Event: on the afternoon of April 12, the State Administration of Market Supervision approved the compulsory national standard of electronic cigarette, which will come into force on October 1, 2022. The core contents include
\u3000\u30001. The atomization shall contain nicotine, and nicotine extracted from tobacco shall be used; 2. Electronic cigarette set and cigarette cartridge shall have closed structure to prevent artificial filling; And it has the function of preventing children from starting; 3. The atomization temperature shall not exceed 350 ° C; 4. The concentration of nicotine in the atomized material shall not be higher than 20 mg / g (2% concentration), and the total amount of nicotine shall not be higher than 200 mg; 5. There are 101 temporarily licensed substances for atomization additives, and the maximum amount is limited; Coolants and sweeteners can be added. 6. It shall not induce minors, and the characteristic flavor of the product shall not show other flavors except tobacco.
Comments:
\u3000\u30001. E-cigarette supervision boots are gradually being implemented: the implementation date of the national standard starts from October 1, 2022, when China’s e-cigarette production and sales system will officially enter the era of compliance.
\u3000\u30002. The nicotine concentration of tobacco oil refers to the EU standard: the requirements of the new EU TPD directive that came into force in 2014 on electronic cigarettes include that the nicotine concentration of tobacco oil is limited to 20 mg / ml (2%), which we believe can meet the user’s smoking experience and nicotine demand.
\u3000\u30003. It is expected that the future will be dominated by mixed tobacco flavor products with tobacco as the main flavor. The official draft is consistent with the list of permitted use and dosage of additives in the national standard (second exposure draft) on March 12. It still contains taste components such as cocoa extract, vanilla bean tincture, peppermint oil and lemon oil. We believe that mixed tobacco flavor products with tobacco as the main tone may be sold in the later stage.
\u3000\u30004 . After the atomized e-cigarette is included in the supervision, China Tobacco suppliers may speed up the layout. Previously, due to concerns about compliance, the leader of China Tobacco suppliers was only a tentative layout. We believe that subsequent Chinese tobacco suppliers may give full play to their channel advantages and enter the relevant industrial chains of atomized e-cigarettes, such as cigarette oil, atomization OEM, etc.
In conclusion, we believe that the release of the official version of the national standard defines the unified production standard of atomized e-cigarettes. The implementation of supervision will effectively push up the industry threshold, improve the concentration and benefit the leading enterprises in the upstream and downstream of the industry.
Investment suggestions: 1) China tobacco supply chain: key recommendations – Shenzhen Jinjia Group Co.Ltd(002191) (China Tobacco standard leader, active card layout, new tobacco); It is suggested to pay attention to: China Tobacco Hong Kong, Huabao international, China Bolton, Anhui Genuine New Materials Co.Ltd(603429) , Shanghai Shunho New Materials Technology Co.Ltd(002565) , Shantou Dongfeng Printing Co.Ltd(601515) . 2) Atomization industry chain: key recommendation – smore International (leading global atomization equipment manufacturer); Suggested attention: fog core technology
Risk warning: the risk of new tobacco policy changes, the risk of sales / enterprise development falling short of expectations and intensified market competition
