From June 29 to July 3, Si Moore (06969.HK) officially launched a public offering. It is expected to be listed on the Hong Kong Stock Exchange on July 10. CITIC Securities is its sole sponsor. The fund raised this time is about RMB 6.053 billion for new production capacity and automated upgrade of production lines.
According to the prospectus, Simo adopts OEM/ODM production and its own electronic cigarette brand model, known as "Foxconn" in the electronic atomization equipment industry. According to Frost & Sullivan statistics, in 2019, Simore accounted for 16.5% of the global market with RMB 7.611 billion in revenue, making it the largest manufacturer in the market.
At the leading position in the "addictive" consumer products market, Simo has grown its revenue by 10 times and its net profit by 20 times in the past three years. From 2016 to 2019, the company's net profit for the year was RMB 106 million, RMB 189 million, RMB 734 million, and RMB 2.174 billion.
In terms of sales volume and unit price, the sales volume of electronic atomization equipment in 2019 was 512 million units, and the unit price was 8.7 yuan. In 2018, it was 199 million, with a unit price of 5.7 yuan. This mainly involves the sales of ceramic atomizing cores. The gross profit of products containing ceramic cores reached 50.5%. The sales volume of electronic atomization components in 2019 was 280 million units, with a unit price of 7.5 yuan, and the total sales in 2018 were 294 million units, with a unit price of 4.7 yuan. This piece mainly involves the sale of products such as heating and non-combustion. Gross profit reached 42.1%.
However, behind Simo’s brilliant performance, countries around the world are strengthening the supervision of electronic cigarettes. At present, there is still uncertainty about whether smoking electronic cigarettes is safe enough.
In the prospectus, Simo admits: "If the medical community determines that the use of electronic atomization equipment will cause long-term health risks, the market demand for electronic atomization equipment may decline significantly, which may cause the company's business, financial situation and operation. Significant adverse effects."