While much of the attention has been focused on the recent resurgence of the US-China trade conflict, SMOORE International quietly disclosed its Q3 2025 performance. Although the market’s reaction hasn’t been overwhelmingly positive, a closer look reveals that the results are actually quite impressive.

Close-up of automated manufacturing process with robotic arms and precision machinery

1. Q3 2025 Earnings Surpass Expectations

SMOORE International reported Q3 2025 revenue of RMB 4.2 billion, setting a new single-quarter record and reflecting a 27.5% year-on-year growth. Adjusted net profit reached RMB 444 million, marking a 4.8% increase year-on-year. Both revenue and adjusted net profit growth exceeded market expectations. For the first three quarters of 2025, SMOORE’s revenue totaled RMB 10.2 billion, up 21.8% year-on-year, while adjusted net profit stood at RMB 1.18 billion, a slight 0.1% increase. So far, both revenue and profit have surpassed our expectations (with revenue significantly exceeding expectations, while adjusted net profit was largely in line).

2. Why Did SMOORE Outperform Expectations?

The main reason for SMOORE’s better-than-expected performance in Q3 2025 is the significant increase in the shipment of heated tobacco products. Consumer feedback has been largely positive, with many praising the rapid heating, smoke-like flavor, and better odor control compared to competitors like IQOS. While some reports mention minor burnt or paper-like tastes, the overall response has been favorable. SMOORE has accelerated the market rollout of its products: the Hilo brand was launched nationwide in Japan on September 1 and will be available in Poland starting in October, with further expansion planned for Italy. Additionally, the European ban on disposable e-cigarettes and increased enforcement in the US have helped revive SMOORE’s vaporizer e-cigarette business. Many previously popular disposable e-cigarette flavors in the US have been removed from the shelves, leading to a decline in non-compliant e-cigarette products, although some remain in certain stores, such as gas stations or local shops in immigrant communities.

3. Why Did Profit Margins Decline Year-on-Year?

SMOORE’s gross margin and profit margin may have decreased in Q3 2025 compared to last year. According to the company, the reasons are as follows:

1、The heated tobacco business, which has seen growth, currently focuses on promoting lower-margin devices. The more profitable tobacco sticks may see greater shipments in 2026.

2、In the e-cigarette sector, SMOORE has introduced several new products like 2+N, 0+N, and multi-in-one products to cater to local European customers and seize market share. These new products have lower margins compared to the pod-based products offered in partnership with major tobacco companies.

4. Vapor E-Cigarette Recovery Status

In Q3 2025, SMOORE’s revenues from Europe and other regions grew much faster than the overall revenue. Particularly, revenues from local medium-sized clients supported by SMOORE have seen rapid growth. However, the recovery of the compliant e-cigarette business in the US has been slower than in Europe. This is mainly due to SMOORE’s large client BAT’s weaker-than-expected performance in the US market, which is also tied to the competitiveness of BAT’s products.

5. Impact of the US-China Trade Conflict on SMOORE

According to SMOORE, the ongoing US-China trade tensions have had limited impact on the company. The majority of SMOORE’s products sent to the US are manufactured at their Southeast Asian factories, and these products have already been recognized by US customs as being produced in Southeast Asia. Therefore, the trade conflict has not significantly affected the company’s business.

China and the United States have a trade war with containers

FAQ：

Q1: What is an e-cigarette?
An e-cigarette is an electronic device that heats e-liquid to produce vapor. It provides a smoking-like experience without burning tobacco, reducing the production of harmful substances like tar and carbon monoxide.

Q2: Do e-cigarettes contain nicotine?
That depends on the e-liquid. Some e-liquids contain nicotine, while others are completely nicotine-free. You can choose according to your personal preference.

Q3: Are e-cigarettes safer than traditional cigarettes?
E-cigarettes are considered a less harmful alternative because they do not involve combustion. However, they are not completely risk-free and should be used responsibly by adults.

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