Core Viewpoint - Smoore International (06969.HK) experienced significant stock price volatility following the release of its Q3 2025 earnings report, which showed mixed results with high revenue growth but declining net profits [2][3]. Financial Performance - For Q3 2025, Smoore International reported revenue of approximately 4.197 billion RMB, marking a year-on-year increase of 27.2% and a quarter-on-quarter increase of 27.5% [3]. - The company's net profit for the same period was approximately 316.9 million RMB, reflecting a year-on-year decline of 16.4% but a quarter-on-quarter increase of 5.7% [3]. - Adjusted profit for Q3 was 444.2 million RMB, showing a year-on-year growth of 4.0% and a quarter-on-quarter growth of 4.8% [3]. Business Segments - Smoore International operates primarily in two business segments: 1. Business-to-Business (B2B) services, providing electronic vaporization devices and HNB (Heated Not Burn) solutions to global tobacco giants 2. Research, design, manufacturing, and sales of proprietary electronic vaporization products and vaporization beauty products [4]. Revenue Drivers - The revenue growth was attributed to the strong performance of the B2B segment and the proprietary brand business, with significant increases in product shipments and successful launches of new compliant electronic vaporization products [5]. - The proprietary brand business also saw healthy growth due to successful product iterations and increased marketing efforts tailored to local markets [5]. Profitability Challenges - Despite strong revenue growth, Smoore International faces significant pressure on profitability due to rising costs associated with global market expansion, compliance, R&D, and marketing [5]. - Analysts remain cautious about the company's future profit outlook, with expectations of a 40% decline in net profit year-on-year for 2025, despite a projected 20% revenue growth driven by electronic cigarette sales [6].

Core Viewpoint - The economic landscape in China is showing signs of expansion, with manufacturing PMI improving, while corporate profitability remains under pressure [1] Group 1: Manufacturing Sector - The Caixin China Manufacturing PMI for June recorded at 50.4, an increase of 2.1 percentage points from the previous month, aligning with April's level [1] - The manufacturing sector is experiencing a notable recovery, which is significantly higher than the decline observed in the services sector [1] Group 2: Services Sector - The Caixin China Services PMI decreased by 0.5 percentage points to 50.6, marking the lowest level since the fourth quarter of 2024 [1] Group 3: Composite PMI - The Caixin China Composite PMI rose by 1.7 percentage points to 51.3 in June, indicating a return to the expansion zone [1] Group 4: Economic Outlook - There is a resurgence in supply and demand, but employment continues to decline, and while corporate costs remain stable, sales prices are on a downward trend [1] - Business confidence is waning, and there are concerns about increased economic downward pressure in the second half of the year, highlighting the importance of the implementation of previous incremental policies and the potential for policy intensification [1]