Today morning, AH e-cigarette concept stocks continued to strengthen together, A-share tobacco concept index continued to open high, as of press time, more than yesterday's all-day transactions, including Shaanxi Jinye, Shunhao shares rose by the limit, Warburg shares, Jiyou Group rose more than 8%, China Science Information, Kane shares have risen sharply.

In terms of Hong Kong stocks, Smoore International Holdings Limited continued to lead the way, while China Tobacco Hong Kong and Huabao International rose more than 6%, China Bolton and Tianchang Group rose more than 5%, and BYD Electronic followed suit.

On the news side, on October 25, the Ministry of Finance and other three departments issued a notice to bring e-cigarettes into the scope of consumption tax and add e-cigarettes under the cigarette tax. The consumption tax is levied on e-cigarettes, the production (import) link tax rate is 36%, and the wholesale link tax rate is 11%. For taxpayers to export e-cigarettes, the export tax refund (exemption) policy is applicable.

The market had generally expected the tax rate on e-cigarettes to be calculated on the basis of 80% or 100% of cigarettes. The effective tax rate is far lower than expected, which greatly alleviates investors' worries about the convenience of relevant listed companies.

According to the relevant analysis, after the implementation of the new tax standard, the brand price as a production link may rise, and the terminal price will rise accordingly; on the other hand, it also means that the industry is accelerating towards an orderly stage of development. the upper and lower reaches of the industrial chain are facing a reshuffle, and the industry concentration may continue to rise.

The consumption tax on e-cigarettes is levied. Is the price of the product going up?

After the tax, whether the price will rise or not is a difficult problem for enterprises. The announcement said that the tax rate on production (import) is 36% and that on wholesale is 11%. Before that, e-cigarettes were levied only 13% VAT.In short, with the tax increase, the retail terminal price of e-cigarettes may face a big increase.

Among them, the tax payer in the production link is the production enterprise.Whether the 36% tax is absorbed by enterprises or passed on to the sales terminal is a matter of great concern to e-cigarette shopkeepers.

Some people in the industry said:

According to cigarettes, the gross margin of offline retail is not high, normally 18-25 points, but the gross margin of e-cigarettes can reach 50%.This tax increase will most likely lead to an increase in the price of e-cigarette retail.

It is understood that after the tax announcement was issued on the 25th, enterprises can adjust the prices of products that have been reported as ex-factory prices, including value-added tax and consumption tax. In addition, you need to fill in the recommended retail price adjustment module before 22:00 on October 28th, the final new price will take effect at 00:00 on November 1st, and the new transaction will be executed according to the new price.

Zhongtai Securities Research newspaper has made assumptions about the impact of the consumption tax rate of "36%-11%" on e-cigarette profits. According to the calculation of 33 yuan for a cigarette bullet of Yueke brand, the total tax burden of each link of e-cigarette is 4.3 yuan before taxation, and the incremental tax burden can reach 8.2-14.2 yuan after taxation, that is, the maximum tax burden becomes more than three times that of the original.

If the proportion of gross profit of each link remains unchanged, the impact on the contract end and the brand end is greater than that on the wholesale and retail end, and the gross profit margin of each link decreases by 10-30 percentage points. However, the impact of consumption tax on e-cigarettes can be partially digested by means of price negotiation within the industry chain and rising terminal prices.

The tax increase policy has the greatest impact on the profits of e-cigarette brands, but as of the press release, no e-cigarette brands have responded to this.In the industry, it is expected that there will be bargaining adjustment in the follow-up industrial chain, "for example, the brand bears part, the contract manufacturer bears part, and all the costs will not be borne by themselves." "

Companies have only two days to think about whether to raise prices. In addition to fighting with the original products, whether to increase the price is also a game between the whole e-cigarette enterprises.

Some people in the industry said that consumers who buy e-cigarettes consider taste and price the most. Under the condition of almost the same taste, the relatively cheap cigarette bomb can attract consumers more, and the enterprises that take the lead in raising prices may face the problem of consumer loss. And if consumers think that the price of domestic e-cigarettes is too expensive, they can also choose foreign OEM products in blind areas of supervision. At present, such products also have more room in the market.

The "Research Group on consumption tax in Electronic cigarette Industry of Renmin University of China" points out in the "Research on the setting of consumption tax in China's Electronic cigarette Industry":

Combined with the traditional tobacco consumption tax reform, the tax rate has been raised for five times.This report believes that the collection of consumption tax on e-cigarettes will not be achieved overnight, on the one hand, it will gradually complicate from a simple tax system, on the other hand, it will use periodic increases in tax rates as a means of collection, so as to constantly adapt to the changing market environment.

But in any case, after the legal compliance of the industry, the competition among e-cigarette companies may have just begun.