Smoore International (6969.HK) reported first-quarter revenue of ¥3.86 billion, a 41.7 percent increase year-over-year, driven by strong growth in its heat-not-burn and ODM businesses.
CICC maintained its “Outperform” rating and HK$14 price target on the stock, implying 49 percent upside from the current price. The bank said the results were in line with its expectations.
The company’s net profit rose 36.6 percent to ¥263 million. After adjusting for share-based payments and losses from its emerging medical division, net profit increased 25.7 percent to ¥467 million.
The strong performance highlights Smoore's growing traction in the heat-not-burn (HNB) market, a key growth driver. Investors will watch for continued market share gains for Glo Hilo in Japan following a recent tax increase on competing products.
Breaking down the results, the company’s ODM business for atomizing e-cigarettes grew 21.8 percent to ¥2.52 billion. CICC noted that a tax rebate window for e-cigarette exports prompted some smaller clients to increase overseas shipments. Revenue from Heat-Not-Burn (HNB) products reached ¥660 million as British American Tobacco's Glo Hilo device, which uses Smoore's technology, expanded in Japan, Poland, and Italy.
The company's own open-system brand, Vaporesso, saw revenue increase 14.3 percent to ¥580 million, driven by expansion in Europe and the United States. The medical atomization segment recorded a slight 1.7 percent decline in revenue to ¥80 million and continues to be in a development phase.
The results show Smoore's core business remains strong while it invests in new areas like medical atomization. The company's ability to capitalize on the HNB trend, particularly in markets like Japan and Europe, will be a key catalyst for achieving its 49% upside target.
This article is for informational purposes only and does not constitute investment advice.
