Event: on April 12, 2022, the mandatory national standard of electronic cigarette was officially released and will be officially implemented on October 1. On April 13, the State Administration of market supervision and administration and the state tobacco monopoly administration answered questions related to the e-cigarette policy, and determined that the transition period of the measures for the administration of e-cigarettes would end on September 30, 2022.
The standard of electronic cigarette products has been established, and the leading enterprises have the advantage of product strength. The official version of the national standard is basically consistent with the second version of the exposure draft, and some key contents include:
E-cigarette is an "electronic transmission system for generating aerosol for human suction", which is regulated whether the atomization contains nicotine or not; At the same time, "the atomization should contain nicotine" (it should be extracted from tobacco, and the concentration in the atomization should not be higher than 20mg / g), which means that zero nicotine e-cigarettes are prohibited from sale in China.
The characteristics of electronic cigarette products should not contain other flavors except tobacco. At the same time, 101 additives are allowed to be used, including some essence components. In the future, e-cigarettes may be mainly mixed flavors with tobacco flavor.
Electronic cigarette products shall have the characteristics of anti filling, anti leakage, anti child start and accidental start. It is expected that the unqualified products will be cleared.
Compared with before the implementation of the new regulations, the taste of e-cigarettes is limited or leads to the loss of some users and the slow development of new users in the short term; However, in the long run, the fundamental logic of e-cigarettes replacing cigarettes is to reduce harm, and the long-term penetration rate is expected to remain unchanged. We believe that in the future, the competitiveness of products may be mainly in the research and development of tobacco taste, the improvement of taste and the ability to reduce harm, and the leading enterprises that pay attention to product research and development are relatively dominant.
The transition period is relatively long, which is conducive to the stable adjustment of the e-cigarette industry. According to the arrangement of the transition period, no new e-cigarette production and operation enterprises, no new construction or expansion of production capacity, and no new e-cigarette retail stores shall be established during the transition period; The existing e-cigarette production and operation entities before November 10, 2021 can continue to carry out production and operation activities before September 30, 2022, and submit the application for production or retail license and the technical review of products within the specified time. Considering that the transition period is up to five months, it is expected that e-cigarette related enterprises are expected to complete product transformation and technical review in time while maintaining normal production and sales, so as to avoid being greatly impacted by production and operation interruption.
Investment suggestion: focus on smore international, the leader of e-cigarette manufacturing with leading R & D, technology and manufacturing capacity, and relevant companies that layout the industrial chain of heated cigarette (HNB).
Risk tip: there is uncertainty in the follow-up industry supporting policies, the progress of regulatory approval is less than expected, and the epidemic prevention and control affects short-term production and operation.
