Core view
Weekly focus: 1) FDA announced that it would issue a marketing refusal order (MDO) to some products of myblu. On April 8, FDA announced that it had issued a marketing refusal order to a number of products under imperial brands myblu. The FDA said in a statement that the reasons for the rejection included the lack of “sufficient evidence on design features, manufacturing and stability” of myblu’s application, which would do more harm than good. 2) The market share gap between VUSE and Juul was further narrowed. According to Nielsen data, in the four weeks ended March 26, VUSE’s U.S. market share reached 33.9%, up 0.2pct from February; Juul’s market share was 35.7%, down 1.5pct from February, and the difference in market share between the two brands further narrowed. Affected by the “taste ban” and the contraction of brand strategy, Juul’s share in the United States has continued to decline in recent years, and VUSE’s share has increased steadily.
Review of the weekly performance of the sector: the new tobacco sector fell 4.61% this week, outperforming the Shanghai and Shenzhen 300 index and the China Securities 500 index by 3.55pct and 2.41pct respectively. In terms of individual stocks, Shantou Dongfeng Printing Co.Ltd(601515) , fogcore technology rose 5.22% and 1.08% respectively this week Zhuhai Rundu Pharmaceutical Co.Ltd(002923) , Smallworld international and Shanghai Shunho New Materials Technology Co.Ltd(002565) decreased by 9.47%, 8.92% and 8.40% respectively.
Investment suggestion: with the official entry into force of the e-cigarette regulatory policy next month, the prohibition of flavored cigarettes may impact the market demand in the short term. In the long term, China supports the technological innovation of e-cigarette enterprises and encourages the development of industrial exports. Under the general trend of the development of harm reducing tobacco in the world, the market growth space is broad. It is suggested to pay attention to the leading enterprises in the industry in terms of process technology, production scale, organization and management and customer cooperation, such as smore International (6969. HK) and Shenzhen Jinjia Group Co.Ltd(002191) ( Shenzhen Jinjia Group Co.Ltd(002191) . SZ) with significant first mover advantage and new-type tobacco full supply chain layout.
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.
