SKE’s Parent Company Yinghe Technology Reports 140% YoY Growth in Q3 Net Profit, Revenue May Have Be

A senior vaping industry professional told 2Firsts that due to factors such as increased outbound travel in European countries during the third quarter and supply chain adjustments, this quarter is usually considered the off-season for e-cigarettes. However, based on Yinghe Technology’s financial results, it can be inferred that SKE, which mainly targets the European market, did not see its performance decline.

On the evening of October 23, Yinghe Technology (300457.SZ), the parent company of vaping star brand SKE, released its Q3 2023 report. The report shows that quarterly revenue reached RMB 2.696 billion, up 35.52% year over year; net profit attributable to shareholders of the listed company was RMB 213 million, up 139.89% year over year and 9% quarter over quarter. For the first three quarters, cumulative revenue was about RMB 7.497 billion, up 13.37% year over year, while net profit attributable to shareholders was about RMB 511 million, up 44.74%.

Despite the strong results, Yinghe Technology’s stock price fell sharply on October 24. By the close, the company’s shares were at RMB 20.72, down 5.52%.

Although Yinghe Technology did not specifically disclose revenue from SKE’s vaping business, data from the company’s earlier interim report indicated that Yinghe’s profit growth was mainly driven by contributions from SKE’s vaping business.

Data shows that in the first half of the year, Yinghe Technology achieved net profit attributable to the parent of RMB 298 million, up 12.81% year over year. Net cash flow from operating activities surged 471.14% year over year to RMB 525 million. Meanwhile, revenue from the vaping business reached RMB 1.433 billion, up 1,477%, with a gross margin as high as 40.91%, an increase of 26 percentage points year over year. Yinghe subsidiary SKE posted net profit of RMB 417 million in the first half, while another subsidiary, Huizhou Yinghe Technology, posted only RMB 170 million.

A senior vaping industry professional told 2Firsts that due to factors such as increased outbound travel in European countries during the third quarter and supply chain adjustments, this quarter is usually considered the off-season for e-cigarettes. However, based on Yinghe Technology’s financial results, it can be inferred that SKE, whose main market is Europe, did not experience a decline in performance.

Based on SKE’s recruitment information and sources in the industry, 2Firsts learned that the UK has recently been discussing whether to ban the sale of disposable e-cigarettes, prompting distributors to stock up. This means that demand for SKE’s orders has not decreased but has instead increased, which would undoubtedly boost SKE’s revenue.

In addition, SKE is understood to hold a strong position not only in the UK market, but is also a leading brand in the Dutch disposable e-cigarette market. The company has also expanded into North America, the Middle East, and other markets. These are among the key factors ensuring SKE’s stable performance.