Focus this week: guanyan.com released the “analysis report of China’s e-cigarette market in 2022 – market competition strategy and Development Trend Outlook”, which analyzed the competition strategy and development trend of brands in the current e-cigarette market environment; Smore, Yueke and other electronic atomization enterprises have started basic research on safety.
Chinese e-cigarette users have a higher sensitivity to the scientific and technological attributes of products, and R & D capability has become an element of industrial transformation. In 2020, the national penetration rate of American e-cigarette users was 5.5%, and that of Chinese e-cigarette users was 1.1%, while the ratio of per capita e-cigarette consumption in the United States to per capita GDP was less than 1%, while that in China was close to 2%, Therefore, the perception of Chinese e-cigarette users on the scientific and technological attributes of products is higher than that of overseas users. The future development direction of e-cigarette products will start from its technical content, and the R & D ability will become the key to affecting industrial reform and triggering the secondary growth curve.
The product matrix is the core of undertaking R & D capability, and 26-35 years old is the main group that needs to be deeply cultivated for product innovation. According to the framework of bullet exchange electronic cigarette products, in terms of heating technology, we can optimize the production process, reduce costs and increase efficiency, improve the yield and one-time pass rate of each production link, and apply new materials to innovate and integrate basic raw materials; In terms of atomization technology, automatic production can be used to improve the stability of products. At the same time, ceramic and cotton media cooperate with heating wire to improve the efficiency of oil guide and oil storage; The formula is used to improve the taste and viscosity of smoke, so as to achieve better blending effect in terms of flavor and viscosity; In terms of appearance design, we should guide the formation of user habits through senior product design, so as to form industry standards and cultivate the soft power of the company’s brand. In terms of consumer groups and tastes, according to the data of the observation and Research Report, young people aged 18-25 have high acceptance of new tastes such as fruits and desserts, users aged 36-45 have high acceptance of traditional tobacco and tea tastes, and people aged 26-35 have no obvious preference for taste changes, and their consumption ability is relatively strong, so they have sufficient funds to feel and accept new products, Become the main group for product innovation in the e-cigarette industry.
Smore, Yueke and other electronic atomization enterprises have started basic research on safety. In February 2022, the clinical research on the safety of e-cigarette initiated by Yueke relx has been successfully registered in the China Clinical Trial Registration Center (ChiCTR), a first-class organization of the international clinical trial registration platform of the World Health Organization. This is the first clinical research focusing on “the safety of e-cigarette” in China, It is also the second clinical research project initiated by Yueke. In March 2021, he successfully applied for the first clinical study of e-cigarette in China to explore the impact of the use of e-cigarette and cigarette on human biomarkers in healthy subjects. At present, the study has been successfully completed and the results will be released within the year; SIMORE, the global leader of atomization technology, has previously successfully applied for the National Natural Science Foundation project with Tongji University around the research on the harm reduction and safety of electronic smoke, becoming the first electronic atomization technology enterprise in China to obtain a national research project.
We believe that with the basic implementation of China’s e-cigarette supervision, the industry has entered the track of legalization and standardization, which will benefit China’s compliant OEM, brand and other enterprises. The “small, scattered and poor” enterprises will gradually withdraw from the market, and the industry concentration will accelerate in the future, which will benefit the upstream and downstream leading enterprises of the industry.
Investment suggestion 1) HNB industrial chain: key recommendation – Shenzhen Jinjia Group Co.Ltd(002191) (China’s leading tobacco label and the only private enterprise in strategic cooperation with Yunnan Zhongyan) [joint coverage with the light industry team]; The following suggestions are recommended: Warburg International (tobacco flavor spices, overseas business steadily expanding) [joint coverage with food and beverage team], 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 Hongkong, China Burton. 2) Atomization industry chain: key recommendation – smore International (leading global atomization equipment manufacturer), followed by fog core technology (leading Chinese atomization brand) and 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.
