Investment Rating - The investment rating for the company is "Accumulate" (maintained) [1] Core Views - The company has shown rapid revenue growth, with a 21.8% year-on-year increase in total revenue for the first three quarters of 2025, amounting to 10.21 billion yuan [8] - The HNB (Heated Not Burned) products are gradually being promoted, with positive feedback from customers and plans for expansion into new markets [8] - The company is expected to benefit from stricter regulations in the electronic vaporization market, leading to a recovery in its business [8] Financial Summary - Total revenue projections for 2023A, 2024A, 2025E, 2026E, and 2027E are 11,168 million yuan, 11,799 million yuan, 13,722 million yuan, 16,166 million yuan, and 18,395 million yuan respectively, with year-on-year growth rates of -8.04%, 5.64%, 16.30%, 17.81%, and 13.79% [1] - The net profit attributable to the parent company for the same years is projected to be 1,645 million yuan, 1,303 million yuan, 1,331 million yuan, 2,219 million yuan, and 2,893 million yuan, with year-on-year growth rates of -34.47%, -20.78%, 2.11%, 66.75%, and 30.37% [1] - The latest diluted EPS (Earnings Per Share) is forecasted to be 0.27 yuan, 0.21 yuan, 0.21 yuan, 0.36 yuan, and 0.47 yuan for the years 2023A to 2027E [1] Market Data - The closing price of the company's stock is 15.77 HKD, with a market capitalization of approximately 89.18 billion HKD [5] - The price-to-book ratio is 3.97 [5] - The company has a total share capital of 6,193.04 million shares [6]

Core Viewpoint - Guojin Securities maintains a "Buy" rating for Smoore International (06969), projecting EPS for 2025-2027 to be 0.22, 0.39, and 0.59 yuan respectively, with corresponding PE ratios of 67, 37, and 25 times at the current stock price [1] Financial Performance Summary - For Q1-Q3 2025, the company achieved revenue of 10.21 billion yuan, a year-on-year increase of 21.8%, with net profit and adjusted net profit (excluding stock incentive expenses) at 809 million and 1.182 billion yuan, reflecting a year-on-year decrease of 23.8% and an increase of 0.1% respectively [1] - In Q3 2025, the company reported revenue of 4.197 billion yuan, a year-on-year increase of 27.2%, with net profit and adjusted net profit at 317 million and 444 million yuan, showing a year-on-year decrease of 16.4% and an increase of 4.0% respectively [1][2] Business Segment Insights - The HNB (Heated Not Burn) business is expected to significantly contribute to revenue, with the launch of the hilo product in Japan and Poland driving sales growth, alongside increasing regulatory scrutiny on illegal products in Europe and the US [1] - The vaping business is anticipated to achieve double-digit growth in Q3 2025, benefiting from market shifts in Europe and increased enforcement against illegal products in the US [1] - The company is focusing on the iteration and expansion of its own brand series, with a steady increase in market share, and expects favorable growth in its APV (Advanced Personal Vaporizer) business [1][2] Profitability Outlook - Adjusted net profit for Q3 2025 increased by 4.0% to 444 million yuan, with an adjusted net profit margin of 10.6%, down from 11.5% in Q3 2024 [2] - Despite a year-on-year decline in profit margin, the overall performance remains strong, with future profit elasticity expected due to the anticipated increase in profitability from HNB products as sales volume grows [2] - The company is also increasing R&D investments in medical nebulization, with recent FDA acceptance of a subsidiary's abbreviated new drug application indicating progress in this area [2] Market Expansion and Growth Potential - The expansion of the legal vaping market in Europe and the US is a prevailing trend, with the HNB product glo hilo starting promotions in Poland, indicating potential for global sales growth [2] - The company is positioned as a unique player deeply integrated into the supply chains of both vaping and HNB products, suggesting a clear path for future growth [2]

Core Viewpoint - Guojin Securities maintains a "Buy" rating for Smoore International (06969), projecting EPS for 2025-2027 to be 0.22, 0.39, and 0.59 yuan respectively, with current stock prices corresponding to PE ratios of 67, 37, and 25 times [1] Financial Performance - For Q1-Q3 2025, the company achieved revenue of 10.21 billion yuan, a year-on-year increase of 21.8%, with net profit and adjusted net profit (excluding stock incentive costs) at 808 million and 1.182 billion yuan, reflecting a year-on-year decrease of 23.8% and an increase of 0.1% respectively [1] - In Q3 2025, the company reported revenue of 4.197 billion yuan, a year-on-year increase of 27.2%, with net profit and adjusted net profit at 317 million and 444 million yuan, showing a year-on-year decrease of 16.4% and an increase of 4.0% respectively [1][2] Business Segments - The HNB (Heat-not-Burn) business is expected to significantly contribute to revenue, with the launch of the hilo product in Japan and Poland driving sales growth [1] - The vaping business is anticipated to achieve double-digit growth in Q3 2025, benefiting from regulatory changes in Europe and increased enforcement against illegal products in the U.S. [1] - The company is focusing on the iteration and expansion of its own brand series, with a steady increase in market share for its OBM (Own Brand Manufacturing) business [1] Profitability Outlook - The adjusted net profit for Q3 2025 increased by 4.0% to 444 million yuan, with an adjusted net profit margin of 10.6%, slightly down from 11.5% in Q3 2024 [2] - Despite a decline in profit margin, the overall performance remains strong, with future profit elasticity expected due to the anticipated increase in HNB business profitability as sales volume grows [2] Market Expansion - The expansion of the legal vaping market in Europe and the U.S. is a significant trend, with the HNB product glo hilo starting promotions in Poland, indicating potential for global sales growth [3] - The company is positioned as a unique player deeply involved in the supply chains of both vaping and HNB products, suggesting a clear path for future growth [3]

Core Viewpoint - The company reported a significant revenue increase in Q3 2025, driven by the HNB and vaping business, despite a decline in net profit due to initial low-margin sales and ongoing investments in R&D [1][2] Financial Performance - For Q1-Q3 2025, the company achieved revenue of 10.21 billion yuan, a year-on-year increase of 21.8%, with net profit of 809 million yuan, down 23.8% [1] - In Q3 2025, revenue reached 4.197 billion yuan, up 27.2% year-on-year, while net profit was 317 million yuan, a decrease of 16.4% [1] Business Analysis - The HNB business is expected to contribute significantly to revenue, with the HNB product "hilo" launched in Japan and Poland, leading to strong sales [1] - The vaping business is projected to see double-digit growth in Q3 2025, benefiting from regulatory changes in Europe and increased enforcement against illegal products in the U.S. [1] - The company is focusing on brand development and market expansion, with a steady increase in market share for its own brands [1] - The adjusted net profit for Q3 2025 showed a year-on-year increase of 4.0% to 444 million yuan, with an adjusted net profit margin of 10.6% [1] Growth Outlook - The expansion of the legal vaping market in Europe and the U.S. is expected to continue, with the HNB product "glo hilo" gaining traction in Poland [2] - The company is positioned uniquely in the market as a supplier in both vaping and HNB categories, indicating a strong growth potential [2] Earnings Forecast and Valuation - The company forecasts EPS of 0.22, 0.39, and 0.59 yuan for 2025-2027, with corresponding PE ratios of 67, 37, and 25 times [2]

Investment Rating - The investment rating for the company is "Outperform the Market" [7] Core Views - The company's revenue for the first half of 2025 reached 6.013 billion HKD, representing a year-on-year increase of 18.3%, while adjusted profit slightly decreased by 2.1% to 737 million HKD [1] - The company is benefiting from the global trend towards regulatory compliance, with its vaping business recovering as expected [1] - The company plans to distribute an interim dividend of 0.20 HKD per share [1] Revenue and Profit Analysis - The company's To B business revenue increased by 19.5% year-on-year to 4.74 billion HKD, with European revenue growing by 38.0% to 2.73 billion HKD [2] - In the U.S., revenue was 1.5% higher at 1.89 billion HKD, while domestic revenue decreased by 6.1% to 120 million HKD [2] - The self-owned brand business revenue grew by 14.1% year-on-year to 1.27 billion HKD, with European revenue increasing by 15.1% [3] Long-term Growth Potential - The successful commercialization of HNB products and steady progress in vaping medical applications are expected to drive long-term growth [3] - The company launched high-end HNB products in Japan, with plans for nationwide expansion and entry into more key markets in the second half of 2025 [3] Financial Forecasts - The profit forecast for 2025-2027 has been adjusted, with expected net profits of 1.239 billion HKD, 1.822 billion HKD, and 2.565 billion HKD respectively, reflecting year-on-year changes of -4.9%, +47.0%, and +40.8% [4] - The diluted EPS is projected to be 0.20, 0.29, and 0.41 HKD for 2025, 2026, and 2027 respectively, with corresponding P/E ratios of 98, 67, and 48 [4]

Group 1: Financial Performance - In the first half of 2025, the company achieved revenue of 6.013 billion yuan, a year-on-year increase of 18.3%, aligning with forecast values and exceeding early-year high single-digit expectations [1] - The net profit was 492 million yuan, a year-on-year decrease of 28.0%, which is the midpoint of the forecast range, attributed to increased management expenses and legal compliance costs [1] - Adjusted net profit was 737 million yuan, a year-on-year decline of 2.1%, also within the forecast range [1] - The company's gross margin for H1 was 37.3%, a decrease of 0.5 percentage points year-on-year, while the adjusted net profit margin was 12.3%, an increase of 2.5 percentage points year-on-year [1] Group 2: Business Segments - The self-owned brand business generated revenue of 1.274 billion yuan in H1, a year-on-year increase of 14.1%, with European revenue growing by 15.1% [1] - The To B business revenue was 4.739 billion yuan, a year-on-year increase of 19.5%, with European revenue rising by 38.0% [2] - The HNB market is experiencing rapid growth, with the company collaborating with British American Tobacco on the HNB product gloHilo, which received positive feedback during trials in Japan [2] Group 3: Market Outlook and Projections - The company is adjusting its profit forecasts due to the impact of incentive amortization and other expenses, projecting net profits of 1.33 billion, 2.22 billion, and 2.89 billion yuan for 2025-2027 [3] - The company maintains a "buy" rating, with projected P/E ratios of 100, 60, and 46 for the respective years [3]

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]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 25.00, up from the previous target of HKD 16.25 [6][4]. Core Insights - The company is expected to see a revenue increase of 18% year-on-year for the first half of 2025, with projected revenue of HKD 60.13 billion. However, net profit is forecasted to decline by 21% to 35% year-on-year, primarily due to increased non-cash share payments and rising operational costs associated with expanding its proprietary brand business [1][4]. - The regulatory environment in the US and Europe is tightening, which is anticipated to drive demand for compliant products, positively impacting the company's core vaporization business [2][4]. - The new HNB product, Glo Hilo, has shown promising performance in the Japanese market, indicating significant growth potential for the company as it expands its product offerings [3][4]. Summary by Sections Revenue and Profit Forecast - The company forecasts a net profit of HKD 13.23 billion, HKD 21.40 billion, and HKD 27.62 billion for the years 2025 to 2027, respectively, with corresponding EPS of HKD 0.21, HKD 0.35, and HKD 0.45 [4][10]. Market and Regulatory Environment - The report highlights that the enforcement of regulations by the FDA in the US and similar measures in Europe are expected to restore sales of compliant vapor products, benefiting the company's market position [2][4]. Product Development and Innovation - The Glo Hilo product, launched in Japan, features enhanced heating efficiency and a variety of flavor options, which are expected to validate the product's market potential and drive future growth [3][4]. Valuation Metrics - The report assigns a PE ratio of 65 for 2026, reflecting the company's strong growth prospects and competitive advantages in the HNB market, leading to a target price increase [4][10].