E-cigarette stocks collectively opened higher in early trading on November 24, with Smoore International Holdings Limited (06969) shares up nearly 9 per cent at one point, Zhitong Financial APP learned. On the news side, yesterday, the two departments issued a circular on the delivery of e-cigarette products, atomization, e-cigarette nicotine and other implementation of limited management. Industry insiders pointed out that this is conducive to the fight against illegal trade. The delivery of e-cigarettes will be strictly restricted and limited to express national standard e-cigarettes, illegal e-cigarettes are not allowed to circulate, let alone express delivery.Open source securities said that Simor atomization e-cigarette equipment manufacturing leader is stable, the main supply products VUSE Alto FDA audit is about to land and FEELM Air/Max new technology to the market, business is expected to pick up; medical atomization to create a second growth curve, the company's R & D investment pace is accelerated, the results are expected to land industrialization this year.

Specifically,The State Post Bureau issued a circular on the limited delivery of e-cigarette products, atomization, nicotine for e-cigarettes, etc.The limit for each piece of electronic cigarette products is: 2 cigarette sets; 6 electronic cigarette cartridges (liquid atomization) or 6 products sold in combination with cigarette cartridges (including disposable e-cigarettes, etc.), with a total smoke liquid capacity not exceeding 12ml. Each piece of nicotine for nebulization such as cigarette liquid and electronic cigarette is limited to 12ml. Send and deliver cigarette sets, electronic cigarette cartridges (liquid atomization), cigarette cartridges and cigarette sets sold in combination (including disposable e-cigarettes, etc.), atomized products such as cigarette liquid, nicotine for electronic cigarettes, one piece per person per day, no more than one piece per day.

The State Tobacco Monopoly Bureau also issued a notice on the limited carrying of e-cigarette products, atomization and nicotine for e-cigarettes in different places.According to the relevant regulations, each person carrying electronic cigarette products, aerosols and nicotine for electronic cigarettes in different places shall be subject to limited management: no more than 6 cigarette sets, no more than 90 electronic cigarette cartridges (liquid atomized substances), no more than 90 products sold in combination with cigarette cartridges (including disposable electronic cigarettes, etc.), and no more than 180ml for liquid atomization and nicotine for electronic cigarettes.

In addition to the above detailed rules, according to the Ministry of Finance, the General Administration of Customs and the State Administration of Taxation jointly issued a message on October 25 thatSince November 1, e-cigarettes have been brought into the scope of consumption tax.Then, on the evening of November 3, Smoore International Holdings Limited announced on the Hong Kong Stock Exchange that according to the group's preliminary understandingThe Group accepts the entrustment of e-cigarette brand enterprises to produce, sell or export e-cigarettes in mainland China, and does not have to pay consumption tax.In the third quarter of 2022, about 22% of the group's revenue came from mainland China. The Group firmly supports and supports the levy of consumption tax on e-cigarettes, which is conducive to the sustainable and healthy development of the industry. Seymour Group firmly supports and supports the levying of e-cigarette consumption tax, which is conducive to the sustainable and healthy development of the industry. Smoore International Holdings Limited's share price opened high on November 4th, closing up 11.35 per cent.

With the implementation of e-cigarette consumption tax, a number of e-cigarette retailers are waiting in front of the national unified e-cigarette transaction management platform to update the tax wholesale price and suggested retail price of e-cigarette products. According to the final results, Yue carving, grapefruit, magic flute, Ono, Kemi, firearms and other brands of smoking sets and smoke bombs have increased in varying degrees. Take Yuejie, which has a wide audience as an example, the wholesale prices of its four cigarette sets range from 32.83% to 95.3%, and the suggested retail prices range from 33.52% to 97.49%.

Yao Jide, chairman of the Electronic cigarette Professional Committee of the China Electronic Chamber of Commerce, said that the domestic atomization industry is in a critical opportunity, the market environment is gradually standardized, industry standards are gradually clear, and the underlying technology is constantly innovating. The atomization industry will continue to maintain a good momentum in the export field, and may usher in a new round of growth. The market size of China's e-cigarette industry reached 19.7 billion yuan in 2021, an increase of 36 percent over the same period last year, according to the 2022 Electronic cigarette Industry Export Blue Book. On the export side, the total export volume of e-cigarettes in 2022 is expected to reach 186.7 billion yuan, with an estimated growth rate of 35%.

In terms of performance, Smoore International Holdings Limited achieved an adjusted net profit of 721 million yuan in the third quarter of 2022, and about 22% of the group's income came from mainland China. Smoore International Holdings Limited pointed out in the announcement that mainly due to the reduction of product prices for individual major customers in the first half of 2022, while the one-time atomization business with low gross profit margin increased greatly, the proportion of the overall business increased, and so on.

Smoore International Holdings Limited is the contract manufacturer of Yueyu carving. in addition, the domestic e-cigarette brands of grapefruit, Xuejia and magic flute are all Smoore International Holdings Limited's customers. From many angles, Smoore International Holdings Limited's share in the domestic market is not to be underestimated.According to market size data from Frost & Suvillian, the company has a global market share of 22.8% in 2021. Revenue from the mainland market accounted for 30% of revenue in the first half of 2022, according to the company's financial report.

Guoyuan Securities pointed out that at present, the export scale of e-cigarettes in China is increasing rapidly. In 2021, the global e-cigarette market reached US $80 billion, an increase of 120.4% over the same period last year, of which China's exports totaled 138.2 billion yuan, an increase of 179.8% over the same period last year. At present, the export of e-cigarettes is applicable to the export tax refund (exemption) policy, which is not affected by consumption tax. It is suggested that we should pay attention to Smoore International Holdings Limited, the leader in the production of global atomization equipment.

Open source securities said that Simor atomized e-cigarette equipment manufacturing leader is stable, medical atomization to create a second growth curve. The company takes atomization core technology as the core, and its business is constantly extended to create an international atomization technology platform enterprise. The new tobacco business is under pressure due to pending regulatory policies, but the company has a strong cooperative relationship with its core customers, with the increase of market concentration under strong supervision, the VUSE Alto FDA audit of the company's main products is about to be launched and the new FEELM Air/Max technology is introduced to the market, and the business is expected to pick up. In terms of medical atomization, the company has accelerated the pace of R & D investment, and the results are expected to be industrialized by the end of the year.

CITIC pointed out in the research report released that the bottom of domestic policy is clear, and the rebalance between supply and demand is expected to gradually become clear by the end of the year. The company promotes the business of disposable cigarette and medical atomization in an orderly manner, and moves towards a platform company of atomization technology. The inflection point of the company's performance under the low base + undervaluation is expected to catalyze greater valuation flexibility.