Investment Rating - Buy rating maintained for Smoore International (6969 HK) [1] Core Views - Smoore International's 2024H1 results were largely in line with expectations, with revenue of RMB 5 037 million (-1 7% YoY) and net profit of RMB 683 million (-4 8% YoY) [1] - The company's self-branded business showed strong growth, with revenue increasing by 71 9% YoY to RMB 1 116 million, driven by new product launches and market share gains [1] - Smoore's gross margin improved by 1 8 percentage points to 38 0% in 2024H1, mainly due to the expansion of higher-margin self-branded business and cost optimization efforts [1] - The company is expected to benefit from industry consolidation amid tightening global regulations, leveraging its compliance capabilities, technological advantages, and flexible business model [1] Business Performance - Self-branded business revenue grew significantly in Europe (88% YoY) and the US (20 6% YoY) in 2024H1 [1] - Enterprise client business revenue declined by 12 3% YoY, with mixed performance across regions: US (-9 8%), Mainland China (+41 4%), Europe (-16 0%) [1] - Smoore increased its R&D investment, particularly in medical vaporization and heat-not-burn products, with R&D expense ratio rising by 3 08 percentage points to 15 09% [1] Financial Projections - Revenue is forecasted to grow 6% in 2024, 15% in 2025, and 11% in 2026, reaching RMB 11 811 million, RMB 13 583 million, and RMB 15 033 million respectively [1][2] - Net profit is expected to be RMB 1 632 million (-1% YoY) in 2024, RMB 1 915 million (+17% YoY) in 2025, and RMB 2 134 million (+11% YoY) in 2026 [1][2] - EPS projections are RMB 0 27 (2024), RMB 0 31 (2025), and RMB 0 35 (2026), with corresponding P/E ratios of 31 38x, 26 75x, and 23 99x [1][2] Financial Ratios - ROE is expected to remain stable at around 7 08%-7 88% from 2024 to 2026 [2] - Gross margin is projected to maintain at approximately 38 0%-38 4% over the next three years [5] - The company's net debt ratio is expected to stay negative, indicating a strong financial position [5]
思摩尔国际：24H1自有品牌高增长，盈利能力稳步提升