Weekly focus: bat announced its performance in 2021. After adjustment, the revenue increased by 6.9% year-on-year to £ 25.68 billion, and the adjusted diluted EPS increased by 6.6% year-on-year to £ 2.96/share. In 2021, the revenue of new tobacco was £ 2.054 billion, a significant increase of 50.9% year-on-year, and it is expected to be profitable in 2025. After year-on-year adjustment, EPS per diluted share increased by 29.2% to GBP 2026.6 per diluted share. According to the 2022 performance guidelines of British American tobacco, it is expected that EPS will achieve high single digit growth after adjustment in 2022, and the growth rate will be faster in the second half of the year; Among them, the revenue growth of the new tobacco business is strong, and it is expected to further reduce losses.
New tobacco business: 1) cigarette in mouth: in 2021, the sales volume increased by 70.5% year-on-year, and the number of consumers increased by 40%, mainly from the U.S. market. In October 2020, after the Group acquired dryft, the sales volume of oral cigarettes in 21 years increased by 272% year-on-year to 602 million bags. At present, products containing tobacco have entered 110000 retail stores in the United States. 2) Heating without combustion: in 2021, the sales volume increased by 79% and the revenue increased by 34% year-on-year. Glo’s share in major markets such as Japan and Italy has been increasing, and the average daily consumption of consumers has increased. The brand sales volume in 2021 has increased by 79% year-on-year; Hyper’s brand influence and user conversion rate continued to improve in Japan and ENA markets. 3) Atomized smoke: 21q4vuse’s share in the United States rose to 35.9%, and obtained the PMTA license from FDA in October. In 2021, British American Tobacco sold 535 million standard units of steam electronic cigarettes (10ml tobacco oil / piece), a year-on-year increase of 56%. At the end of the 21st century, the market share in the United States reached 35.9%, leading the market in 27 states of the United States. Vusealto submitted the PMTA application one year later than vusesolo, and it is still under review.
Investment suggestion: China’s e-cigarette policy of 21q4 was accelerated. The short-term market experienced a period of policy running in. In the long run, with the normalization of supervision, the industry entered a healthy and orderly development. The upstream head OEM enterprises will benefit from the industry integration promoted by the policy, and are optimistic about the leading enterprises in the industrial chain with technology and customer accumulation to further improve the market share and profitability. At the same time, enterprises in all links of the industrial chain focusing on export business are relatively weak affected by China’s policies, and the market development space is broad. The global demand for new-type tobacco continues to grow. We are concerned about the development of policies related to new-type tobacco at home and abroad. It is suggested to pay attention to smore International (6969. HK), Shenzhen Jinjia Group Co.Ltd(002191) (002191. SZ).
Risk warning: industry regulatory policies exceed expectations; The market demand is less than expected; Intensified market competition; Technical iteration and update; Price fluctuation of raw materials; Repeated outbreaks outside China have impacted channel sales; Macroeconomic pressure.
