SDIC Securities released a research report reiterating a "Buy" investment rating on SMOORE INTL (06969). As a global leader in electronic atomization, SMOORE INTL persists in ramping up R&D and leading with technology. With major global countries strengthening regulations on non-compliant products and the continuous expansion of new business, coupled with recent consecutive large-scale share repurchases that highlight long-term confidence, the company's future development potential is clear and promising. The brokerage forecasts SMOORE INTL's revenue for 2025-2027 to be RMB 14.108 billion, RMB 16.717 billion, and RMB 19.867 billion, representing year-on-year growth of 19.57%, 18.50%, and 18.84%, respectively; it assigns a 48x P/E ratio for 2026, corresponding to a target price of HKD 16.80. The main views of SDIC Securities are as follows: A nearly HKD 200 million expenditure over two days through consecutive large-scale repurchases underscores long-term confidence. According to company announcements, the company executed two repurchases on December 11 and December 12. On the 11th, it repurchased 8.14 million shares at an average price of HKD 12.26 per share, spending HKD 99.77 million. On the 12th, it repurchased 7.99 million shares at an average price of HKD 12.48 per share, spending HKD 99.76 million. The proportion of shares held by the trustee increased from 1.2853% before the purchases to 1.5457% of the company's total share capital. These substantial buybacks demonstrate management's strong long-term confidence in the company's value and future business growth. Q3 2025 revenue hit a record high, with HNB products continuing to gain volume and receiving positive feedback. The company's revenue for the third quarter of 2025 was approximately RMB 4.197 billion, a notable year-on-year increase of 27.2%, primarily benefiting from the successful launch of new Heat-Not-Burn (HNB) products by strategic clients in major global markets. Concurrently, tightening global regulations are accelerating the phase-out of non-compliant products, allowing the company, as a compliant leader, to fully benefit from policy tailwinds, with its electronic atomization business showing steady growth. Flagship new products are driving an increase in market share for its own-brand business. Adjusted net profit for Q3 was approximately RMB 444 million, up 4.0% year-on-year. The growth rate of period expenses, excluding share-based payments, was lower than the revenue growth rate, indicating excellent expense control. Risk warnings include the potential for industry regulations to become stricter than expected; the risk of atomization technology pathways being disrupted; risks associated with new business development falling short of expectations; risks related to major shareholder减持 (share reductions); risks of contract manufacturing products failing regulatory approval; and risks of customer order growth falling short of expectations.
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