Investment Rating - The report does not provide a specific investment rating for the company [1] Core Views - The company has shown steady growth in its vaping segment, while the future of Heat-Not-Burn (HNB) products looks promising, although increased expenditure is impacting short-term profitability [1][2] - The company is expected to face challenges with disposable products due to tightening regulations in various countries, but there is potential for growth in the APV and HNB segments [2][3] - The U.S. market is crucial for the company, with expectations for the launch of new HNB products, which could enhance market share and revenue [3] Financial Performance Summary - In Q1 2025, the company reported a net profit of 192 million yuan, a decrease of 43.4% year-on-year, with total comprehensive income of 208 million yuan, down 32.9% year-on-year [1] - Revenue for 2024 is projected at 11.799 billion yuan, with a growth rate of 6%, and net profit expected to be 1.303 billion yuan, reflecting a decline of 21% year-on-year [5][6] - The company’s adjusted net profit forecasts for 2025, 2026, and 2027 are 1.411 billion yuan, 2.337 billion yuan, and 3.032 billion yuan, respectively, with corresponding P/E ratios of 39.9X, 24.1X, and 18.6X [4][5] Market and Product Insights - The company is positioned as a key supplier for British American Tobacco, which is expanding its HNB product offerings in various markets, including the U.S. [3] - The anticipated launch of the IQOS ILUMA in the U.S. is expected to further pressure traditional cigarette sales, leading to increased focus on HNB product development [3] - The company is expected to benefit from its unique production capabilities and technology, which may help mitigate tariff pressures in the U.S. market [4]
思摩尔国际：雾化稳健成长、HNB未来可期，费用投放影响短期盈利