Core Viewpoint - The recent launch of Glo Hilo and Glo Hilo Plus heating non-combustible devices in Poland marks a significant step in the expansion of HNB (Heated Not Burned) business, with a focus on diverse product offerings and market penetration strategies [1][2]. HNB Business Expansion - Glo Hilo has been launched in Japan since September 1, with positive trial feedback and higher-than-expected shipment volumes [1]. - In Poland, Glo Hilo was officially released on September 18, featuring improved device options and a wider variety of 13 flavored smoke sticks (8 tea-based and 5 tobacco flavors) [1]. - Marketing efforts include a promotional campaign by British American Tobacco, offering four packs of smoke sticks with the purchase of heating devices [1]. - Future expansion plans include entering the Italian market in 2024, which is projected to be the third-largest global HNB market [1]. Vaping Market Dynamics - The U.S. has intensified regulation of the illegal vaping market, with a significant seizure of unauthorized electronic cigarette products valued at approximately $86.5 million [2]. - Exports of electronic cigarettes from China to the U.S. are expected to decline by about 23% year-on-year from May to August 2025, primarily due to tightening regulations and tariffs [2]. - In Europe, the company is responding to a ban on disposable products by quickly launching innovative compliant products, which is anticipated to drive business growth and improve product structure [2]. Growth Potential and Financial Forecast - The vaping segment shows a clear recovery trend, benefiting from regulatory shifts and increased market share among major clients [3]. - The HNB business has significant growth potential, with Glo Hilo expected to capture market share in a sector where global penetration is currently only about 6% [3]. - Long-term growth prospects are bolstered by developments in medical vaping, special-purpose vaping, and beauty vaping, with notable progress in obtaining medical device certifications [3]. - The company forecasts net profits of 1.3 billion, 2.04 billion, and 2.89 billion yuan for 2025-2027, corresponding to P/E ratios of 78, 50, and 35 [3].

Investment Rating - The investment rating for the company is "Buy" and is maintained [9] Core Viewpoints - The Glo Hilo new market is steadily advancing, with the vaporization business expected to recover rapidly. The Glo Hilo products have been launched in Poland and Japan, with positive initial feedback and promotional activities in place [10][10] - The company is well-positioned to benefit from regulatory changes in the U.S. market, which may lead to growth opportunities for its vaporization business [10] - The overall growth potential of the company is strong, driven by the recovery of its main business and the expansion of its HNB (Heated Not Burned) products [10] Summary by Relevant Sections HNB Business - Glo Hilo has launched in Japan and Poland, with positive sales feedback and a variety of product offerings including 13 flavors of tobacco and tea-based sticks [6][10] - The marketing strategy includes promotional offers to boost initial sales [10] Vaporization Business - The U.S. market is seeing increased regulation of illegal products, which may provide a favorable environment for compliant products [10] - The company has introduced innovative compliant products to meet market demand, which is expected to drive growth [10] Fundamental Trends - The recovery trend in the vaporization business is clear, with expectations of accelerated growth due to improved market share among major clients [10] - The company anticipates significant growth in the HNB segment, with a current global market penetration of only about 6% [10] - Long-term growth opportunities are also present in medical and specialty vaporization products [10] Profit Forecast - The company is projected to achieve net profits of 1.3 billion, 2.04 billion, and 2.89 billion RMB for the years 2025 to 2027, with corresponding PE ratios of 78, 50, and 35 [10]