E-cigarette manufacturer Smoore is rumored to seek Hong Kong IPO approval

According to reports, e-cigarette equipment manufacturer Smoore International Holdings Co., Ltd. (hereinafter referred to as "Smoore") plans to seek approval from the Hong Kong Stock Exchange for its initial public offering (IPO) plan as early as Thursday, and the transaction may raise at least US$800 million. 

If it passes the Hong Kong Exchange hearing, Small will begin assessing investor demand for the IPO as soon as next week.

Founded in 2009, Smore initially used ODM and OEM models to manufacture atomization and heating products. It began exporting products to the United States in 2012 and exported its products to Europe in 2015. Frost & Sullivan research shows that Small was the world's largest e-cigarette equipment manufacturer in terms of revenue in 2018.

Smore has two main businesses: First, it researches, designs and manufactures closed electronic atomization equipment and components for tobacco companies and independent electronic atomization companies. Its main customers include Japan Tobacco, British American Tobacco, Reynolds Asia Pacific, RELX and NJOY and other international tobacco giants; the second is to conduct research, design, manufacturing and sales of private brand open electronic atomization equipment or APV for retail customers.

In December 2019, Smore submitted a listing application to the Hong Kong Stock Exchange. The prospectus shows that from 2016 to 2018, the company's revenue grew rapidly from 707 million yuan to 3.434 billion yuan, with a compound annual growth rate of over 120%; the adjusted net profits were 106 million, 189 million, and 735 million respectively, with a compound annual growth rate of The rate is as high as 163%. In the first half of 2019, Smore achieved revenue of 3.274 billion yuan, almost catching up with last year's full year results, with a net profit of 921 million yuan.

Although the performance is dazzling, it is not easy for Smore to go public. The "Risk Factors" section of the company's prospectus is 33 pages long. It mentions many factors that may have an adverse impact on the company's performance and also discloses that the company has many potential risks in compliance operations.