Smoore International (6969) H1 2024 earnings summary

Executive summary

• Achieved solid performance in H1 2024, focusing on atomization technology and expanding applications in inhalation therapy and beauty atomization.

• Revenue for the six months ended 30 June 2024 was RMB5,037.2 million, down 1.7% year-over-year, with gross profit margin rising to 38.0% from 36.2%.

• Net profit was RMB683.2 million, a 4.8% decrease compared to the same period last year, while profit before tax increased 1.9% to RMB811.6 million.

• Self-branded business sales surged 71.9% year-over-year, now accounting for 22.1% of total revenue, while corporate client sales declined 12.3%.

• Administrative expenses fell 27.2% due to cost efficiency measures, offsetting higher R&D and selling expenses.

Financial highlights

• Revenue: RMB5,037.2 million, down 1.7% year-over-year.

• Gross profit: RMB1,914.6 million, up 3.2% year-over-year; gross margin increased to 38.0% from 36.2%.

• Profit before tax: RMB811.6 million, up 1.9% year-over-year.

• Net profit: RMB683.2 million, down 4.8% year-over-year; net margin at 13.6%.

• Cash and cash equivalents: RMB6,534.9 million, up 22.6% from year-end 2023.

Outlook and guidance

• Expects regulatory tightening to support compliant product sales recovery and long-term growth in atomization, electronic vaping, heat-not-burn, inhalation therapy, and beauty atomization markets.

• Plans to continue investing in R&D for heat-not-burn and inhalation therapy products and launch more innovative products.

• Aims to deepen compliance, accelerate product iteration, and expand customized services for clients.

• Inhalation therapy and beauty atomization businesses are expected to gradually contribute more revenue.