Daiwa issued a research report that recently$Smoore International Holdings Limited (06969.HK) $Reaffirm its confidence that its core product, Vuse Alto, will be granted the U.S. Tobacco access permit (PMTA). According to a recent progress report from FDA, the bank believes that the next approved product will be selected from Vuse Alto or JUUL, and the results are expected to be disclosed in the next 1-2 months, or by the end of 2022 at the latest. In addition, the bank believes that the company's disposable e-cigarettes will be shipped on a large scale in the second half of 2022, focusing on markets outside China / the US, or introducing new growth drivers.

The bank believes that the company's share price largely reflects stricter industry regulation and points to limited downside for its China business. The industry is expected to transition to products that meet national standards by the end of September and uses new products successfully launched in China in the coming months as catalysts. The bank cut its 2022-24 earnings by 10-16 per cent and its target price by 4 per cent from HK $24 to HK $23 as a result of the shift in its product mix, with its gross margin forecast low. Given that the current share price has generally reflected the weakness of the Group's China business in 2022, the bank referred to the current appropriate risk-return buying point, reiterated its "buy" rating, and pointed out that the main downside risk was the failure of VuseAlto's PMTA application.