The global e-cigarette market continues to expand, and China, as an important exporter, is expected to fully benefit
The global e-cigarette market sales in 2023 were 79.39 billion yuan, and are expected to reach 293.53 billion yuan in 2030, with a CAGR of 20.54%. As an important global exporter of e-cigarettes, China's total exports of e-cigarette products reached US$11.08 billion in 2023, an increase of 12.48%. In the future, the Chinese e-cigarette market is expected to grow further as the global market develops.
Under technological iteration, the penetration rate of e-cigarette MEMS microphones has increased rapidly. Compared with traditional electret microphones, the performance of MEMS microphones in terms of high temperature resistance, waterproof oil resistance, and evaporation resistance has been fully upgraded, solving the common pain points of electret microphones; at the same time, MEMS microphones also have advantages in terms of production yield and consistency. Therefore, along with the growing popularity of the e-cigarette market and increasing consumer demand for product experience, many leading and small e-cigarette manufacturers have begun to use MEMS microphones on a large scale. It is expected that the e-cigarette industry will achieve MEMS microphone coverage of more than 50% by the second half of 2024.
The company has mastered core technology and pioneered the deployment of MEMS micro differential pressure products. The company began R&D of MEMS micro differential pressure sensors in 2019, which can provide customers with comprehensive support such as customized chip development and application structure design, and achieve mass shipment to customers around the world. As of March 2024, the company has shipped more than 100 million MEMS micro differential pressure sensors, mainly: MEMS switches, MEMS empty microphones (MEMS only), and MEMS solution modules. At the same time, in order to meet the market needs of leading customers in the industry, the company already has a monthly sealing production capacity of more than 50 million units, and will continue to increase the sealing and testing production capacity to 100 million units per month in 2024 according to customer needs. In the future, the company will increase investment to further meet market demand and product transformation to provide MEMS products with better performance and higher reliability for the electronic atomization market.
Profit forecasting
The company's revenue for 2024-2025 is 4.85, 6.28, and 820 million yuan, respectively, EPS is -0.30, 0.43, and 0.72 yuan, respectively. The current stock price corresponds to PE of -141, 100, and 60 times, respectively. As a global advanced MEMS sensor manufacturer, the company has made significant achievements in the field of acoustics. Considering that the company uses the technical superposition advantages of MEMS platform companies, it is expected to gradually increase its share in the MEMS differential pressure market; the first coverage gave it a “buy” investment rating.
Risk warning
The development of the e-cigarette industry falls short of expectations; e-cigarette regulatory policies have been tightened; the penetration rate of MEMS microphones falls short of expectations; competition for MEMS microphones is fierce, etc.