Drop your boots! Electronic cigarette concept stocks rose sharply, and electronic cigarette supervision ushered in significant progress

Drop your boots! Electronic cigarette concept stocks rose sharply, and electronic cigarette supervision ushered in significant progress

Recently, China's electronic cigarette regulation ushered in significant progress. On the evening of November 26, it was reported on the Chinese government website that in order to strengthen the supervision of new tobacco products such as electronic cigarettes, the State Council decided to amend the Regulations for the Implementation of the Tobacco Monopoly Law of the People's Republic of China and add one article as Article 65: "Electronic cigarettes and other new tobacco products shall be subject to the relevant provisions of these Regulations on cigarettes." That night, the Electronic Cigarette Industry Committee, in its WeChat official

Recently, China's electronic cigarette regulation ushered in significant progress.

On the evening of November 26, it was reported on the Chinese government website that in order to strengthen the supervision of new tobacco products such as electronic cigarettes, the State Council decided to amend the Regulations for the Implementation of the Tobacco Monopoly Law of the People's Republic of China and add one article as Article 65: "Electronic cigarettes and other new tobacco products shall be subject to the relevant provisions of these Regulations on cigarettes."

That night, the Electronic Cigarette Industry Committee publicly stated in its official WeChat public account: "We firmly support and implement the electronic cigarette regulatory policy. We hope that the new national mandatory standards for electronic cigarettes can also be issued and implemented as soon as possible, effectively regulate the production and operation of electronic cigarettes, solve the product quality and safety risks existing in electronic cigarettes, and effectively protect the legitimate rights and interests of consumers."

"The significance of this confirmation of the identity of e-cigarettes as being 'regulated' is to determine what e-cigarettes are and the jurisdiction of e-cigarettes supervision, which can be regarded as the front station for the country to conduct extensive and detailed supervision of this industry." Bernia, the founder of knowledge education technology and Qihuang business management consulting, told the Securities Daily: "In the future, there will be not only the national standard for electronic cigarettes, but also more complete regulatory rules, including production standards and sales channels."

Electronic cigarette concept stocks rose generally

"The introduction of the new regulation policy on electronic cigarettes is of great significance. This means the determination of the identity of electronic cigarettes, which is of great benefit to the industry." Chen Zhong, chief editor of Blue Hole's new consumption, told the Securities Daily: "It is mainly reflected in the following two aspects: first, the electronic cigarette industry can be done legally; second, the current market participants may not be directly eliminated, and private enterprises continue to have opportunities."

On November 26, US time, the electronic cigarette leader Zhonggai shares of Foxwick Technology rose by more than 6% after opening, then fell by more than 8%, and finally ended up 1.85%. As of the closing, the market value of Fosmin Technology was $7.4 billion.

Foggy Core Technology is the leading enterprise in the domestic closed electronic cigarette field. Founded on January 2, 2018, the company mainly engages in the R&D, design and sales of electronic atomizers of RELX Yueke brand. In 2019, the revenue was 1.549 billion yuan, with a year-on-year growth of 1068%. In the first three quarters of 2020, the revenue was 2.201 billion yuan, with a year-on-year growth of 170%.

Since November, A-share e-cigarette concept stocks have risen by 24.2% on average, far exceeding the Shanghai index over the same period. Among them, Penghui Energy, Guoguang Electric Appliance, Kerui Technology, Kersen Technology, Dianlian Technology and other stocks rose significantly; In terms of H-shares, electronic cigarette concept stocks continued to rise, with China Burton up more than 10%, Warburg International up more than 8%, China Tobacco Hong Kong up nearly 4%, and Smaller International up nearly 3%.

Some insiders in the electronic cigarette industry told the reporter: "The electronic cigarette industry has experienced an outbreak period of three years without supervision and a decade long development. During the outbreak period, the lack of supervision has indeed brought great convenience to some brands. For example, some brands have opened more than 2000 offline franchise stores within a year. Such an intensive outbreak is hard to see in any industry, but there are also many problems. Now the domestic electronic cigarette industry is relatively weak, and it is clear that The industry will develop in a healthy and orderly way only if the policy of

Investors also showed great enthusiasm for this. When the reporter browsed the interactive platform, he found that the topic of electronic cigarettes has been very hot since the last month (October 24 to November 29), with 117 questions and answers. In the first three quarters of this year, there were only 516 questions and answers on this topic, with a monthly average of 57.

After sorting out, the reporter found that most of the issues concerned by investors focused on the "progress of electronic cigarette business", "existing orders of the company" and "development of new customers" of listed companies. Among them, Kerui Technology, Yingqu Technology and other companies are highly popular.

In response to the question about "the progress of the company's electronic cigarette products and related projects", Kerui Technology said: "The company cooperates with customers in the traditional tobacco industry to develop high-speed automation equipment for heating incompletely burning tobacco. At present, some prototypes have been sent to customers."

Yingqu Technology said: "The company is the supplier of the latest generation of non combustion heating equipment for iqos. At present, it mainly provides customers with precision plastic parts for electronic cigarettes, and also strives for other cooperation opportunities for customers."

The industry looks forward to the introduction of regulatory rules

"It has always been that there is a broad market demand first, which will stimulate the vigorous rise of an industry to respond to and meet the demand of the market. The same is true of the electronic cigarette industry." Bernia told reporters.

In recent years, the scale of China's electronic cigarette market is growing rapidly. The data shows that the market size of China's electronic cigarette was 550 million yuan in 2013, and it will increase to 8.38 billion yuan in 2020, with a compound annual growth rate of 72.5% in eight years.

The above insiders told reporters: "The penetration rate of electronic cigarettes in the United States is more than 15%, that in the United Kingdom is more than 50%, while that in China is less than 1%. At the same time, young people have begun to accept electronic cigarettes as a substitute for real cigarettes, which has become a trend increasingly. In addition, there are many objective reasons, such as the rapid development of electronic cigarette technology, the increase in the popularity of salt, the promotion of atomized small cigarettes, and the entry of some excellent teams into the electronic cigarette industry."

Wind data shows that a number of listed companies related to electronic cigarettes have been investigated by institutions since this year. Compared with last year, Kerui's technology performance was eye-catching, from 26 "counter attacks" last year to 220 this year, ranking first among the number of institutional researchers for the first time. Jinjia Shares and Yingqu Technology continued the popularity of last year, with 157 research institutions and 120 research institutions, ranking second and third respectively; Dongfeng also performed well. It not only achieved "zero breakthrough", but also obtained 116 institutions for the first time.

"It is good news for the industry, but for each link of the electronic cigarette industry chain, the survival of the fittest has just begun, and the previous is only a warm-up match." Chen Zhong also said: "On the production side, the producers with higher production standards will enjoy a positive outcome. The industry has high requirements for production and technical standards, and it is easier for contract manufacturers with both capital and technical reserves to stand out; on the brand side, it is mainly depends on the relevant access mechanism, whether it is capital driven or resource driven, which needs specific analysis; on the channel side, if the channel monopoly is implemented, it means that the currently built e-cigarette channel will undergo a reshuffle, It is both a risk and an opportunity. "

Some insiders speculate that, from the perspective of the industrial chain, it is expected that electronic cigarettes will be included in the regulatory scope, including the production and processing of tobacco oil and cigarette bombs, the production and processing of cigarette sets, product circulation and sales.

Speaking of the future development of the electronic cigarette industry, Chen Zhong said: "How to tax will be the focus of the whole industry next." It is reported that cigarette tax mainly includes consumption tax, value-added tax, tobacco tax, urban construction tax and education surtax. Some insiders believe that tax may be levied on every link, including tobacco oil, appliance manufacturing, channels and distribution, but there is still a lot of uncertainty about how to levy and what proportion.