China electronics company Smoore International Holdings Ltd., the world's largest maker of e-cigarettes by revenue, has shrugged off disruptions from the coronavirus and political tensions and continues to make profits. The company withstood tougher regulations on vaping both at home and abroad.
The Shenzhen-based company said it made a net profit of more than 1.3 billion yuan for the first half of 2020. This is a 40 percent increase compared with last year. Revenues for the period increased by about 18.5 percent on year to 3.88 billion yuan.
The company would have generated a lot more profit if it weren't for a fall in its production capacity in the first quarter, Smoore chief financial officer Wang Guisheng said. Like other companies in China, Smoore was forced to shut down manufacturing for a month as a result of the coronavirus pandemic.
After it restarted Smoore quickly made up for the first-quarter losses, it said. Its second-quarter revenues were more than double those of the first three months.
As of December, Smoore held around 16.5 percent of the $763 billion international vaping-devices market compared with 10 percent in 2018. Most of its growth is attributed to a big increase in the number of smokers switching to vaping, the company said.
Smoore is pushing ahead with an expansion plan to meet growing worldwide demand for vaping devices, it said. Apart from increasing production capacity Smoore will use automation and advanced manufacturing technologies to reduce unit production costs, company chairman Chen Zhiping said.
Its expansion will be in two phases with the first set to double production capacity by 2021 and the second by about two-thirds by 2023.
China supplies about 90 percent of the world's vaping devices. Around 90 percent of those are exported to the U.S. and Europe.
