Attention this week: on February 10, PMI released its annual report for 2021: the shipment volume of heated non combustible products reached 95 billion in 2021, accounting for 29.1% of revenue.
The company shipped 95 billion iqos cigarette bombs in 2021, with a year-on-year increase of 24.8%, of which 25.397 billion were shipped in 21q4, with a year-on-year increase of 17%; In terms of sales proportion, iqos cigarette cartridges have accounted for 13.2% of the company's total shipments (including traditional cigarettes) (a year-on-year increase of 2.4pct); From the revenue side, the harm reduction products sector contributed US $9.115 billion to the company in 2021, accounting for 29% of the revenue (a year-on-year increase of 5.23 PCT), continuing to reach the highest level in history, of which 21q4 contributed US $2.391 billion to the company, accounting for 30.7%; The total sales revenue of qosih2 was about $2.6 billion, which was mainly driven by the successful launch of qosih2 equipment, which reduced the sales revenue of qosih2 equipment by about $2.6 billion.
By the end of 2021, the number of iqos users has reached 21.2 million, an increase of 3.92% month on month, of which the number of users who have completely transformed into iqos consumption (i.e. stop using traditional cigarettes) has reached 15.3 million (72% retention rate); In 2021, the comprehensive market share of iqos cigarette bombs in the global promoted markets (except the United States and foreign countries) reached 6.8%, with a year-on-year increase of 1.2pct. At present, iqos has been listed and sold in 71 countries and regions around the world. Specific to different regions:
EU: by the end of 2021, the pop-up volume of heating non combustion smoke had reached 28.208 billion, a year-on-year increase of + 42.2%; The average market share of 2021q4 heated non combustible smoke bombs in the EU was 6.4%, with a year-on-year increase of + 1.4pct. In addition, the sales volume of Q4 retail increased by 7.1% month on month.
Japan: by the end of 2021, the pop-up volume of heating non combustion smoke was 33.1 billion, a year-on-year increase of 14.5%; Benefiting from the launch of iqosiluma, the market share of 2021q4iqos cigarette bombs in Japan reached 21.8%, with a year-on-year increase of + 1.7pct; In addition, the 2021q4 heating non combustion category accounts for 31% of the Japanese tobacco market.
South Korea: by the end of 2021, the pop-up volume of heating non combustion smoke was 4.7 billion, a year-on-year increase of 1.4%; In 2021q4, the share of iqos smoke bombs in South Korea was 6.8%, with a year-on-year increase of + 0.1pct.
Russia: by the end of 2021, the pop-up volume of heating non combustion smoke was 16.3 billion, with a year-on-year increase of 20%, continuing the high growth trend. Among them, 2021q4iqos smoke bombs accounted for 8% of the national market, with a year-on-year increase of 0.8pct.
In terms of iqosiluma, in the Japanese market, since the launch of the product in August last year, more than 20% of the user group has realized product switching, and more than 20% of the sales target is new users. The advantages of high-quality user experience, stronger reliability and no cleaning have significantly improved the user conversion rate, retention rate and promotion score. Terea cigarette bomb has also become the fastest-growing product in Japan's smoke-free category; In the Swiss market, more than 1 / 3 of iqosiluma products are sold to new users. Terea smoke bombs account for 1 / 3 of the company's sales of heating non combustion smoke bombs within two months after their launch, driving the company's market share of heating non combustion products in Switzerland to increase from 6% in September last year to 8% in December.
Investment proposal 1) HNB industry chain: the key recommendation - Shenzhen Jinjia Group Co.Ltd(002191) (China Tobacco standard leader, the only strategic cooperative private enterprise with Yunnan tobacco) [joint coverage with light industry team], Warburg International (tobacco flavor spice, overseas business steady expansion) [with food and beverage team]. It is suggested to pay attention to: Anhui Genuine New Materials Co.Ltd(603429) , Shanghai Shunho New Materials Technology Co.Ltd(002565) , Shantou Dongfeng Printing Co.Ltd(601515) [light industry team coverage], China Tobacco Hong Kong and Bolton, China. 2) Atomization industry chain: key recommendation - smore International (leading global atomization equipment manufacturer), followed by fog core technology (leading Chinese atomization brand), Shenzhen Aisidi Co.Ltd(002416) (leading Chinese atomization channel). Risk tip: the risk of new tobacco policy changes, the risk of sales / enterprise development falling short of expectations and intensified market competition.
