Event description

Smoore International Holdings Limited's atomization brand FEELM held a new technology conference in London, UK, officially launched a new generation of ultra-thin electronic atomization solution-FEELM Air. FEELM Air uses a new generation of bionic film ceramic core, equipped with the industry's first seven-layer composite heating film, the thickness of the film is reduced from 80 μ m to 2 μ m, and the overall ceramic substrate thickness 3.5mm is 22% thinner than the previous generation.

Event comment

Technology upgrades have led to a significant improvement in performance. Technically, the use of 7-layer composite heating film to improve performance and experience, the use of linear motor (placed on the cigarette set) to enhance the "human-computer interaction" experience, the use of MEMS sensor technology (placed on the cigarette set) to replace the traditional head to provide more sensitive and reliable air flow control, the use of super energy management system to improve charging speed and battery life Performance: 1) experience improvement: including lighter and thinner products (refer to the fourth generation, thickness reduced by 25%), anti-leakage performance by 237%, taste reduction by 33%, energy efficiency by 13%, battery life / charging speed, etc. 2) stronger harm reduction: heavy metal damage reduction increased by 79%, aldehyde and ketone damage reduction increased by 81%.

Through the new technology path, the new products are expected to accelerate the increase of the company's market share and raise the threshold of the ceramic atomizing core industry. It is worth noting that the previous upgrade of Seymour products is more focused on the micro-innovation of the previous generation of "metal-coated ceramics". As a great change in Simor's atomization technology in recent years, this new product launch shows that the company is actively seeking change in the fierce market competition. backed by the foundation-applied research system to promote the continuous iteration of the product. To explore the medium-and long-term technological evolution, we judge that on the one hand, atomization technology will continue to enhance experience and reduce harm, on the other hand, we may explore the simulation of traditional tobacco taste (at present, atomized tobacco is mostly fruit and other flavors). The main reasons are: 1) it can reduce the moral / policy risks caused by inducing new smokers; 2) more complex flavor molecules may enhance users' taste memory and enhance stickiness. At present, there is still a lot of iterative space for atomization technology, and Simor's newly released products are still upgraded around ceramic technology. In the medium and long term, we do not rule out the introduction of an atomization system of brand-new materials, which will bring stronger product competitiveness.

The new type of tobacco has the attribute of harm reduction and easy to accept taste, and the future may be the long-term evolution direction of the tobacco industry. With the improvement of laws and regulations / tax system and the cultivation of consumption habits, the industry may continue to grow rapidly. As a technology leader in the e-cigarette industry, Si Moore's "feelm" atomization core has strong product competitiveness. At present, it is deeply bound to the world's excellent e-cigarette brands, which will be accompanied by downstream customer market integration to increase its share. At the same time, benefiting from the increase in the proportion of ceramic atomization products with high profit margins, the company's net interest rate may continue to rise, we expect the net profit of Smallville 2021-2023 to be 100 million yuan, respectively, EPS is 0.88 EPS 1.08 pound 1.32 yuan, the corresponding valuation is 33pm 27x22X, continue to give the "buy" rating.

Risk hint

1. The new tobacco policy has been substantially tightened.

2. Major breakthroughs in competitor technology