Huaan: Glo Hilo launches into new market, actively promoting global expansion.

Huaan released a research report stating that in early June 2025, British American Tobacco announced the launch of a new high-end heated product line, glo Hilo, in Japan. By mid-October, glo Hilo had performed well in overall sales in Japan. The product trial was successful, creating a strong momentum for increased sales. It is expected to be phased into major markets in the second half of 2025, accelerating the growth of the company's heated tobacco revenue. British American Tobacco positions it as a "top platform for high-end heated tobacco," aiming to directly replace some IQOS users. The company continues to expand into the European market, and if strategic trials are successful in Poland, Italy, Eastern Europe, etc., deeper expansion into the Western European market is possible. With the advantage of traditional tobacco channels, it is expected to rapidly capture market share through the technological upgrade of Hilo. Huaan's main points are as follows: British American Tobacco (BAT) announced the launch of a new high-end heated product line glo Hilo in Japan on June 9, 2025, and it was available nationwide in Japan on September 1. glo Hilo (including glo Hilo, glo Hilo Plus, and compatible consumables virto) was first launched in Miyagi Prefecture for trial sales, with features such as TurboStart (5-second preheating), Quartz heating elements, AMOLED EasyView screen, and myglo app. It was then promoted nationwide in Japan through retail and experience stores, as well as online via myglo, on September 1. The Japanese market has always been BAT's main market for heated tobacco products in the APMEA (Asia-Pacific, Middle East, and Africa) region, contributing a 2.5% growth in new category revenue for the company in 2025. By mid-October, glo Hilo had performed well in overall sales in Japan. The product trial was successful, forming a strong momentum for increased sales, which will be phased into major markets in the second half of 2025, accelerating the company's heated tobacco revenue growth. British American Tobacco will open the glo Ginza flagship store in Tokyo on October 18, 2025, with main products including glo Hilo, Hilo Plus, glo HYPER pro, and compatible heated tobacco sticks (virto, neo, KENT, Lucky Strike), further promoting this series of products nationwide in Japan. As the largest single market for HNB globally, the strong sales expectations for Glo Hilo in Japan may directly impact the global market, bringing new growth momentum for the company's HP products. On September 18, 2025, British American Tobacco held the official launch event for glo Hilo in Warsaw, Poland, playing a crucial role as one of the first promotional markets. The company announced product information through the BAT/myglo Polish official channel, declaring Poland as one of the first markets for international expansion of Hilo. The company has set long-term goals, expecting to have 50 million adult consumers of smokeless products by 2030 and transitioning to a primarily smokeless business by 2035. Poland, as a core market for the company, will play a crucial driving role. The glo Hilo series products differentiate themselves from IQOS in design and positioning, possessing the potential to compete for market share. British American Tobacco positions it as a "top platform for high-end heated tobacco," aiming to directly replace some IQOS users. The company continues to expand into the European market, and if strategic trials are successful in Poland, Italy, Eastern Europe, etc., deeper expansion into the Western European market is possible. With the advantage of traditional tobacco channels, it is expected to rapidly capture market share through the technological upgrade of Hilo. SMOORE INTL (06969) continued its recovery trend in revenue in Q3 2025, with the HNB business becoming the core growth engine. As of September 30, the company achieved revenue of approximately RMB 41.968 billion, setting a new historical high for quarterly revenue, with a growth of about 27.2% compared to the same period last year and about 27.5% compared to the second quarter of the year. Both enterprise customer business and own-brand business revenue saw positive growth year-on-year and quarter-on-quarter. British American Tobacco plans to globally promote Hilo in 2025 and expects it to support a 3%-5% group revenue growth in 2026, with SMOORE likely to continue benefiting from the increase in new products for major customers. Risk warnings: risks of macroeconomic growth falling below expectations; risks of company operating conditions falling below expectations; risks of rising raw material prices; risks of exchange rate fluctuations; intensified competitive landscape.