Vape Giant Smoore Plans IPO, May Become China's First Vape Stock

Recently, one of the world's largest e-cigarette suppliers, Shenzhen Myle Technology Co., Ltd., submitted a prospectus to the Hong Kong Stock Exchange under its holding company Smoore International Holdings Limited, planning to list on the main board of the Hong Kong Stock Exchange, with CITIC Securities acting as the sole sponsor.<\/p>

In fact, as early as July this year, news about Myle's listing in Hong Kong had already spread. However, subsequent bans on e-cigarette sales were issued by both the U.S. and China, causing the e-cigarette industry to face a tumultuous and unpredictable situation. Notably, if Myle successfully lists, it will become the first e-cigarette stock in China.<\/strong><\/p>

In December 2015, Myle was listed on the New Third Board at a price of 11.8 yuan per share and once “climbed” to nearly 130 yuan per share in 2018, becoming the first stock on the New Third Board with a return exceeding 10 times.<\/p>

It was subsequently delisted on June 4, 2019. On its last trading day before delisting, Myle's closing price on the National Equities Exchange and Quotations was 134.76 yuan per share, with a market value of 8.53 billion yuan.<\/p>

It is worth mentioning that the prospectus also disclosed that in October, Myle issued convertible bonds to three institutions, including Jiahua Fund, with a valuation of 18 billion yuan at that time.
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In terms of performance, Myle has experienced explosive growth. In the first half of 2019, its revenue was close to the total revenue for the entire year of 2018, and profits are expected to enter the 1 billion club, a dazzling performance that would make most main board listed companies envious.<\/p>

The prospectus shows that Myle's revenues for 2016, 2017, 2018, and the first half of 2019 were 707 million yuan, 1.565 billion yuan, 3.434 billion yuan, and 3.274 billion yuan, respectively; adjusted net profits were 106 million yuan, 189 million yuan, 735 million yuan, and 931 million yuan.<\/p>

However, compared to the shocking rumors of high profits in the e-cigarette industry, Myle's gross profit margin is not high. Myle's business is divided into two parts: OEM and its own brand retail. Overall, the gross profit margin is around 30%. Although the gross profit margin for its own brand is relatively higher than that of OEM, the difference does not exceed 10%.<\/p>