Core view
Zhou’s focus: Recently, there have been frequent regulatory policies on e-cigarettes. Following the issuance of the measures for the administration of e-cigarettes on March 11 and the national standard for e-cigarettes on April 8, the national tobacco administration again issued five detailed documents on the administration of e-cigarettes, including handling production licenses, wholesale and retail licenses, product technical review and QR code traceability, to further refine and implement the regulatory policies on e-cigarettes. At present, the “e-cigarette management” column has been added on the homepage of the official website of the national tobacco administration as one of the eight columns on the homepage.
Weekly review of the sector: the new tobacco sector fell 3.34% this week, losing 2.35pct and 0.88pct respectively to the Shanghai and Shenzhen 300 index and the China Securities 500 index. In terms of individual stocks, this week, fogcore technology, SIMORE international and Huabao international rose 10.16%, 6.34% and 5.41% respectively Shandong Jincheng Pharmaceutical Group Co.Ltd(300233) , Shanghai Shunho New Materials Technology Co.Ltd(002565) , Shenzhen Jinjia Group Co.Ltd(002191) decreased by 9.24%, 8.96% and 8.66% respectively.
Investment suggestion: Recently, e-cigarette policies have appeared frequently, and the regulatory rules have been gradually improved to promote the orderly and standardized development of the market. At the same time, the policy clearly gives a transition period of more than five months to ensure the smooth transition of the market, which shows the positive attitude of the regulatory authorities towards maintaining market order and promoting the benign and healthy development of the market. China’s e-cigarette industry has officially entered a new era of standardized development with rules to follow. The short-term policy window period will help the smooth transition of all links of the industry. The clearing of long-term unqualified products and production capacity will promote the concentration of market share and benefit the leading enterprises in all links such as production and brand.
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
