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]

Core Viewpoint - Ispire Technology Inc. has submitted a historic pre-market tobacco product application (PMTA) for its Bluetooth Low Energy (BLE) chip system, marking the first complete PMTA application for an independent, interoperable, blockchain-supported age verification component in the industry [1][2]. Group 1: Company Developments - The company will benefit from the commercial sales of the BLE chip system and has the right to integrate this technology into its own devices, reinforcing its leadership in compliance innovation and unlocking new revenue growth opportunities [1][2]. - The IKE BLE chip is designed to provide a secure, interoperable, terminal-based identity and age verification system aimed at preventing unauthorized use of vaping devices [2][3]. - The PMTA application includes plans for publishing a clinical research protocol for peer review, demonstrating the company's commitment to transparency and scientific rigor [3]. Group 2: Industry Impact - The IKE platform offers continuous, real-time verification at the device usage end, providing unprecedented safety measures to prevent underage usage, contrasting with traditional one-time age verification methods [1][2]. - The technology has shown 100% effectiveness in preventing underage users from activating devices and has a user error rate of less than 1%, indicating high usability for adult users [2]. - The application aims to establish new standards for youth protection and device safety, potentially creating a regulatory pathway for expanding flavor product regulations while providing more alternatives for adult users [3].