Research Summary | Electronic cigarette industry chain research

1, atomization industry chain: industry policy is gradually clarified, atomization is not only nicotine

(1) according to a number of media reports, 11.12 held in Shenzhen, electronic cigarette national standards for comment meeting, the industry chain more than a dozen companies attended the meeting on the definition of electronic cigarettes, additives, nicotine content and other issues to do a preliminary discussion. On behalf of the domestic atomized electronic cigarette regulatory policy is accelerating.

(2) According to grassroots research: domestic atomized e-cigarette sales since October has shown a positive trend in the ring, there are some brands in October sales data than the growth rate of September rose sharply, the industry fundamentals gradually out of the doldrums.

(3) atomization technology is not limited to nicotine applications, there are already medical atomization (inhalation vaccines), large health atomization (Chinese medicine, health products atomization), beauty atomization (mask atomization) and many other areas of research and product exploration, there are more atomization possibilities in the future.

2, HNB: Yunnan Cigarette double enjoy low-profile test sales, it is expected that more Cigarette brand test water next year

(1) First-line research shows that the "price limit" for traditional cigarettes in China has been lifted, and retail stores are now offering cigarettes for 1,200 and 1,500 yuan each. It is expected that more cigarettes above 1,000 yuan will be available next year.

(2) Currently, 17 of the 19 domestic Cigarette Industry Companies have HNB products in reserve, and the product power is constantly iterating and upgrading, Yunnan Hongta "Double Enjoyment" combustible and bakeable dual-use cigarettes have recently been visible in the channel, and the planned volume is expected to increase significantly next year. Sichuan China Tobacco "Wide and Narrow" has already landed in the Spanish market in Europe.

3) Global development trend, HNB is the focus of development of major tobacco companies! And there is a clear trend to improve the profits of tobacco companies (refer to PMI IQOS). According to the feedback from research companies, with the landing of fogging regulation, HNB is expected to accelerate the promotion of domestic pilot next year.

3, the promotion of new tobacco favorable national tax revenue

In 2020, the total profit tax paid by tobacco in China reached 1.28 trillion (+6.2%), and it is expected that China's tobacco profit tax will continue to grow in the future. The promotion of new tobacco products will have a positive contribution to the domestic tobacco profits tax.

(1) atomized electronic cigarettes: according to the 3.22 draft for comment, if the atomized electronic cigarettes with reference to the domestic traditional cigarette tax a high percentage of tobacco tax, such as levy 50-60% tax, will do some supplement and increase the existing tax base in China.

(2) HNB harm reduction products: from the existing selling price of overseas HNB harm reduction products and domestic sea trial products, the selling price of HNB products is about 30-40 RMB rmb/pack, which is 2 times of the average retail price of traditional cigarettes in China, HNB sales will have a good positive effect on the cigarette structure (average unit price) and increase the profit tax contribution.