Summary of the Conference Call on Smoore International Industry Overview - The global tobacco market is substantial, nearing $900 billion, but the traditional cigarette market is experiencing a slight decline with a compound annual growth rate (CAGR) of -0.2% over the past decade, excluding the Chinese market [2][3] - New tobacco products, including electronic vapor products, heated not burned (HNB) products, and oral nicotine pouches, are driving overall market growth [2] Key Points on New Tobacco Products - New tobacco products are categorized into three main types: electronic vapor products, HNB, and oral nicotine pouches [5] - Electronic vapor products saw rapid growth but have faced a downturn since 2021 due to tightening regulations [5] - HNB products, pioneered by Philip Morris in 2014, have experienced a slowdown in growth to mid-low double digits due to regulatory pressures in Europe [5] - Oral nicotine pouches have low penetration but are growing rapidly, maintaining high double-digit growth rates [5] Smoore International's Position and Strategy - Smoore International has a long history in the electronic vapor product sector and is currently focusing on the HNB segment [2][6] - Despite European regulatory impacts, HNB products are expected to maintain a growth rate of 10% to 15%, with potential boosts from market openings in the U.S. and China [6][7] - The Glo Halo product, developed in collaboration with major clients, is positioned to enhance market share due to its competitive advantages [2][6] Market Share Insights - The global HNB market is dominated by Philip Morris's IQOS, holding over 70% market share, while Smoore and its clients account for approximately 15% [2][6] - As new products are launched and iterated, the market share gap is expected to narrow [2][6] Financial Performance and Future Outlook - In the first half of 2025, Smoore's ODM business performed well, particularly in light of the European ban on disposable e-cigarettes [4][7] - HNB products are set to launch nationwide in Japan, a key market accounting for one-third of global HNB sales, following positive trial feedback [7] - The projected price-to-earnings (PE) ratios for 2025 to 2027 are 95x, 60x, and 42x respectively, indicating high valuation but justified by industry prospects and Smoore's R&D capabilities [4][7] Competitive Landscape and Future Trends - Currently, the three forms of new tobacco products do not compete directly, as they cater to different harm reduction needs [8] - Each product type offers unique value propositions, ensuring their coexistence and collective contribution to market growth [8]