China International Capital Corporation (CICC) has maintained its earnings forecasts for SMOORE INTL (06969) for 2026 and 2027. The current share price implies a P/E ratio of 45 times for 2026 and 20 times for 2027. CICC reaffirms its Outperform industry rating and a target price of HK$14, which corresponds to a P/E ratio of 67 times for 2026 and 30 times for 2027, indicating a potential upside of 49%.
The company reported its first-quarter 2026 results, with revenue reaching RMB 3.856 billion, a year-on-year increase of 41.7%. Net profit attributable to shareholders grew by 36.6% year-on-year to RMB 263 million. After adjusting for share-based incentive expenses, net profit attributable to shareholders rose by 10.7% year-on-year to RMB 347 million. Excluding losses from the healthcare business, adjusted net profit increased by 25.7% year-on-year to RMB 467 million, meeting the bank's expectations.
CICC's key observations are as follows:
In the first quarter, revenue from heated tobacco products (HNB) amounted to RMB 660 million, driven by the scaled promotion of Glo and Hilo in markets such as Japan, Poland, and Italy. Revenue from vaporization e-cigarette ODM grew by 21.8% year-on-year to RMB 2.52 billion. This was partly due to small and medium-sized clients accelerating export shipments ahead of the export tax rebate window for e-cigarettes. However, international tobacco clients continued to be supplied by overseas production facilities, and the bank expects stable shipment patterns.
Revenue from advanced personal vaporizers (APV) increased by 14.3% year-on-year to RMB 580 million, as the company expanded its self-branded open-system products in European and U.S. markets. Revenue from the vaporization medical business declined slightly by 1.7% year-on-year to RMB 80 million.
Excluding share-based incentive expenses and early-stage losses from the medical business, adjusted net profit attributable to shareholders for the first quarter of 2026 was RMB 467 million, representing a 25.7% year-on-year increase, aligning with the rapid revenue growth trend. The bank believes that with the expansion of HNB, stable orders from international tobacco ODM clients, and improved cost control efficiency, the company's adjusted profit in 2026 is expected to grow rapidly in line with revenue. The medical business remains in its early development phase, with progress in R&D pipelines and capital operations likely to drive operational improvements.
CICC is optimistic about the diversified development of the HNB technology platform and the accelerated growth of the vaporization medical business. The bank expects the mature vaporization e-cigarette business to achieve steady growth in 2026, driven mainly by emerging brand clients. For the emerging HNB business, Japan's increase in HNB tobacco tax rates effective April 1 has led to industry-wide price hikes. Against this backdrop, Glo and Hilo have maintained stable pricing, which is expected to boost sales and market share in Japan in the short term. In the medium to long term, the company's HNB technology platform capabilities are strengthening, with new clients and products expected to be launched at a positive pace.
In the vaporization medical segment, the U.S. team is accelerating the development of a drug-device combination platform, with FDA application submissions underway. This business is anticipated to become a new growth driver for the company.
Risks include regulatory changes, customer concentration, technological challenges, and foreign exchange volatility.