Summary of Key Points from the Conference Call Company and Industry Overview - **Company**: Smoore International - **Industry**: Heated Tobacco Products (HNB) and E-cigarettes Core Insights and Arguments - Smoore International's vaping business is expected to rebound by the end of 2024, contributing approximately 40 billion RMB in market value due to regulatory adjustments in the TA framework and market normalization in Europe and the US [1][2] - The new HNB product, Glow Halo, developed by Smoore, has rapidly gained market share in Japan and achieved significant results in Poland and Italy, validating its market potential [1][4] - The overall growth rate of the HNB industry is steadily increasing, with major tobacco companies actively launching new products, anticipating accelerated penetration rates by 2030 [1][5] - Despite short-term underperformance of Glow Halo in Japan, its long-term viability is recognized, with expectations of achieving a profit target of 10 billion RMB, further boosting the company's market value [1][5] Financial Projections and Market Performance - Smoore's HNB business is projected to ship 20-30 billion units over the next two to three years, generating profits of 1-1.5 billion USD, corresponding to a market value of 25 billion RMB [1][7][15] - The vaping business is expected to contribute 40 billion RMB in market value, with a 20x valuation multiple, while the HNB segment could add another 25 billion RMB [7][17] - The company anticipates a significant increase in revenue from its vaping business, driven by regulatory changes in Europe and a return of compliant products in the US market, projecting a double-digit growth rate [16] Market Dynamics and Competitive Landscape - BAT's Glow Halo has a market share of 1.3% in Japan, which is lower than expected, but the transition of consumers to HNB products is acknowledged to take time [8][10] - In Europe, particularly in Poland and Italy, Glow Halo is performing better than in Japan, aided by aggressive promotional activities [11] - BAT plans to cover at least 20 core countries by the end of 2026, with expectations of terminal sales exceeding 10 billion units, half of which will come from Japan [12][13] Future Catalysts and Risks - Upcoming reports from BAT in February 2026 and Smoore's performance updates in March 2026 are potential catalysts for stock price movements [18] - The company is expected to increase R&D investments in the HNB sector, with a projected profit increase of approximately 200 million RMB in 2026 [14] - The overall market sentiment is currently at a low point, but the fundamentals support a valuation of around 65 billion RMB, with potential upside from collaborations with other tobacco companies [17] Additional Important Insights - Smoore's entry into the medical aerosol sector is expected to gradually reflect its value by 2026-2027, although it has not yet contributed significantly to profits [1][7] - The dual-brand strategy of BAT in Japan, with both Hyper and Halo targeting different market segments, is designed to enhance brand image and cater to varying consumer preferences [7][10]

Summary of Conference Call on E-Cigarette Market Update and Analysis Industry Overview - The heated tobacco (HNB) market in Japan is experiencing intensified competition among major brands including IQOS, Glow, and Japan Tobacco's Plum, leading to concerns about the sales performance of Smoore and British American Tobacco's Glow Halo products, which have not met expectations. The current stock price of Smoore is nearing its bottom range [1][2]. Key Points on Smoore's Performance - Smoore's traditional vaping business is showing robust growth, particularly in the European market, which is expected to grow by 20% to 30% due to the contribution from newly added local brand businesses. The U.S. market is also seeing a recovery in compliant products, as indicated by leading companies' financial reports showing signs of market rebound [1][3]. - The company's projected operating net profit for 2025 is approximately 1.3 billion RMB, with traditional vaping business profits expected to range between 1.5 billion to 2 billion RMB, excluding medical beauty vaporization R&D expenses and one-time reserves [4][6]. Insights on Glow Halo Product Launch - The Glow Halo product was launched nationwide in Japan in September 2025 and is also entering markets in Italy and Poland. While the launch progress is in line with expectations, the promotional effectiveness has been slightly below expectations due to aggressive discounting strategies by Japan Tobacco, which has attracted new HNB users, including some from IQOS and Glow [1][5]. - Glow Halo is positioned as a mid-to-high-end product, avoiding reliance on discounts and instead using a strategy of offering free pods with device purchases to cultivate user habits. Long-term prospects for Glow Halo remain positive due to its advantages in heating time, smart design, and user experience, with expected sales in Japan reaching around 2 million units and pod sales in the tens of billions by 2025 [1][5]. Market Dynamics and Future Outlook - The competitive landscape in Japan's HNB market is intensifying, with Philip Morris International (PMI) showing a 16% growth in HNB products and Japan Tobacco achieving a 40% growth rate. This competitive pressure is impacting the short-term penetration rate of Glow Halo [5]. - Future catalysts for Smoore's performance include financial reports from British American Tobacco, consumer data from investor conferences, progress in new market launches, and FDA approval developments, all of which could drive growth in Smoore's performance [3][6].