Smoore International Holdings Limited provided earning guidance for the six months 30 June 2023. The board of directors of the Company expected that the total comprehensive income of the Group for the Period will be approximately RMB 717.3 million to RMB 792.8 million, representing a decrease by approximately 42.7% to 48.2% as compared to RMB 1,384.1 million for the six months ended 30 June 2022; the adjusted net profit will be approximately RMB 741.4 million to RMB 816.9 million, representing a decrease by approximately 43.1% to 48.4% as compared to RMB 1,436.3 million for the Comparable Period. The main reasons for the decrease are: 1) Revenue decreased by approximately 9.4% compared to the Comparable Period.

The revenue of the Group from the Mainland China market for the Period was approximately RMB 62.1 million, representing a significant year-on-year decrease of approximately 96.3%, and its proportion to total revenue decreased from approximately 30.0% in the Comparable Period to approximately 1.2%. Although the revenue from the Mainland China market in the second quarter of 2023 has significantly increased compared with the first quarter of 2023, it is still far below the same period last year. During the Period, the revenue of the Group from overseas markets 2 was approximately RMB 5,060.8 million, representing a steady growth of approximately 28.0% year-on-year.

Among them, the revenue from the U.S. market was approximately RMB2,215.3 million, representing a year-on-year increase of approximately 26.9%. With the strengthening of supervision and enforcement of non-compliant products, compliant products are expected to gain more room for sustainable growth in the U.S. market; revenue from Europe and other markets was approximately RMB 2,845.5 million, representing a year-on-year increase of approximately 28.8%. The Group launched disposable products with a better experience under the compliance framework in this market, which were well received by clients and users, and the revenue from this market continued to grow.

Although the Group's revenue from overseas markets recorded a year-on-year increase during the Period, it was still insufficient to offset the impact of the decline in revenue from the Mainland China market; 2) The year-on-year decrease in gross profit margin, which was mainly due to the significant year-on-year decrease in the proportion of revenue from Mainland China with a relatively high gross profit margin to total revenue, and the proportion of revenue from disposable products with relatively low gross profit margin to total revenue increased year-on-year.