Zhitong Financial APP learned that Soochow Securities released a research report saying that Baoan District of Shenzhen City is a cluster of e-cigarette manufacturing enterprises in China, and the policy issue in Baoan District to encourage the development of electronic atomization equipment enterprises plays a positive role in smoothly passing through the policy running-in period and embarking on the road of sustainable development. The industry is moving towards legalization and standardization, and the short-term market size may be disturbed by policy landing, but the medium-and long-term permeability is expected to continue to improve. The valuation performance-to-price ratio is highlighted after the recommended callback.$Smoore International Holdings Limited (06969.HK) $It is suggested that we should pay attention to the extensive layout of the industrial chain.$Jinjia Co. (002191.SZ) $The advantages of brand and user volume are expected to continue.$RLX Technology Inc. (RLX.US) $。
The main points of Soochow Securities are as follows:
Event 1:On 2022-3-25, FDA of the United States announced that it had authorized the sale of eight products of the JT e-cigarette brand Ploom Tech, including Logic Vapeleaf (using the Logic brand outside the United States), Logic Power and Logic Pro (including electronic atomizers). The products approved this time are all tobacco flavor, and some products of Logic (including menthol flavor) are still in the approval process.
Event 2:In the "some measures for promoting the High-quality Development of Advanced Manufacturing and Modern Service Industry in Baoan District" issued by the Baoan District Government of Shenzhen City on 2022-3-20, it is proposed that it will support the development of advantageous industries with regional characteristics, encourage the agglomeration and development of enterprises in characteristic advantageous industries such as new electronic atomization equipment, reward the main body of the construction of electronic atomization equipment professional park, and give special advantage industrial enterprises such as new electronic atomization equipment. Rewards are given according to the increment of value added.
The comprehensive strength of Smoore International Holdings Limited and Heyuan technology has been recognized by the FDA of the United States, and the rest of the products are more likely to pass the audit.PMTA audit includes factory inspection, and the approved product manufacturers include Smoore International Holdings Limited and Heyuan Technology, indicating that the comprehensive strength of the two manufacturers has been recognized by the FDA of the United States. In addition, all the approved products submitted their applications in August 2019, and the FDA of the United States carried out factory inspection in January 2020. Affected by COVID-19 's epidemic situation, the factory inspection of FDA in China in the United States has been suspended after January 2020, and the rest of the domestic manufacturers have not yet passed the factory inspection of FDA in the United States. Therefore, we judge that it is more likely that other products of Si Moore and Heyuan Technology will be approved in the short term, while the products of other manufacturers will still have to wait a long time.
PMTA audit standards are higher, the industry is expected to accelerate the concentration of head brands.99 per cent of the 256.7 million e-cigarette listing applications have been accepted as of 2022Accord 3 / 260. of these, only eight applications from JT and three applications from Renault Tobacco have been granted listing permits, more than 100m applications (involving more than 260brands) have been granted a "non-listing" review result (Marketing Denial Orders) at the review stage, and the remaining applications have been rejected at the preliminary stage (Refusing to file). The 11 applications currently approved are all tobacco-flavored products, and some menthol products are still under review. The audit standard of PMTA in the United States is higher, and the market share is expected to accelerate the concentration of head brands.
China and the United States accelerate the standardization of the e-cigarette industry and are optimistic about the healthy development of China's e-cigarette manufacturing industry.The approval of PMTA in the United States continues to advance, but the products that have passed PMTA are not mainstream best-selling products in the US market, of which three Logics products were listed in the United States in 2017; Vuse Solo is a cotton core product. Mainstream products such as the Vuse Alto series, which is manufactured by Simor, are still under review, and more products are expected to be approved for launch. In terms of domestic policy, the Tobacco Administration of China issued the measures for the Administration of Electronic cigarettes in 2022-3-12 and will formally implement them on 2022-5-1. In 2022-3-25, China's "National Standard for Electronic cigarettes" once again entered the "approval" stage, and is expected to be released and implemented in the near future. The United States is the world's largest consumer of e-cigarettes, while China is the global e-cigarette manufacturing center. According to the White Paper on E-cigarette Industry of the China Electronic cigarette Chamber of Commerce, there are more than 1500 e-cigarette manufacturing and brand enterprises in China in 2021, with exports reaching 138.3 billion yuan, accounting for more than 50% of exports to the United States. The supervision of the e-cigarette industry in China and the United States is accelerated, and the industry continues to move towards standardized development, which is conducive to the medium-and long-term healthy development of China's e-cigarette manufacturing enterprises. Baoan District of Shenzhen is a cluster of e-cigarette manufacturing enterprises in China. The policy of Baoan District to encourage the development of electronic atomization equipment enterprises plays a positive role for e-cigarette manufacturers to get through the policy running-in period smoothly and embark on the road of sustainable development.
Risk tips: uncertainty of industry policy, change of PMTA audit standards, intensification of industry competition, etc.
This article is edited from Zhang Xiao's Insight of Light Industry consumption; Zhitong Financial Editor: Han Yongchang.