Investment Rating - The report maintains a "Buy" rating for Smoore International (6969 HK) [27] Core Views - Smoore International revised its equity incentive plan, granting 61 million shares (1% of total shares) to Chairman Chen Zhiping at HKD 11 26 per share (current price) The unlocking conditions are tied to the company's market capitalization milestones of HKD 300 billion, HKD 400 billion, and HKD 500 billion over six years (2025-2030) [17] - The company has differentiated product solutions in the HNB (Heat-Not-Burn) business, with its partner British American Tobacco launching advanced GLO HILO series products featuring improved heating technology, enhanced user experience, and longer battery life [18] - As the world's largest e-vapor device manufacturer, Smoore is well-positioned to benefit from stricter e-cigarette regulations in the US, with its closed-system products deeply tied to major compliant brands like VUSE (51 2% market share in the US in 2024H1) The company is also rapidly growing its open-system products (self-branded) [19] - Smoore is investing in long-term growth areas including HNB, medical vaporization, self-branded products, and beauty businesses It has completed development and production layout for several drug delivery devices targeting asthma and COPD, along with 10+ drug formulations, which are expected to contribute to revenue and profit growth in the medium to long term [19] Business Performance and Strategy - The equity incentive plan demonstrates management's confidence in the company's long-term growth potential in the fast-evolving and competitive e-vapor industry [17] - Smoore's technological and product advantages, reliable customer base, and strong marketing network are expected to enhance its competitive edge [17] - The company's partnership with British American Tobacco positions it to benefit from the latter's market share gains through its premium GLO HILO products [18] - Smoore's focus on compliance and its status as a leading OEM manufacturer are likely to drive further market share gains amid tightening regulations [19]

Investment Rating - Buy (Maintained) [5] Core Views - The new generation Glo Hilo product shows significant improvements in performance and user experience compared to both the market-leading IQOS iluma i and its previous generation, with expectations of market expansion and volume growth by 2025-2026 [3] - The company has actively responded to regulatory changes in the European market by launching compliant solutions such as TANKER and QUAD SHOT Pro, which are expected to capture elastic demand post-regulatory tightening [7] - The report forecasts revenue growth of 8%, 11%, and 21% for 2024-2026, with net profit attributable to the parent company expected to grow by 36% in both 2025 and 2026 [24] Product Comparison - Glo Hilo Plus is more compact and lightweight (92g) compared to IQOS iluma i (146g), offering better portability and grip [17] - Glo Hilo charges faster, reaching 80% in 40 minutes, while IQOS iluma takes 90-135 minutes for a full charge [17] - The new Glo Hilo features improved heating technology, shorter preheating time, and extended session duration, supporting 5 minutes 10 seconds in standard mode and 3 minutes 40 seconds in boost mode [21] Market and Regulatory Trends - The HNB market is growing steadily, with IQOS maintaining a 71% market share in 2023, while Glo holds 15.6%, indicating significant room for growth [36] - Regulatory changes in Europe and Australia are tightening restrictions on disposable e-cigarettes, while the FDA in the US is increasing enforcement against illegal e-cigarette products [19] Financial Performance - Revenue is projected to reach RMB 120.67 billion, RMB 134.46 billion, and RMB 162.63 billion in 2024-2026, with year-on-year growth of 8%, 11%, and 21% respectively [24] - Net profit attributable to the parent company is expected to be RMB 13.28 billion, RMB 18.13 billion, and RMB 24.62 billion in 2024-2026, with growth rates of -19%, 36%, and 36% respectively [24] - The company's P/E ratio for 2024-2026 is projected at 47.88X, 35.08X, and 25.83X [24] Product Innovation - The company has introduced new solutions like FEELM PRO, which uses ultra-thin high-performance technology for better vaporization performance [22] - Glo Hilo's new heating technology enhances flavor intensity and consistency, addressing consumer preferences [7]

Investment Rating - The report maintains a "Buy" rating for Smoore International with a target price of HKD 13.35, based on a 2025 PE of 48x [1] Core Investment Thesis - Smoore International has experienced a "double whammy" since 2021 due to regulatory headwinds in China and illegal product competition overseas, leading to declining EPS and profitability [1][5] - The company's core advantages remain strong, including leading R&D capabilities, deep customer relationships, and PMTA-approved products in the US [1][6] - Regulatory headwinds in the US and Europe are expected to ease, benefiting Smoore's pod and open-system vape businesses [1][9] - The launch of HNB products by major customers like BAT could create a second growth curve for Smoore [1][13] - Smoore's platform-based advantages in vaporization technology are expected to open new growth opportunities in medical and beauty vaporization [1][14] Market Opportunities US Market - The US illegal vape market accounts for over 70% of the market share, but regulatory crackdowns and potential relaxation of flavor restrictions could drive growth in the legal pod market [1][11] - The mid-term market size for legal pod systems in the US is expected to grow by 63%-299% compared to 2023 levels [1] - FDA has approved menthol-flavored vapes for the first time, signaling a potential easing of flavor restrictions [126] European Market - European countries are gradually implementing bans on disposable vapes, which could benefit Smoore's pod and open-system products [1][12] - The mid-term market size for pod systems in Europe is expected to grow by 42%-60%, while open-system products could grow by 52%-75% compared to 2023 levels [1] HNB Market - The global HNB market reached $34.1 billion in 2023, with a CAGR of 23.1% from 2018-2023 [1][13] - Smoore's major customer BAT is launching a breakthrough HNB product, Glo Hilo, in 2025, which could drive significant growth [1][13][159] Financial Performance - Revenue declined by 11.71% in 2022 and 8.04% in 2023, but is expected to grow by 7.8% in 2024 and 21.21% in 2026 [3] - Net profit attributable to shareholders dropped by 52.52% in 2022 and 34.47% in 2023, but is projected to grow by 43.02% in 2026 [3] - EPS is forecasted to be RMB 0.22, 0.26, and 0.37 for 2024-2026, respectively [1] R&D and Innovation - Smoore has maintained high R&D investment, with R&D expenses reaching RMB 1.483 billion in 2023, a 435% increase from 2019 [92] - The company has accumulated 7,695 patents globally, including 3,867 invention patents [92] - Smoore has developed new technologies like FEELM Turbo and POWER ALPHA 2.0, maintaining its leadership in core vaporization technologies [92] New Business Opportunities Medical Vaporization - Smoore has developed the Air Smooth medical mesh nebulizer system, which reduces drug waste by 60% [166] - The global pulmonary drug delivery device market is expected to grow from $60.1 billion in 2023 to $99.5 billion by 2031 [166] Beauty Vaporization - Smoore has launched its own beauty vaporization brand, MOYAL, targeting the mid-to-high-end market [165] Special Vaporization - Smoore's CCELL ceramic core technology has gained significant market share in the US special vaporization market [164]

Investment Rating - Buy (Maintained Rating) [2] Core Views - The report highlights the positive signals from British American Tobacco's (BAT) capital market communication day, where BAT reiterated its goal to become a smoke-free company by 2035 and shared updates on its new tobacco-related products [2] - The report emphasizes the growth potential in the compliant vaping market, particularly in the US, where regulatory actions against illegal products are expected to drive market expansion [3] - The report also notes the upcoming launch of BAT's new heated tobacco product, Glo Hilo, which is expected to target the high-end market and contribute to the company's growth [3] Market Analysis Vaping Market - The vaping market is expected to see significant growth, with BAT projecting that the number of vaping users will reach 110 million by 2030 [3] - The trend is shifting from disposable vaping products back to rechargeable closed-system products, which are regaining growth momentum [3] - In the US, illegal flavored products account for 70% of the vaping market, but regulatory actions in states like Louisiana have led to a 28% increase in the legal vaping market and a 91% reduction in illegal disposable product channels [3] Heated Tobacco Products (HNB) - BAT sees significant opportunities to improve its market position in the HNB category and plans to launch a breakthrough product, Glo Hilo, by the end of the year [3] - Glo Hilo is positioned as a high-end product and is expected to be further promoted in key markets by 2025 [3] - BAT has submitted a PMTA application for Glo products in the US, aiming to enter the market at an appropriate time [3] Financial Performance and Projections Revenue and Profit - The company's revenue is projected to grow from RMB 11,957 million in 2024E to RMB 16,659 million in 2026E, with a revenue growth rate of 7.06% in 2024E, 14.26% in 2025E, and 21.93% in 2026E [5] - Net profit attributable to the parent company is expected to increase from RMB 1,348 million in 2024E to RMB 2,289 million in 2026E, with a growth rate of 28.60% in 2025E and 32.09% in 2026E [5] Earnings Per Share (EPS) - EPS is projected to be RMB 0.22 in 2024E, RMB 0.28 in 2025E, and RMB 0.37 in 2026E [5] Valuation Metrics - The current stock price corresponds to a P/E ratio of 46x for 2024E, 36x for 2025E, and 27x for 2026E [5] - ROE (Return on Equity) is expected to improve from 5.92% in 2024E to 8.55% in 2026E [5] Industry Trends - The report highlights the tightening regulatory environment in the US, with the FDA and the Department of Justice forming a joint enforcement team to crack down on illegal products [3] - The FDA is also gradually approving more compliant products, such as menthol products, which could further drive market growth [3] - The European market is increasing regulation on disposable vaping products, which is expected to optimize the product structure and improve the company's profit margins [3]

Investment Rating - The report maintains a "Buy" rating for Smoore International (06969) with a target price of 12.54 HKD [1] Core Views - The company reported steady revenue growth in Q3 2024, achieving a revenue of 32.86 billion HKD, a year-on-year increase of 14.1% and a quarter-on-quarter increase of 16.5% [1] - The company's proprietary brand business is experiencing rapid growth, while the closed-system product business is gradually recovering [1] - The decline in net profit is attributed to increased R&D and management expenses, with net profit for Q3 2024 at 3.79 billion HKD, down 22.5% year-on-year but up 10.2% quarter-on-quarter [1] Summary by Relevant Sections Financial Performance - For the first three quarters of 2024, the company achieved a total revenue of 83.23 billion HKD, a 4.0% increase year-on-year, with a net profit of 10.62 billion HKD, down 11.9% year-on-year [1] - In Q3 2024, the revenue was 32.86 billion HKD, with a year-on-year increase of 14.1% and a quarter-on-quarter increase of 16.5% [1] Business Segments - The revenue from proprietary brand business reached 11.16 billion HKD, showing a significant year-on-year growth of 71.9% [1] - The company is expected to continue benefiting from the growth of both proprietary open and closed-system products due to increasing regulatory pressures in the European electronic vaporization market [1] R&D and Future Outlook - The company is increasing its R&D investments, focusing on non-combustible products and medical vaporization products, which are anticipated to become new revenue and profit growth points [1] - The company has completed the development and production of several devices for asthma and COPD medications, with research results gaining industry recognition [1]

Investment Rating - The report maintains a "Buy" rating for the company [2] Core Views - The company's Q1-Q3 revenue reached RMB 8.323 billion, a year-on-year increase of 4.0%, with total comprehensive income of RMB 1.055 billion, a year-on-year decrease of 11.7% [1] - Q3 revenue was RMB 3.286 billion, a year-on-year increase of 14.1% and a quarter-on-quarter increase of 16.5%, while comprehensive income was RMB 330 million, a year-on-year decrease of 28.3% and a quarter-on-quarter decrease of 20.4% [1] - Revenue growth was driven by strong performance in APV and the recovery of refillable products, while profitability was pressured by increased income tax expenses and rising R&D and management costs [1] - The company's self-owned brand Vaporesso saw a 71.9% year-on-year increase in H1 2024, with expectations of continued improvement in Q3 [1] - The refillable market in the US is recovering due to FDA enforcement actions, with core client VUSE's Alto tobacco flavor and Njoy menthol passing PMTA reviews [1] - The disposable e-cigarette market in Europe faced challenges due to stricter regulations, with H1 2024 revenue down 18.9% year-on-year, but a recovery is expected in Q3 [1] - The company is diversifying its product portfolio with investments in HNB, medical atomization, and beauty products, including the launch of the beauty brand Moyal and the first high-viscosity essence atomization beauty device [1] Financial Projections - The report forecasts net profit attributable to the parent company for 2024-2026 to be RMB 1.35 billion, RMB 1.79 billion, and RMB 2.28 billion, respectively, with corresponding P/E ratios of 52.4X, 39.3X, and 30.9X [2] Industry and Market Performance - The company operates in the consumer electronics industry [4] - As of October 10, 2024, the stock price was HKD 12.54, with a total market capitalization of HKD 77.452 billion and a free float of 100% [4] - The 30-day average trading volume was 18.24 million shares [4]

证券研究报告 思摩尔国际 (6969 HK) 港股通 Q3 收入表现亮眼，新业务持续推进 华泰研究 公告点评 2024 年 10 月 09 日│中国香港 消费轻工 Q3 收入同比+14.1%至 32.86 亿元，维持"买入"评级 公司发布前三季度业绩预告，24Q1-3 公司实现营收 83.23 亿元（+4.0%）， 税前利润 13.24 亿元（+0.1%），净利润 10.06 亿元（-11.9%）。分季度看， Q3 单季收入同比+14.1%至 32.86 亿元，税前利润同比-2.6%至 5.13 亿元， 净利润同比-22.5%至 3.79 亿元。我们维持盈利预测，预计公司 24-26 年归 母净利分别为 16.98/20.10/23.93 亿元，对应 EPS 分别为 0.28/0.33/0.39 元， 参考可比公司 24 年 Wind 一致预期 PE 均值 25 倍，考虑到：1）公司持续 加强产品创新与品类扩张，研发及管理优势持续夯实；2）各国监管政策落 地后合规市场价值突出，长期价值属性凸显；3）新业务进展顺利有望打开 新成长曲线，给予公司 24 年 50 倍 PE，目标价 15.42 港币（前值 12.3 ...

Investment Rating - Buy rating maintained for Smoore International (6969 HK) [4] Core Views - Closed-end products expected to show positive trends, with APV continuing strong growth [1][4] - Q3 2024 revenue reached RMB 3 286 million, up 14 1% YoY and 16 5% QoQ [5] - Q3 2024 pre-tax profit was RMB 513 million, down 2 6% YoY but up 24 4% QoQ [5] - Q3 2024 comprehensive income was RMB 330 million, down 28 3% YoY and 20 4% QoQ [5] Financial Performance - Revenue growth driven by strong performance in proprietary brand (APV) and closed-end products [6] - US pod system product revenue grew 6 1% QoQ and 6 5% YoY in Q2 2024 [6] - Europe and other regions pod system product revenue surged 93 2% QoQ and 22 5% YoY in Q2 2024 [6] - APV revenue increased 72% YoY in H1 2024, expected to maintain strong growth in Q3 [6] Profit Analysis - Pre-tax profit growth attributed to revenue and gross profit increase [6] - Net profit declined 22 5% YoY due to higher tax expenses [6] - R&D expenses increased, focusing on HNB and medical vaporization products [6] Market Position and Strategy - Major client VUSE held 51 2% market share in US closed-end and disposable products as of H1 2024 [6] - Company continues to optimize R&D structure, focusing on medical vaporization, HNB, and proprietary brands [6] - Launched MOYAL skincare brand and first-generation vaporization beauty product solution in Q1 2024 [6] - Completed development and production layout for several drug delivery devices for asthma and COPD in H1 2024 [6] Future Outlook - Expected net profit for 2024-2026: RMB 1 34 billion, RMB 1 67 billion, and RMB 1 92 billion respectively [6] - Corresponding PE ratios: 52X, 42X, and 36X [6]

Investment Rating - The investment rating for the company is "Buy" [2][4]. Core Insights - The company's performance is under pressure year-on-year due to cost input strategies, but there is a positive trend on a quarter-on-quarter basis. Future revenue growth from new business segments and an improved market landscape is anticipated [4]. - The company has slightly underperformed expectations, leading to a downward revision of profit forecasts. The projected net profits for 2024-2026 are 1.35 billion, 1.89 billion, and 2.48 billion RMB, respectively, with corresponding PE ratios of 51, 37, and 28 times [4]. - Revenue growth is driven by proprietary brands and closed products, with a year-on-year increase of 14.1% and a quarter-on-quarter increase of 16.5% in Q3 2024. The decline in net profit year-on-year is attributed to tax expenses and increased operational costs [4]. - The market for nebulization products is expected to improve, with recent policy signals indicating a more favorable regulatory environment for flavored electronic cigarettes [4]. - The HNB (Heated Not Burned) business is projected to contribute to revenue growth, supported by increased R&D investment and collaboration with BAT to provide comprehensive product and technology solutions [4]. Financial Summary - The company's revenue for 2024 is estimated at 12.42 billion RMB, with a year-on-year growth of 11%. The projected revenues for 2025 and 2026 are 14.29 billion and 16.43 billion RMB, respectively, both reflecting a 15% growth rate [7]. - The net profit for 2024 is forecasted to be 1.35 billion RMB, with a year-on-year decline of 18%. The net profits for 2025 and 2026 are expected to recover to 1.89 billion and 2.48 billion RMB, showing growth rates of 40% and 31% respectively [7]. - The PE ratio for 2024 is projected at 51.4, decreasing to 36.7 in 2025 and 28.0 in 2026, indicating an improving valuation over time [7].

Investment Rating - Buy (Maintained) [1] Core Views - The company's Q3 revenue showed steady growth, driven by its own-brand business and closed-system product revenue from enterprise clients [3] - The company continues to invest heavily in R&D, particularly in heated tobacco (HNB) and medical vaporization products, positioning itself for future growth [4] - The global HNB market is expected to grow at a CAGR of 15.5% from 2023 to 2028, reaching USD 75.51 billion by 2028 [4] - The company is expected to benefit from increasing overseas demand for new tobacco products and potential market share gains from major clients [4] Financial Performance - Q3 2024 revenue reached RMB 3.286 billion, up 14.1% YoY, while net profit declined by 22.5% YoY to RMB 379 million [3] - For the first three quarters of 2024, the company achieved revenue of RMB 8.323 billion, up 4.0% YoY, and net profit of RMB 1.062 billion, down 11.9% YoY [3] - The company's own-brand revenue grew by 71.9% YoY in the first half of 2024, reaching RMB 1.116 billion, with continued strong growth expected in Q3 [3] - R&D expenses increased by 23.7% YoY in the first half of 2024, reaching RMB 760 million [4] Future Projections - The company is expected to achieve net profits of RMB 1.7 billion, RMB 2.05 billion, and RMB 2.48 billion for 2024, 2025, and 2026, respectively [4] - Revenue is projected to grow at a CAGR of 19.87% and 16.65% in 2025 and 2026, respectively [5] - Net profit growth is expected to accelerate to 20.45% and 20.98% in 2025 and 2026, respectively [5] - The company's PE ratio is forecasted to be 43x, 35x, and 29x for 2024, 2025, and 2026, respectively [4] Business Strategy - The company is focusing on digital marketing and rapid response to consumer demand for its own-brand products [3] - It is expanding its international market presence and localizing operations to enhance its competitive edge [3] - The company's HNB product portfolio is gaining recognition, and potential orders from major clients like British American Tobacco could drive future growth [4] Financial Ratios - The company's gross margin is expected to improve from 38.81% in 2023 to 40.88% by 2026 [7] - ROE is projected to increase from 7.68% in 2023 to 9.05% by 2026 [7] - The company's net debt ratio is expected to remain negative, indicating a strong financial position [7]