Simall International (06969) shares tumbled more than 4% in Hong Kong trading, with the stock down 4.03% to HK$20.25 at press time. Trading volume reached HK$204 million during the session.

The selloff follows the company's interim profit warning announcement. The vaping technology leader projects H1 2025 revenue of RMB6.013 billion, representing 18% year-over-year growth. However, pre-tax profit is expected to range between RMB629 million and RMB769 million, marking a 5% to 23% contraction compared to the same period last year.

More notably, the group anticipates net earnings of approximately RMB443 million to RMB541.4 million for the period - a steep 21% to 35% decline year-on-year. This profit erosion primarily stems from three factors: a RMB176 million increase in non-cash share-based compensation expenses, higher distribution and sales expenditures, and substantially elevated legal service fees.

Excluding the non-cash share-based payments, Simall's adjusted earnings would land between RMB688 million and RMB787 million. This adjusted figure translates to a narrower decline of 9% at the lower end, or potentially a 4% increase at the upper range compared to H1 2024 performance.