.97 billion yuan, with an adjusted net profit of 4.44 billion yuan, reflecting a 4.0% year-on-year increase [1][2]. Business Growth - The company’s HNB and electronic vaporization businesses both experienced growth, with strategic clients successfully launching new products in major global markets [2]. - The GloHilo product line is being introduced in Italy, Poland, and Serbia, aiming to reach 50 million adult consumers of smoke-free products by 2030 [3]. Future Outlook - The company is expected to see significant contributions from the HNB business starting in 2026, with adjusted net profit forecasts for 2025-2027 revised to 13.92 billion, 20.23 billion, and 27.59 billion yuan respectively [5].

Investment Rating - The investment rating for Smoore International (6969.HK) is not explicitly stated in the provided documents, but the report indicates a positive outlook based on revenue growth and market opportunities [1]. Core Insights - Smoore International reported a record high revenue of 10.21 billion yuan for the first three quarters of 2025, representing a year-on-year increase of 21.8%. The total comprehensive income for the period was 785 million yuan, down 25.5% year-on-year. In Q3 alone, revenue reached 4.196 billion yuan, with a quarter-on-quarter increase of 27.5% and a year-on-year increase of 27.2% [1]. - The company is expected to benefit from stringent global regulations, particularly in the vaping sector, with steady growth anticipated in the U.S. and high growth in Europe due to the introduction of compliant products [2]. - The HNB (Heated Not Burned) segment is gradually contributing to revenue growth, with expectations for increased shipments and market expansion in key regions like Poland and Italy [2]. - The adjusted net profit margin for Q3 2025 was approximately 10.6%, down from 13.0% in Q3 2024, primarily due to changes in product mix affecting gross margins. However, the company is optimizing its expense ratios, which are expected to decline as HNB product sales increase [3]. Financial Summary - For the fiscal years 2024 to 2027, the projected total revenue is as follows: - 2024: 11.799 billion yuan - 2025: 14.610 billion yuan - 2026: 17.669 billion yuan - 2027: 21.253 billion yuan - The expected growth rates year-on-year are 6% for 2024, 24% for 2025, 21% for 2026, and 20% for 2027 [4]. - The projected net profit attributable to the parent company is: - 2024: 1.303 billion yuan - 2025: 1.088 billion yuan - 2026: 2.040 billion yuan - 2027: 3.050 billion yuan - The corresponding P/E ratios are projected to be 57.75X for 2024, 83.46X for 2025, 44.52X for 2026, and 29.78X for 2027 [4][6].

Core Viewpoint - Daiwa's report indicates that Smoore International (06969) achieved a record high total revenue of 4.2 billion RMB in Q3, representing a year-on-year growth of 27%, the largest increase since 2021 [1] Financial Performance - The company's Q3 revenue exceeded market expectations by at least 10%, although the profit margin beat was smaller than anticipated [1] - Management provided guidance that the heated tobacco (HNB) business is expected to contribute at least 1.2 billion RMB in revenue for the year, which is approximately 8% of total sales [1] Earnings Forecast - Daiwa has lowered its earnings per share forecast for Smoore International for the years 2025 to 2027 by 6% to 20%, anticipating a slower recovery in profit margins [1] - Despite the adjustments, Daiwa maintains a "Outperform" rating for the stock, with a slight increase in the target price from 16 HKD to 17 HKD [1] Business Outlook - The report highlights a positive trend in the core business, particularly in the HNB segment, with growth momentum not solely reliant on a single client, British American Tobacco [1] - Although profit visibility remains limited, the improvement in the core business is expected to support a stabilization in the company's stock price [1]

Core Viewpoint - Daiwa's report indicates that Smoore International (06969) achieved a record high total revenue of 4.2 billion RMB in Q3, representing a year-on-year growth of 27%, the largest increase since 2021 [1] Financial Performance - Q3 revenue exceeded market expectations by at least 10%, although the profit beat was modest [1] - The company's management provided guidance indicating that the heated tobacco (HNB) business is expected to contribute at least 1.2 billion RMB in revenue for the year, which is approximately 8% of total sales [1] Market Outlook - Daiwa has lowered its earnings per share forecast for Smoore International for 2025 to 2027 by 6% to 20%, anticipating a slower recovery in profit margins [1] - Despite limited visibility on profitability, the trend of improvement in the core business is expected to support a stabilization in the company's stock price [1] Investment Rating - Daiwa maintains an "Outperform" rating on Smoore International, with a slight increase in the target price from 16 HKD to 17 HKD [1]

Core Viewpoint - Daiwa's research report indicates that Smoore International's total revenue for Q3 increased by 27% year-on-year to HKD 4.2 billion, marking a historical high and the largest increase since 2021 [1] Group 1: Financial Performance - The management provided guidance for the first time, expecting the heated tobacco (HNB) business to contribute at least HKD 1.2 billion in revenue for the full year, which is approximately 8% of total sales [1] - The key positive factor is the improvement in the HNB business, with growth momentum not solely reliant on a single client, British American Tobacco [1] Group 2: Market Outlook - Despite limited visibility on profitability, the trend of improvement in the core business is expected to help stabilize the company's stock price [1] - Daiwa has revised its earnings per share forecast for Smoore International for 2025 to 2027 down by 6% to 20%, anticipating a slower recovery in profit margins [1] Group 3: Investment Rating - Daiwa maintains a "Outperform" rating for Smoore International, with a slight increase in the target price from HKD 16 to HKD 17 [1]

Core Viewpoint - The company reported a significant revenue increase in Q3 2025, driven by the HNB and vaping business, despite a decline in net profit due to initial low-margin sales and ongoing investments in R&D [1][2] Financial Performance - For Q1-Q3 2025, the company achieved revenue of 10.21 billion yuan, a year-on-year increase of 21.8%, with net profit of 809 million yuan, down 23.8% [1] - In Q3 2025, revenue reached 4.197 billion yuan, up 27.2% year-on-year, while net profit was 317 million yuan, a decrease of 16.4% [1] Business Analysis - The HNB business is expected to contribute significantly to revenue, with the HNB product "hilo" launched in Japan and Poland, leading to strong sales [1] - The vaping business is projected to see double-digit growth in Q3 2025, benefiting from regulatory changes in Europe and increased enforcement against illegal products in the U.S. [1] - The company is focusing on brand development and market expansion, with a steady increase in market share for its own brands [1] - The adjusted net profit for Q3 2025 showed a year-on-year increase of 4.0% to 444 million yuan, with an adjusted net profit margin of 10.6% [1] Growth Outlook - The expansion of the legal vaping market in Europe and the U.S. is expected to continue, with the HNB product "glo hilo" gaining traction in Poland [2] - The company is positioned uniquely in the market as a supplier in both vaping and HNB categories, indicating a strong growth potential [2] Earnings Forecast and Valuation - The company forecasts EPS of 0.22, 0.39, and 0.59 yuan for 2025-2027, with corresponding PE ratios of 67, 37, and 25 times [2]

Group 1 - The company reported Q3 2025 financial data, with revenue of 4.197 billion yuan, a year-on-year increase of 27.5%, and adjusted profit of 444 million yuan, a year-on-year increase of 4.8% [1] - HNB is expected to become a major growth driver, with significant revenue increase anticipated due to the pre-production nature and the full rollout of hilo in Japan, leading to substantial sequential growth in sales [1] - The ODM+ strategy has been further validated, with satisfactory growth from new product iterations, and overall growth expected to exceed double digits as new compliant products are launched [1] Group 2 - Emerging businesses are expected to elevate the company's valuation, with the subsidiary successfully submitting an ANDA for Breo Ellipta, which is used for asthma and COPD treatment, indicating potential for further valuation uplift [1] - The company anticipates that HNB will become a primary source of profit release by 2026, with traditional vaping business valuation solidifying [2] - Revenue projections for 2025-2027 are 14.2 billion, 16.9 billion, and 19.5 billion yuan, with corresponding net profits of 1.395 billion, 1.898 billion, and 2.368 billion yuan, leading to PE ratios of 64.53x, 47.44x, and 38.02x respectively, maintaining a "buy" rating [2]

Summary of Smoore International's Conference Call Company Overview - **Company**: Smoore International - **Industry**: Electronic smoking devices and related products Key Points and Arguments Financial Performance - **Q3 Revenue Growth**: Smoore International reported a 27.5% increase in revenue for Q3 2025, exceeding market expectations, with adjusted profit rising by 4.8% quarter-over-quarter [2][3] - **HNB Product Sales**: The strong performance was driven by robust sales of Heat-Not-Burn (HNB) products, with expectations of at least 1.2 billion RMB in annual revenue from HNB [3][4] - **Traditional Vaping Products**: The traditional vaping segment also saw significant growth, particularly in Europe, due to the introduction of new products following a ban on disposable e-cigarettes [2][3] Market Dynamics - **European Market**: The European market outperformed overall company growth, driven by regulatory changes and the introduction of new products [2][5] - **U.S. Market Recovery**: The U.S. market is recovering more slowly, but stricter regulations on compliant products are creating opportunities for Smoore's partners, such as British American Tobacco's VUSE brand [5] Strategic Initiatives - **Expansion of HNB Markets**: Smoore is entering more core markets for HNB products, including Poland and Italy, aiming to transition from the initial development phase to a more expansive growth phase [7] - **Collaboration with British American Tobacco**: The partnership with British American Tobacco is seen as a significant growth opportunity, enhancing Smoore's product offerings and market reach [4][10] Product Development - **Medical Nebulization**: Smoore is investing heavily in the medical nebulization sector, with expectations to generate revenue starting in 2026. The company has submitted multiple products for FDA approval [4][11] - **Free Brand WAPER**: The company is increasing market share for its free brand WAPER through enhanced channel coverage and localized operations, despite limited elasticity in this segment [6] Future Outlook - **Profitability Expectations**: While current profits are not exceptionally high, Smoore anticipates improved profitability from 2026 onwards, driven by regulatory changes and market share expansion [9] - **Valuation and Market Potential**: Following recent stock price adjustments, Smoore's valuation is seen as attractive, with a static P/E ratio of 58x for 2025, expected to drop to 39x in 2026 and 29x in 2027, indicating significant future earnings potential [12] Long-term Growth Areas - **Beauty Nebulization**: The beauty nebulization segment is part of Smoore's long-term strategy, expected to follow the medical nebulization developments, with promising growth potential [13] New Business Contributions - **Initial Profit Contributions**: New business segments are expected to have limited profit contributions initially, which is typical for early-stage promotions. The focus is on market share, with profitability expected to improve as sales volumes increase in subsequent years [14] Additional Important Insights - **Production Capacity**: Smoore has automated production capabilities for 2 million devices and plans to increase this to over 5 million, with monthly production of 2 million cartridges [10] - **Market Positioning**: Smoore positions itself as a technology platform, providing differentiated solutions to various tobacco companies, not just British American Tobacco [7][8]

Investment Rating - The investment rating for the company is "Buy" (maintained) [2] Core Insights - The company reported a significant revenue and profit increase in Q3 2025, with revenue reaching 4.197 billion yuan, a year-on-year growth of 27.5%, and adjusted profit of 444 million yuan, up 4.8% year-on-year [7] - The HNB (Heat Not Burn) segment is expected to become a major growth driver, with substantial sales growth anticipated in Japan and Europe [7] - The ODM+ strategy has shown satisfactory growth due to successful product iterations, with overall growth expected to exceed double digits [7] - The valuation of the company is expected to rise with the introduction of new compliant products and the recent FDA acceptance of a generic drug application for Breo® Ellipta® [7] - The company forecasts revenues of 14.2 billion, 16.9 billion, and 19.5 billion yuan for 2025, 2026, and 2027 respectively, with corresponding net profits of 1.395 billion, 1.898 billion, and 2.368 billion yuan [7] Financial Performance Summary - Revenue projections for the company are as follows: 11,168 million yuan in 2023, 11,799 million yuan in 2024, 14,200 million yuan in 2025, 16,900 million yuan in 2026, and 19,500 million yuan in 2027, with a revenue growth rate of 20.35% in 2025 [6][8] - The net profit forecast shows a decline in 2024 to 1,303 million yuan, followed by a recovery to 1,395 million yuan in 2025, and further growth to 1,898 million yuan in 2026 and 2,368 million yuan in 2027 [6][8] - The company's EPS is projected to be 0.23 yuan in 2025, 0.31 yuan in 2026, and 0.38 yuan in 2027, with corresponding PE ratios of 64.53x, 47.44x, and 38.02x [6][8]