Smoore International (6969) H2 2024 earnings summary

Executive summary

• 2024 marked a turning point with management expressing strong optimism for future growth, especially in HNB and emerging atomization segments.

• Revenue for 2024 reached RMB 11.79 billion, up 5.3% year-on-year, driven by strong growth in self-branded business and stable corporate client revenue.

• Atomization technology remains the core, with expansion into beauty, inhalation therapy, and special purpose atomization.

• The 8531 strategy targets growth across five segments by 2030, aiming for global leadership in atomization.

• Net profit declined 20.7% to RMB 1,303.3 million, mainly due to higher selling and R&D expenses despite increased gross profit.

Financial highlights

• 2024 revenue reached RMB 11.79 billion, up 5.3% year-on-year, with stronger growth in the second half.

• Self-branded business revenue rose 34% to RMB 2.48 billion, now 21% of total revenue.

• Corporate client/ODM revenue was RMB 9.32 billion (79% of total), with a 0.3% decline overall but a 9.7% rebound in the second half.

• Gross margin was 37.4%, down from 38.7% in 2023 due to lower margins in ODM.

• Profit before tax was RMB 1.655 billion, down 14.5%; after-tax profit declined 4.8%.

Outlook and guidance

• Management is cautiously optimistic for 2025, expecting growth in e-cigarettes and strong foundations in emerging segments.

• HNB is expected to see accelerated global rollout, with 2025 as a year of inflection and further growth in 2026–2027.

• Expects continued growth in electronic vaping, heat-not-burn, special purpose atomization, inhalation therapy, and beauty atomization.

• Plans to launch more innovative products, strengthen R&D, and expand global market presence in 2025.

• Regulatory tightening on non-compliant vaping products globally seen as positive for compliant product sales.