The company has diversified into multiple areas, including electronic atomization, non-combustion heating, special-purpose atomization, and medical atomization. The company achieved a net income of 0.31 billion yuan in Q1 2024, a year-on-year growth of 5.6%, and returned to positive growth.
According to the Futu Securities research report, Smoore International (06969) is still recommended as 'buy'. The company has diversified into multiple areas, including electronic atomization, non-combustion heating, special-purpose atomization, and medical atomization. The company achieved a net income of 0.31 billion yuan in Q1 2024, a year-on-year growth of 5.6%, and returned to positive growth. The company has increased investment in R&D and is expected to launch differentiated products in multiple areas, cultivate new growth points, and benefit from the stricter regulation of non-compliant products for leading brands. The company is expected to fully benefit from the growth of overseas demand for new tobacco products and the increase in market share of major customers.
Caitong Securities' view is as follows:
Vuse tobacco flavor products have been approved again, after mint alcohol was previously given administrative deferral.
The products authorized by the FDA are all tobacco-flavored products under the Vuse Alto brand, and they are another tobacco-flavored electronic cigarette product under PMTA review after Vuse Solo, Vuse Vibe, and Vuse Ciro. The FDA believes that there is sufficient evidence that the authorized tobacco-flavored e-cigarettes are less harmful, and the benefits of completely shifting from traditional cigarettes to less harmful products may outweigh the risks to adolescents. Previously, the FDA issued a marketing rejection order for the VuseAlto menthol flavor product, but the administrative stay has been approved and it can still be sold in the United States.
With the approval of multiple products, cooperation between Smoore and British American Tobacco is expected to accelerate.
As of July 2024, BAT has had multiple atomization products approved by PMTA. With the acceleration of overseas regulatory approval, the regulation of non-compliant products has become stricter, and the market share of leading brands is expected to continue to increase. Smoore International, a core OEM company, is expected to fully benefit from this trend. The company has established a stable cooperation relationship with overseas tobacco giants such as British American Tobacco. In terms of non-combustion heating, BAT launched the Glo Hyper Pro series in early 2024, with upgrades in taste and display performance, and continued to make efforts in non-combustion heating business. According to the Smoore International announcement, the company has a significant and competitive product portfolio, and innovative products have been recognized by customers. If the company successfully undertakes large customer orders from British American Tobacco in the future, it is expected to contribute to performance growth.