On March 18th, Smoore (06969.HK) released its full-year performance for 2023, with total annual revenue reaching 11.17 billion Chinese Yuan (around 1.6 billion USD). Smoore has continued to strengthen its localized layout in overseas markets, with its self-owned brands showing sustained growth and healthy increases in overseas revenue. At the same time, the company has been working on improving management efficiency and cost-effectiveness. In the future, it plans to transform into a globalized enterprise, laying the foundation for future growth.
Smoore International's Chairman of the Board, Chen Zhiping, stated, "In the past year, our operations in different regions have shown significant differences due to the impact of market regulations and external environments. Thanks to our continuous efforts to expand our global presence and enhance local operational management capabilities, our overseas market revenues have continued to grow steadily throughout the year. We believe that the ongoing updates to electronic vapor product regulations worldwide and the further strengthening of enforcement will benefit the industry's long-term sustainable development, and we are confident in the bright future of the vaping business."
Overseas Market Experiencing Stable Growth, Revenue Accounting for over 90%
Smoore, an e-cigarette company, actively expands its presence in overseas markets, with steady growth in overseas revenues reaching 11.01 billion RMB, a 11.2% increase from 2022. The market share of disposable products has significantly increased in multiple countries, and the US market has helped strategic clients maintain the top market share in the closed-system pod category. The company's own brand is leading in key global markets.
In Europe and other markets, Smoore launched an upgraded ceramic atomization core disposable technology platform, FEELM Max, in 2023. This platform allows for more puffs under compliant liquid volume regulations. The technology platform has successfully entered the supply chain of major customers, achieving large-scale shipments and receiving wide praise from customers and users. The group's disposable products achieved revenue of 3.37 billion yuan, a significant increase of 74.5% compared to 2022, with the revenue accounting for 30.2% of total revenue, up from 15.9% in the same period last year.
Targeting the U.S. market, the group has successfully helped strategic clients maintain their leading market share in the category of closed pod-system products in the U.S. market by improving production intelligence level, optimizing cost structure, and other measures, and further increasing market share.
The self-owned brand VAPORESSO upholds the brand genes of "innovation, high quality", achieving revenue of 1.85 billion RMB, a 26.0% increase compared to the same period last year. VAPORESSO is currently in a leading position in the global leading market, continuously increasing market share in the open category market. In terms of marketing, they have completed the digitization management of their marketing channels, increased efforts in expanding overseas markets, established local teams in major markets, continuously enhanced consumer insights, ensured meeting the diverse needs of consumers, and quickly pushed towards retail terminals. VAPORESSO COSS products have won the prestigious Golden Leaf Award in the global atomization field, becoming the first open brand in the industry to receive the Golden Leaf Award.
Strengthen R&D Management System, while Improving Operational Efficiency
In terms of research and development, the group has increased its R&D investment. R&D expenses for the year amount to 14.8 billion yuan, accounting for approximately 13.3% of revenue, continuing to enhance the group's technological leadership in the atomization field. In the field of electronic atomization, the FEELM Max technology platform has been launched. In the HNB field, the group has successfully introduced a variety of competitive heating technology product platforms, significantly improving the user experience and taste.
In terms of marketing, the group continuously enhances its user insights and channel control capabilities, establishes localized marketing teams and store management systems, and innovates customer cooperation models to provide customers with value-added services such as market insights and promotion. The group operates multiple overseas warehouses in Europe and America, and has established several overseas sales and research and development centers. The global layout is beneficial for the group to be close to consumers, understand market trends, and also helps to be closer to customers, save costs, and improve delivery speed.
Continuing to streamline operations and increase efficiency in internal management. By implementing the Amoeba management model, strengthening budget management systems, and leveraging the advantages of group information systems, operational efficiency has continued to improve, resulting in a significant decrease in management expenses during the review period.
Provide Cutting-edge Atomization Solutions with Focus on User Experience
In the field of electronic atomization, in response to the rapid rise of disposable products worldwide, the group will continue to rely on leading technology, precise user insights, and sinking sales channels to launch innovative products with differentiation and quickly capture the disposable market. Regarding pod-system products, the group will continue to support customers' product iteration needs and help customers continue to increase market share. As for open system products, the group will continue to enhance user insights and channel control capabilities, timely introduce more innovative products, and achieve sustained and stable growth in this category.
In the field of HNB products, the group has already established a leading technology reserve with differentiation, and will continuously seek to collaborate with other industry leaders in the future to jointly develop new products and expand market coverage. In 2024, further product refinements will be made to lay a solid foundation for commercialization.
Mr. Chen Zhiping concluded that in the future, the group will focus on the field of atomization, continue to increase product development, while continuously improving operational efficiency and marketing capabilities. The goal is to create greater value for customers and consumers with leading technology and innovative products, and provide shareholders with sustained returns through healthy business performance.
Source: International Smoore
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