Smoore International (6969 HK): New HNB Partnership and US Flavored Vapes Launch

Smoore International has released its 3Q26 financial update: 9M26 revenue was RMB11,155mn (+9.3% YoY) and the adjusted NP was RMB1,209mn (+2.3% YoY). Excluding the phased impact of losses from the atomization medical business, the adjusted NP was RMB1,384mn (+2.6% YoY). For 3Q26, revenue/adjusted NP was RMB3,946/452mn (-6.0/+1.8% YoY). We attribute the YoY drop in 3Q revenue mainly to high bases in both atomization and HNB businesses; however, benefiting from product-mix improvement and expense reduction, the 3Q profit grew steadily. Looking ahead, we expect global regulatory changes to favor compliant leaders, benefiting the company's core atomization business; the HNB business is steadily advancing its 'multi-client + multi-product' commercial platform layout. We are positive on the value of the company's atomization technology and heated tobacco solutions. Maintain BUY. Smoore International is on our Huatai Conviction BUY list.