August 2026: Heated Tobacco Hyper-Growth and European ODM Expansion Power Record Smoore H1 2026 Revenue
Smoore delivered strong operational performance during H1 2026, setting a record-high interim revenue of RMB 7,209 million, representing a year-on-year (YoY) increase of 19.9%. Growth was predominantly driven by the Corporate Client-Oriented (ToB) segment (+24.7% YoY), powered by the hyper-expansion of its Heat-Not-Burn (HNB) technology platform (+322.1% YoY) and robust ODM vaping demand across Europe and Rest of World (RoW) markets (+29.7% YoY).
Cost of revenue grew 29.6% YoY to RMB 4,887 million, resulting in a gross profit of RMB 2,322 million (+3.5% YoY) and a gross profit margin of 32.2%. While gross margin contracted 5.1 percentage points YoY due to product mix shifts toward high-volume hardware platforms, it expanded 0.5 percentage points sequentially against H2 2025 (31.7%).
Operating expenses comprised distribution and selling expenses of RMB 388 million (-21.0% YoY), administrative expenses of RMB 620 million (+1.8% YoY), and research and development expenses of RMB 845 million (+16.9% YoY). Profit before tax reached RMB 873 million (+24.9% YoY), and reported profit for the period totaled RMB 572 million (+16.2% YoY). Adjusted net profit, after adding back RMB 185 million in share-based payment expenses, stood at RMB 757 million (+2.6% YoY). Excluding net losses of RMB 132 million from the medical inhalation therapy segment, core vaping and heat-not-burn adjusted net profit grew 7.1% YoY to RMB 889 million.
Key Financial Highlights
| Metric (RMB Million) | H1 2026 | H1 2025 | Change (%) | % of Revenue* |
| Revenue | 7,209 | 6,013 | +19.9% | 100.0% |
| Cost of Revenue | (4,887) | (3,769) | +29.6% | 67.8% |
| Gross Profit | 2,322 | 2,244 | +3.5% | 32.2% |
| Gross Margin (%) | 32.2% | 37.3% | -5.1pp | — |
| Distribution & Selling Expenses | (388) | (491) | -21.0% | 5.4% |
| Administrative Expenses | (620) | (610) | +1.8% | 8.6% |
| Research & Development (R&D) | (845) | (723) | +16.9% | 11.7% |
| Profit Before Tax | 873 | 699 | +24.9% | 12.1% |
| Reported Net Profit | 572 | 492 | +16.2% | 7.9% |
| Share-Based Payment Add-back | 185 | 245 | -24.7% | 2.6% |
| Adjusted Net Profit | 757 | 737 | +2.6% | 10.5% |
| Inhalation Therapy Loss Add-back | (132) | (92) | +43.3% | -1.8% |
| Core Adjusted Net Profit (ex. Med Tech) | 889 | 830 | +7.1% | 12.3% |
Corporate Client-Oriented Business (ToB Segment)
Total ToB revenue increased 24.7% YoY to RMB 5,910 million, accounting for 82.0% of total group revenue (up from 78.8% in H1 2025). Heat-Not-Burn (HNB) products revenue surged 322.1% YoY to RMB 962 million (13.4% of total revenue vs. 3.8% in H1 2025). Growth was fueled by commercial-scale shipments to a top global tobacco client (British American Tobacco) that initiated in H2 2025. The product line expanded across 9 international markets (primarily Japan and Europe) with market share gains in the premium HNB segment.
Electronic Vaping & Special Purpose Atomization business generated RMB 4,801 million (+9.3% YoY, 66.6% of group revenue). In Europe & RoW, revenue reached RMB 3,250 million (+29.7% YoY), benefiting from long-term partnerships with financially robust ODM customers adhering to TPD regulatory frameworks. In the U.S. market, revenue fell 15.6% YoY to RMB 1,493 million due to inventory adjustments by a major tobacco customer in anticipation of new FDA enforcement and product standards. In Mainland China, revenue dropped 50.3% YoY to RMB 58 million amid ongoing domestic market structural changes.
Self-Branded Business (ToC Segment – VAPORESSO)
Total ToC revenue increased 1.9% YoY to RMB 1,299 million, representing 18.0% of total group revenue. Proprietary Vaping (VAPORESSO) revenue reached RMB 1,277 million (+2.6% YoY). In the U.S. market, revenue increased 19.9% YoY to RMB 209 million as direct-to-consumer marketing, retail store distribution, and brand awareness deepened. In Europe & RoW, revenue decreased slightly by 0.2% YoY to RMB 1,068 million, impacted by geopolitical logistics disruptions in the Middle East and evolving local rules. Chinese market sales for beauty atomization fell 26.2% YoY to RMB 23 million as resource allocation shifted toward higher-margin core platforms.
Geographic Revenue Breakdown
| Region / Destination (RMB Million) | H1 2026 Revenue | H1 2025 Revenue | Change (%) | % Total Revenue* |
| Hong Kong, China (Transshipment/Resale) | 2,472 | 2,128 | +16.2% | 34.3% |
| United Kingdom | 2,028 | 1,501 | +35.1% | 28.1% |
| United States of America | 657 | 649 | +1.2% | 9.1% |
| Mainland China | 545 | 417 | +30.6% | 7.6% |
| Malaysia & Indonesia | 337 | 166 | +102.8% | 4.7% |
| Croatia | 316 | 223 | +41.6% | 4.4% |
| Japan & France | 230 | 280 | -17.8% | 3.2% |
Research, Development, and Financial Position
R&D investment represented 11.7% of group revenue, with core nicotine delivery R&D rising 34.7% YoY to RMB 645 million. The medical inhalation therapy subsidiary (Transpire) incurred an operational net loss of RMB 132 million while generating RMB 148 million (+24.8% YoY) in milestone revenue from its U.S. pharmaceutical partner and securing U.S. FDA acceptance for its third First-Filer Abbreviated New Drug Application (ANDA).
Balance sheet liquidity remains strong with cash and cash equivalents of RMB 3,956 million, short-term bank deposits of RMB 4,723 million, and zero interest-bearing debt. Operational stability is further reflected in a current ratio of 359.7% and trade receivables turnover of 57.1 days, supporting an interim dividend declaration of HK 20 cents per share (totaling approximately HK$ 1.24 billion).
Forward-Looking Catalysts and Regulatory Outlook
A pivotal turning point occurred in May 2026 when the U.S. FDA authorized the first non-tobacco/menthol flavored ENDS products and updated PMTA enforcement guidance. This shift removes regulatory bottlenecks for Smoore’s major U.S. partner brands, clearing the path for new compliant product launches in H2 2026 and setting up a reversal of the temporary 15.6% H1 U.S. ToB revenue decline. Additional key forward-looking growth drivers include the ongoing global commercial rollout of high-margin HNB products, open-system market share gains under VAPORESSO, and progress toward commercial monetization of Transpire’s medical inhalation drug-device pipeline.
Executive Summary
Smoore’s H1 2026 results demonstrate strong top-line revenue growth (+19.9%) and sequential gross margin stabilization, driven by hyper-growth in Heat-Not-Burn products and robust European expansion. Despite temporary first-half U.S. market headwinds, favorable May 2026 FDA regulatory updates, coupled with a zero-debt balance sheet and sustained R&D commitments, position the business for an improved operational trajectory across both core nicotine and medical therapy divisions entering H2 2026.
Download Smoore H1 2026 Results Press Release
April 2026: Smoore Q1 2026 Results – Revenue Surge Driven by Heated Tobacco, Profitability Recovers
Smoore reported unaudited revenue of RMB 3.856 billion for the first quarter of 2026, representing a strong year-on-year increase of 41.7% compared to RMB 2.72 billion in the same period last year. The growth reflects a clear rebound in core business activity, supported by both enterprise demand and continued expansion into next-generation reduced-risk product categories.
Profitability improved alongside revenue. Profit before tax rose to RMB 363.5 million, up 42.8% year-on-year, while net profit reached RMB 262.5 million, increasing by 36.6%. On an adjusted basis, which excludes share-based compensation expenses, net profit amounted to RMB 347 million, representing a more moderate increase of 10.7%. Despite this improvement at the net income level, total comprehensive income declined to RMB 127.9 million, down 38.5% year-on-year, indicating some pressure from non-operating or below-the-line factors.
| Item | 2026 (RMB mn) | 2025 (RMB mn) | Change (%) |
|---|---|---|---|
| Revenue | 3,856.0 | 2,721.5 | +41.7% |
| Enterprise customers | 3,267.4 | 2,198.9 | +48.6% |
| – E-vapor products & related services | 2,524.1 | 2,071.6 | +21.8% |
| – Heated tobacco services | 664.0 | 46.6 | +1,324.9% |
| – Atomized medical technology services | 79.3 | 80.7 | -1.7% |
| Proprietary brand business | 588.6 | 522.6 | +12.6% |
| – Self-branded e-vapor products | 581.0 | 508.5 | +14.3% |
| – Atomized beauty products | 7.6 | 14.1 | -46.1% |
| Profit before tax | 363.5 | 254.6 | +42.8% |
| Profit for the period | 262.5 | 192.2 | +36.6% |
| Total comprehensive income | 127.9 | 207.8 | -38.5% |
| Adjusted profit for the period | 347.0 | 313.6 | +10.7% |
| Adjusted profit (ex-medical) | 467.0 | 371.5 | +25.7% |
The enterprise-focused segment remained the dominant contributor, generating RMB 3.267 billion in revenue and accounting for c.85% of total sales, with growth of 48.6% year-on-year. Within this segment, revenue from e-vapor products and related services reached RMB 2.524 billion, increasing by 21.8%, while heated tobacco products and services emerged as the key growth driver, surging to RMB 664 million, up more than thirteenfold year-on-year. Atomized medical technology services contributed RMB 79.3 million, broadly flat with a slight decline of 1.7%.
The rapid expansion of the heated tobacco segment reflects the commercialization of new products developed in collaboration with strategic customers (e.g. British American Tobacco), particularly those launched in the second half of 2025. This highlights Smoore’s successful diversification beyond traditional vaping into adjacent reduced-risk categories, which are now beginning to scale meaningfully.
The proprietary (self-branded) business generated RMB 588.6 million in revenue, representing around 15% of the total, and grew by 12.6% year-on-year. Within this segment, self-branded e-vapor products delivered RMB 581 million in revenue, up 14.3%, while atomized beauty products declined significantly to RMB 7.6 million, falling by 46.1%.
Overall, while Smoore’s first-quarter results demonstrate a clear recovery in revenue growth and a meaningful rebound in reported profitability, investor sentiment remains notably cautious. The company’s shares declined by around 5% following the results and have continued a broader decline trend from a 52-week high of approximately HK$24 to below HK$10, reflecting persistent market skepticism.
This reluctance appears to be driven by several factors. First, despite strong top-line growth, the more modest increase in adjusted earnings points to ongoing margin pressure and a slower-than-expected normalization of profitability. Second, the sharp growth in the HNB segment, while strategically important, is still at an early stage and may be perceived as less predictable and potentially volatile as it scales. Third, the broader regulatory environment for vaping products – particularly in key export markets such as the U.S., UK and EU – continues to create uncertainty around long-term demand visibility.
In addition, the company’s historical margin compression, continued investment requirements, and evolving product mix have likely contributed to concerns about the sustainability and quality of earnings. As a result, even with improving financial performance, the market appears to be applying a discounted valuation, awaiting clearer evidence of stable margins, consistent earnings growth, and reduced regulatory risk before reassessing the equity story.
Download Smoore Q1 2026 Results Press Release
