According to the China Trade Remedy Information Network, on July 30, the US International Trade Commission (ITC) issued an announcement that it made 337 partial final rulings on certain oil vaporizing devices, components thereof, and products containing the same (investigation code: 337-TA-1392): based on the applicant's withdrawal, the investigation of the appeals of the fourth and twenty-first registered patents in the United States with registration number 11,766,527 was terminated.

CITIC Securities pointed out that the global new tobacco market situation from June to July 2024 is relatively positive: in June 2024, China's electronic cigarette exports continued to show improvement trend, with a year-on-year increase of +5.9% to 1 billion US dollars; HNB's core market in Japan continues to have high growth in demand, but the promotion of IQOS in the United States has been delayed until Q4 2024, and the European market has raised the consumption tax and banned the sale of flavored tobacco products, which may have an impact on demand.

Regarding traditional tobacco, in H1 2024, China's cigarette production maintained a steady growth, with a year-on-year increase of +1.6% to 1.4 trillion sticks; In June, China's cigarette exports increased significantly by +122% year-on-year, and the trend of both volume and price increase continued for tobacco leaf imports, while the average export price of tobacco leaves remained on the rise.

CITIC Securities research report pointed out that the global new tobacco market situation in May-June 2024 is relatively positive: On the one hand, the United States frequently releases bullish signals on electronic cigarettes, and on the other hand, China's electronic cigarette exports in May 2024 were 1.01 billion US dollars, with a year-on-year growth rate turning positive; HNB core markets Japan and Germany maintain rapid growth in demand. In traditional tobacco, with the recovery of outbound travel demand and the process of China National Tobacco Corporation expanding overseas markets, the export of Chinese cigarettes continues to grow at a high rate, and the import volume and export unit price of tobacco leaves both increase substantially. In 2024, the global economy faces uncertainty, and the tobacco industry reflects the characteristics of rigid demand. Given that the United States frequently releases bullish signals on electronic cigarette regulatory policies and Philip Morris International and British American Tobacco have reached a patent settlement on HNB products, it is expected that the growth expectation of the new tobacco industry in the second half of the year will improve.

Electronic cigarette-related industry chain companies:

Smoore Intl (06969): In a Hong Kong Stock Exchange announcement, the company is pleased to announce that on July 18, 2024, R.J. Reynolds Vapor Company received marketing authorization for seven new tobacco products and six closed electronic cigarette cartridges through the pre-market tobacco product application pathway. RJR Group is one of this group's clients in the United States. Based on the sales records from the beginning of this year to the date of this announcement, this group supplies these seven products to RJR Group.

China Tobacco Hong Kong (06055): China Tobacco Hong Kong Co., Ltd. is the exclusive operating entity designated by China National Tobacco Corporation to engage in international business development platforms and related trading businesses. Its "exclusive status" is rare, and it may continue to benefit from the overseas expansion and equity mergers and acquisitions of China Tobacco in the future. The company has successively launched new tobacco export business and Brazil business since 2018, and expanded cigarette export business beyond the company's exclusive operating area. From April 2024 onwards, it will cooperate with Sichuan National Tobacco to jointly promote domestically produced "Great Wall" cigars in overseas markets, and its profitability is expected to continue to grow. The company regards new tobacco products as the focus of its core strategy and will continue to invest resources to expand the market.

China Boton (03318): At present, the company has obtained eight tobacco monopoly production enterprise licenses for producing electronic cigarette oil for its own brand, producing electronic cigarettes (including OEM production of electronic cigarettes), and holding electronic cigarette brands, forming a complete industrial chain layout; combined with its own competitive advantages, it is expected to make significant progress in the direction of tobacco oil and brand overseas operation; will enter the international market through electronic cigarette products of its own brand and those customized for customers.

Huabao International (00336): The company's related products in the new tobacco sector are mainly heated non-combustion tobacco (HNB) tobacco slices and low-temperature fragrances.