SMOORE: Revenue Down in China and Up in the U.S.

On July 18th, Hong Kong Stock Exchange-listed SMOORE International has issued an earnings notice, estimating that the company's total income for the first half of the year will be approximately RMB717 million to RMB793 million, representing a decrease of 42.7% to 48.2% as compared to the same period last year, and adjusted net profit will be RMB741 million to RMB817 million, representing a decrease of 43.1% to 48.4% as compared to the same period last year.

Revenue in mainland China declined, while improvement in overseas markets.

In this release, unaudited overall revenue declined by 9.4% year-over-year to RMB 5.123 billion.

Revenue from the mainland China market amounted to approximately RMB 62.1 million, representing a year-on-year decrease of  96.3%, and accounting for 1.2% of the total revenue compared to 30.0% in the same period last year.

Revenue from overseas markets amounted to approximately RMB 5.061 billion, representing a year-on-year increase of 28.0%. Among them, revenue from the U.S. market amounted to approximately RMB 2.215 billion, representing a year-on-year increase of  26.9%.

In the announcement, SMOORE said that with the strengthening of regulation and enforcement of non-compliant products, compliant products are expected to enjoy greater sustainable growth in the U.S. market.

Overseas markets were not sufficient to offset the impact of lower revenues in the mainland China market

Revenue from Europe and other markets amounted to approximately RMB 2.846 billion, representing a year-on-year increase of 28.8%. According to SMOORE, the company's launch of disposable products with better experience under the compliance framework in this market was well received by customers and users, resulting in the sustained growth of revenue from this market. Although they recorded year-on-year growth in revenue from overseas markets during the period, it was not sufficient to offset the impact of lower revenue from the mainland China market.

The year-on-year decrease in gross profit margin was mainly due to a significant year-on-year decrease in the proportion of revenue from the mainland China market, which had relatively higher gross profit margins. It was also affected by an increase in the proportion of revenue from disposable products, which have relatively lower gross profit margins.

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【1】思摩尔盈利警告