Smoore International (6969) H2 2024 earnings summary

Executive summary

• 2024 revenue increased by 5.3% to RMB11.80 billion, driven by strong growth in self-branded business and stable ODM/corporate client revenue.

• Net profit declined by 20.7% to RMB1,303.3 million, mainly due to higher selling and R&D expenses despite increased gross profit.

• Self-branded business revenue surged 34.0% year-over-year, now accounting for 21.0% of total revenue.

• ODM/corporate client business contributed 79.0% of total revenue, with a slight 0.3% decline year-over-year.

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

Financial highlights

• Gross profit margin decreased to 37.4% from 38.7% last year, reflecting changes in product mix.

• Profit before tax was RMB1,655 million, down 14.5%; comprehensive income was RMB1,416.9 million.

• Earnings per share dropped 20.7% to RMB0.2142; dividend payout ratio increased to 40.2%.

• Selling expenses surged 74.7% to RMB919.6 million, mainly due to global marketing and beauty atomization launches.

• R&D expenses rose to RMB1,572.3 million, 13.3% of revenue, with increased focus on HNB and inhalation therapy.

Outlook and guidance

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

• Regulatory tightening in Europe and the US is expected to shift demand toward compliant pod-based and open-system products.

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

• Beauty atomization and inhalation therapy are positioned for improved performance and market expansion.

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