What Smoore International Investors Missed Before The Fall
Smoore International investors lost 43.5% over a year, revealing overlooked risks in regulation, client concentration, and margin resilience.Summary
Over the past year, Smoore International investors suffered a 43.5% total loss including dividends, as the stock fell from HK$15.39 to HK$8.43. The article revisits two competing narratives: a bullish case with a fair value of HK$17.03, based on heavier R&D in HNB (heat-not-burn), beauty atomization, and inhalation therapy; and a bearish case with a fair value of HK$9.21, focused on tightening US and European vaping regulations and heavy reliance on clients like British American Tobacco. The H1 2026 report showed revenue rising from CNY6,013.29m to CNY7,208.88m and net income from CNY492.154m to CNY571.916m, supporting parts of the bullish story. However, net margin slipped from 8.2% to 7.9%, and a planned stake cut by EVE Energy kept caution alive. The key lesson is to avoid pinning R&D or margin narratives to a single figure, and instead track net margin and share count alongside revenue. At today’s price, the narrative’s fair value sits above the market, implying investors must believe in the potential of branded platforms like VAPORESSO, marketing assets, and retail data to reshape margins and revenue growth.
(Source：Simply Wall Street)
