Core Viewpoint - The company reported its 2025 first-half results, showing revenue growth driven by effective enforcement actions against non-compliant products and the rapid launch of innovative compliant products to meet market demand [1] Group 1: Financial Performance - In H1 2025, the company achieved revenue of 6.013 billion yuan, a year-on-year increase of 18.3%, while net profit was 492 million yuan, a decrease of 28.0% [1] - Adjusted net profit was 737 million yuan, down 2.1% year-on-year [1] - The gross margin for H1 2025 was 37.3%, a decrease of 0.5 percentage points year-on-year [2] Group 2: Business Segments - The self-owned brand business generated revenue of 1.274 billion yuan, up 14.1% year-on-year, with significant growth in Europe and other regions [1] - Revenue from the HNB (Heated Not Burned) business is expected to grow significantly, with the global market projected to reach approximately 66.86 billion USD by 2029, growing at a CAGR of about 10.1% from 2024 to 2029 [2] Group 3: Strategic Initiatives - The company is increasing marketing investments and enhancing employee incentives to solidify long-term competitive advantages [2] - The company is focusing on supporting strategic clients in launching high-end HNB product series in key markets, with positive early consumer feedback [2] Group 4: Future Outlook - The company expects revenue growth for 2025-2027 to be 13.45 billion, 15.49 billion, and 17.66 billion yuan respectively, with year-on-year growth rates of 14%, 15%, and 14% [3] - The company anticipates a significant increase in net profit in 2026 and 2027, with projections of 1.812 billion and 2.595 billion yuan respectively [3]

Summary of Smoore International's Conference Call Company Overview - **Company**: Smoore International - **Industry**: Vapor Technology and Tobacco Industry Key Financial Performance - **Revenue**: In the first half of 2025, Smoore International reported revenue of 9 billion yuan, a year-on-year increase of 19.5% [2][4] - **Regional Performance**: - European market revenue growth reached 38% due to compliance product sales following a one-time ban [2][4] - Revenue growth in the US and China was 1.5% and -6.1%, respectively [2][4] - **Profit**: The company achieved a profit of 4.92 billion yuan, a decline of 28% year-on-year, primarily due to increased stock incentive amortization, administrative expenses, and marketing costs [2][5] - **Adjusted Net Profit**: Adjusted net profit was 7.37 billion yuan, down 2.1% year-on-year, but actual growth was noted after excluding a 70 million yuan tax impact from OECD's dual pillar international tax [2][5] Future Outlook - **Second Half Expectations**: Smoore International anticipates maintaining double-digit revenue growth in the second half of 2025, with profits expected to remain flat [2][6] - **Key Focus Areas**: - Sales performance of HNB products in Japan in September [2][6] - Progress of British American Tobacco's Halo product launch in Europe, which has the largest marketing budget in its history [2][6] Emerging Business Developments - **Medical Vaporization**: The company is successfully collaborating with major pharmaceutical companies, aiming for FDA approval within the next two to three years [2][7] - **Beauty Vaporization**: The Lancome brand achieved revenue of 31 million yuan in the first half of the year, with expectations of significant profit contributions in the next two years [2][7] Industry Perspective - **Market Position**: Smoore International is viewed as a leader in vapor technology, with a positive outlook on the transformation of the tobacco industry, particularly in the HNB segment [3][8] - **Traditional Business Recovery**: The traditional business is showing signs of recovery, especially in the European market, which has exceeded expectations [2][8] - **Future Profit Contribution**: HNB business is projected to contribute over 1 billion yuan in profit increment next year, while other emerging businesses will take two to three years to reflect in financial statements [2][8]

Investment Rating - The report does not provide a specific investment rating for the company [1] Core Insights - The company reported a revenue of 6.013 billion yuan for H1 2025, representing a year-on-year increase of 18.3%, while net profit decreased by 28.0% to 492 million yuan [1] - The company's proprietary brand business revenue reached 1.274 billion yuan in H1 2025, up 14.1% year-on-year, with significant growth in the European market [2] - The company is experiencing a recovery in the European vaping market, with a strong response to new compliant products, while the U.S. market is expected to stabilize due to tightening regulations [3] - The company is optimizing R&D expenses and maintaining stable operational capabilities, with a gross margin of 37.3% and an adjusted net profit margin of 12.3% in H1 2025 [4] Financial Performance Summary - For 2025-2027, the company is projected to achieve net profits of 1.228 billion yuan, 2.013 billion yuan, and 3.058 billion yuan, with corresponding P/E ratios of 103.4X, 63.1X, and 41.6X [4] - The total revenue is expected to grow from 11.799 billion yuan in 2024 to 19.291 billion yuan in 2027, with a year-on-year growth rate of 18% in 2027 [6] - The company's cash flow from operating activities is projected to improve significantly, reaching 2.680 billion yuan by 2027 [9]

Group 1 - As of August 21, SMOORE International (06969.HK) closed at HKD 23.460, up 6.25% from the previous trading day, with an intraday high of HKD 24.120, marking a nearly one-year high [1] - On that day, the net inflow of funds was HKD 165.748 million, with no specific data provided for inflows and outflows [1] Group 2 - SMOORE International Holdings Limited was established in 2009 and is a global leader in providing atomization technology solutions, owning one proprietary brand (VAPORESSO) and three technology brands (FEELM, CCELL, METEX) [2] - The company is headquartered in Bao'an District, Shenzhen, with nearly 20,000 employees [2] - SMOORE was officially listed on the Hong Kong Stock Exchange on July 10, 2020, under the stock code HK6969 [2] - The company places a strong emphasis on technological innovation and research and development, with a total of 9 research institutes globally and a research team of over 1,000, accounting for nearly half of its non-production staff [2] - As of June 30, 2021, SMOORE had applied for a total of 2,612 patents and 566 trademarks, with 1,272 patents and 360 trademarks granted [2] - The company has received various certifications and honors, including "National CNAS Laboratory Certification," "International UL Safety Laboratory Certification," "National High-tech Enterprise Certification," "ISO9001 Quality System Certification," "GSV Factory Safety Certification," "AEO Advanced Customs Certification," and "Shenzhen Bao'an District Mayor's Quality Award" [2]

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected investment return that will outperform the market benchmark by more than 15% over the next 6-12 months [9]. Core Insights - The electronic vaporization business is experiencing a sustained recovery, while the HNB (Heat-not-Burn) business is expected to accelerate its growth [4][9]. - The company reported a revenue of 6.013 billion yuan for the first half of 2025, representing an 18.3% year-on-year increase, although net profit decreased by 28.0% to 492 million yuan [4]. - The company has successfully launched innovative compliant products to meet market demands, contributing to the recovery of its vaporization business [5]. Summary by Relevant Sections Financial Performance - For the first half of 2025, the company achieved a revenue of 6.013 billion yuan, up 18.3% year-on-year, while net profit was 492 million yuan, down 28.0% [4]. - Adjusted net profit for the same period was 737 million yuan, reflecting a slight decline of 2.1% year-on-year [4]. Business Segments - The self-owned brand business generated 1.274 billion yuan in revenue, a 14.1% increase year-on-year, with significant growth in Europe and other regions [5]. - The company’s revenue from enterprise clients reached 4.739 billion yuan, marking a 19.5% year-on-year growth [5]. HNB Business Development - The global HNB product market is projected to reach approximately 66.86 billion USD by 2029, with a compound annual growth rate of about 10.1% from 2024 to 2029 [7]. - The company has made significant strides in supporting strategic clients to launch high-end HNB product lines in key markets, with positive early consumer feedback [7]. Future Outlook - The company expects to see continued growth in its HNB business and emerging sectors such as vaporization for medical and beauty applications, which are anticipated to enter a growth phase [9]. - Revenue projections for 2025-2027 are estimated at 13.45 billion, 15.49 billion, and 17.66 billion yuan, respectively, with year-on-year growth rates of 14%, 15%, and 14% [9].

Core Viewpoint - Smoore International (06969.HK) reported a revenue increase of 18.3% year-on-year for the first half of 2025, but net profit decreased by 28.0%, indicating challenges in managing expenses despite revenue growth [1][2]. Financial Performance - Revenue for the six months ended June 30, 2025, was CNY 60.13 billion, up from CNY 50.84 billion in the same period last year, reflecting an 18.3% increase [2]. - Gross profit reached CNY 22.44 billion, a 16.6% increase from CNY 19.24 billion year-on-year [2]. - Gross margin slightly decreased to 37.3% from 37.8%, a drop of 0.5 percentage points [2]. - Profit before tax was CNY 698.74 million, down 13.9% from CNY 811.56 million [2]. - Net profit for the period was CNY 492.15 million, a decrease of 28.0% compared to CNY 683.20 million in the previous year [2]. - Total comprehensive income for the period was CNY 501.17 million, down 30.8% from CNY 724.60 million [2]. - Adjusted net profit was CNY 737.41 million, a slight decrease of 2.1% from CNY 752.85 million [2]. - Adjusted net profit margin fell to 12.3% from 14.8%, a decline of 2.5 percentage points [2]. Dividend Announcement - The board declared an interim dividend of HKD 0.20 per share for the six months ended June 30, 2025, compared to HKD 0.05 per share for the same period last year [3]. - The interim dividend is expected to be paid on September 25, 2025, to shareholders listed on the register as of September 11, 2025 [3].

Core Viewpoint - Smoore International (6969.HK) shares rose over 9% to HKD 24.12, reaching the highest level since June 2022, following the release of its financial results for the first half of the year [1] Financial Performance - The company reported a revenue of HKD 60.13 billion for the six months ending June 30, representing an increase of 18.29% year-on-year [1] - Shareholder profit decreased to HKD 4.92 billion, down 27.96% year-on-year, with basic earnings per share at HKD 0.0808 [1] Dividend Announcement - To celebrate its 5th anniversary since listing and to express gratitude to shareholders, the company declared an interim dividend of HKD 0.20 [1]

Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of HKD 27.00 [1][5][6] Core Views - The company's revenue for the first half of 2025 reached HKD 6.013 billion, representing a year-on-year increase of 18.3%, while net profit decreased by 28.0% to HKD 0.492 billion. Adjusted net profit was HKD 0.737 billion, down 2.1% year-on-year, aligning with previous forecasts [1][5] - The growth in revenue is attributed to the strengthening of law enforcement and regulatory policies in the US and parts of Europe, leading to a recovery in the company's B2B business and stable growth in its B2C brand business. The decline in net profit is primarily due to increased non-cash share-based payments and rising costs associated with expanding proprietary brand operations [1][2] - The company is expected to continue its recovery in the vaping sector, supported by ongoing improvements in regulatory frameworks in the US and Europe, while new business lines such as HNB (Heated Not Burned) are anticipated to grow significantly [1][5] Summary by Sections Revenue and Profitability - In the first half of 2025, the company's B2B business generated revenue of HKD 4.939 billion, up 19.5% year-on-year, with significant growth in Europe (38.0% increase) due to new compliance regulations. The US market saw a modest increase of 1.5% despite a predominance of non-compliant products [2] - The B2C business achieved revenue of HKD 1.274 billion, a 14.1% increase, with notable performance from the "Lan Zhi" beauty brand in China, which saw a staggering 2595% growth [3] Cost Structure and Expenses - The company's gross margin for the first half of 2025 was 37.3%, a slight decrease of 0.5 percentage points year-on-year, primarily due to rising labor and indirect costs. The distribution and sales expenses increased due to heightened marketing efforts for proprietary brands [4] - The adjusted net profit margin for the first half of 2025 was 12.3%, down 2.5 percentage points year-on-year, reflecting the impact of increased share-based payment expenses [4] Profit Forecast and Valuation - Profit forecasts have been adjusted downward, with expected net profits for 2025, 2026, and 2027 at HKD 1.007 billion, HKD 1.830 billion, and HKD 2.559 billion, respectively. The adjusted profits are projected to be HKD 1.267 billion, HKD 2.140 billion, and HKD 2.759 billion for the same years [5][10] - The target price is set at HKD 27.00, based on a 71x PE ratio for 2026, reflecting the company's potential for long-term growth in the vaping sector and new markets [5][12]

Core Viewpoint - Smoore International (06969) reported a strong performance in its interim results, with revenue growth driven by effective enforcement actions against non-compliant products and the company's ability to quickly launch innovative compliant products to meet market demand [1] Financial Performance - The company achieved a revenue of RMB 6.013 billion in the first half of the year, representing an increase of 18.3% year-on-year [1] - Adjusted profit for the period was RMB 737 million, a decrease of 2.1% year-on-year, while net profit was RMB 492 million, down 27.96% year-on-year [1] Business Segments - The ToB (business-to-business) segment generated approximately RMB 4.739 billion in revenue, reflecting a year-on-year growth of about 19.5% [1] - The proprietary brand electronic vaporization business achieved revenue of approximately RMB 1.274 billion, with a year-on-year increase of about 14.1%, supported by the strong performance of the leading brand VAPORESSO [1]

Core Insights - Smoore International (06969) experienced a stock price increase of over 8% post-earnings report, currently trading at HKD 23.12 with a transaction volume of HKD 297 million [1] Financial Performance - For the first half of the year, the company reported revenue of RMB 6.013 billion, representing a year-on-year increase of 18.3% [1] - Adjusted profit for the period was RMB 737 million, a decrease of 2.1% year-on-year, while net profit fell to RMB 492 million, down 27.96% year-on-year [1] Market Dynamics - Revenue growth was primarily driven by effective enforcement actions against non-compliant products in major global markets, alongside the company's agile ability to launch innovative compliant products to meet market demand [1] - The company's ToB (business-to-business) segment generated approximately RMB 4.739 billion in revenue, reflecting a year-on-year growth of about 19.5% [1] Brand Performance - The self-branded electronic vaporization business achieved revenue of approximately RMB 1.274 billion, marking a year-on-year increase of 14.1%, supported by the strong performance of the industry-leading brand VAPORESSO [1]