Smoore International (6969) H1 2025 earnings summary

Executive summary

• Revenue increased 18.3% year-over-year to RMB6,013 million in 2025 H1, driven by recovery in vaping, expansion in HNB, and regulatory shifts favoring compliant products.

• Net profit declined 28.0% year-over-year to RMB492 million, mainly due to higher share-based payment, legal/compliance, and market development expenses.

• Adjusted net profit (excluding share-based payments) was RMB737 million, down 2.1% year-over-year.

• Strategic support for a key customer's HNB product launch in Japan marked a milestone, with strong early market feedback.

• Continued investment in emerging businesses such as inhalation therapy and beauty atomization.

Financial highlights

• Gross profit grew 16.6% year-over-year to RMB2,244 million, but gross margin slightly decreased by 0.5 percentage points to 37.3%.

• Distribution and selling expenses increased 31.2% year-over-year, mainly due to expanded marketing for self-branded products.

• Administrative expenses rose 79.7% year-over-year, driven by share-based payments and legal/compliance costs.

• R&D expenses decreased 4.9% year-over-year, now 12.0% of revenue, with a focus shift to HNB and inhalation therapy.

• Cash and cash equivalents stood at RMB5,212 million; current ratio was 336.7%; asset-liability ratio improved to 17.9%.

Outlook and guidance

• Recovery trend supported by regulatory enforcement, launch of compliant products, and strategic customer launches in key markets.

• Nationwide HNB product launch in Japan planned for September 2025, with further expansion into key markets.

• Continued investment in compliant, innovative products and further development of inhalation therapy and beauty atomization businesses.

• Focus on R&D, operational efficiency, and sustainable development to drive long-term growth.