SMOORE INTL (06969) continued its post-earnings decline, falling over 6% in early trading today. As of press time, the stock was down 5.08% to HK$19.23, with a trading volume of HK$466 million.

On the news front, SMOORE INTL released its interim results, reporting revenue of RMB 6.013 billion for the first half, up 18.3% year-over-year. Adjusted profit for the period reached RMB 737 million, down 2.1% year-over-year, while net profit totaled RMB 492 million, declining 27.96% year-over-year. The company declared an interim dividend of HK$0.20 per share, compared to HK$0.05 in the same period last year.

Bank of America Securities stated that SMOORE's results were broadly in line with expectations, anticipating that full-year revenue growth will improve slightly, but profit margins are expected to remain under pressure.

UBS issued a research report noting that SMOORE INTL's interim net profit decline was largely attributed to increased equity compensation and higher sales and development expenses, as well as rising tax rates. Management remains optimistic about continued revenue growth in the second half, based on favorable e-cigarette policies in the US and Europe. However, the company's short-term profitability continues to be affected by higher R&D spending as it prepares to launch its own products in the US market.

According to management, more concrete financial results from new business segments such as heated tobacco products, inhalation therapy, and beauty atomization products will be reflected in 2027. The bank lowered its earnings forecasts for the company from 2024 to 2027 by 10% to 33%, reflecting higher sales, marketing, and R&D expenses. The target price was reduced from HK$14 to HK$13.11, maintaining a "Sell" rating.