E-cigarette Brand Shemile Reports RMB 8.74 Million Loss in the First Half of 2016

According to a report from Wabei Network on September 12, Shemile (stock code: 833116) recently released its semi-annual report for 2016, showing that during the reporting period, it achieved revenue of 29.0996 million yuan, a year-on-year increase of 2.18%; the net profit attributable to shareholders of the listed company was -8.7396 million yuan, an increase in loss compared to -2.6262 million yuan in the same period last year; basic earnings per share were -0.16 yuan, compared to -0.05 yuan in the same period last year.

As of June 30, 2016, Shemile's total assets amounted to 73.1148 million yuan, a decrease of 6.92% compared to the beginning of the period; the asset-liability ratio was 31.37%, an increase of 6.38 percentage points compared to the beginning of the period at 24.99%. The net cash flow from operating activities during this period was -13.4296 million yuan, compared to -3.1935 million yuan in the same period last year.

During the reporting period, Shemile's operating income of 29.0996 million yuan increased by 2.18% year-on-year, mainly due to the revenue from new customers in the tobacco industry.

During the reporting period, Shemile's net profit was -8.7396 million yuan, an increase in loss compared to -2.6262 million yuan in the same period last year, mainly due to two reasons: First, according to long-term strategic arrangements, Shemile's wholly-owned subsidiary (Dongguan Beika Electronic Technology Co., Ltd.) fully commenced production operations in March 2016, meeting the current order demand, leading to the closure of Shemile's wholly-owned subsidiary (Shenzhen Anyile Biotechnology Co., Ltd.) production department in Guangming New District, Shenzhen. In accordance with labor laws, Shemile properly resettled over 300 employees, incurring resettlement costs of over 3 million yuan. Second, the renovation of the headquarters office located on Wutong Island in Xixiang and the relocation expenses of the two locations increased operational costs.

According to data from Wabei New Third Board Research Institute, Shemile operates in the medical and healthcare products industry, with its main business being the research, production, and sales of e-cigarette products, e-cigarette components, and supporting products.