The products of njoy audited PMTA are its main SKUs and ceramic cores, which release positive signals
(1) njoy ace is the main selling product of the brand. On April 27, the FDA granted njoy ace and three tobacco flavored supplementary packages under njoy a sales permit, and rejected the application for njoy flavored e-cigarette, while the mint flavor is still under review. It is worth noting that the approved product njoy ace is the main product of njoy, while the previously approved VUSE solo, logic pro, logic power and HNB products logic vapeleaf of VUSE and logic are all old products of various brands, products with relatively low sales proportion or products that have not yet been sold in the United States (to observe the market reaction and improve the follow-up standards). The approval of njoy core products may mean that FDA is fully prepared, We are optimistic that the main products of VUSE and loigc will pass the review smoothly.
(2) njoy ace became the first ceramic core approved equipment. Njoy ace is a ceramic core replacement small smoke product manufactured by SIMORE international, while the previously approved VUSE solo, logic power and logic Pro are cotton core equipment, which indicates that FDA does not object to the replacement ceramic core products based on nicotine salt and with high nicotine transmission efficiency in principle. We believe that the leading brands have complete information, sufficient preparation and high market attention. Under the condition that FDA has no objection in principle, it is only a matter of time for VUSE and logic's main ceramic core products to pass the audit.
At present, the progress of PMTA audit has reached 99%, and FDA has accumulated sufficient experience. From the sharp increase in the market share of approved products in this round and FDA's statement on products with high market share, the head products have entered the audit cycle, waiting for the main products of VUSE and logic to pass the audit, so as to accelerate the concentration of market pattern.
Njoy's market share is expected to increase, which is good for the core supplier smore international
Njoy, as one of the major players in the U.S. e-cigarette market, had a market share of about 10% in 18-19 years. However, with the ban on flavored cigarettes and the uncertainty of PMTA, the management's support for marketing weakened, resulting in the decline of its market share. According to Nielsen's retail data of convenience stores, in the four weeks ended March 26, Juul's market share was 35.7%, VUSE's was 33.9%, njoy's was 3.2% and Blu's was 2.3%. After the core product of njoy is approved by PMTA this time, we believe that the management is expected to re support its business development and substantially boost njoy's market share. As a supplier of this product, smore international is expected to benefit.
Investment advice
The progress of the United States in clearing out market miscellaneous brands through PMTA will be substantially promoted, and the industry pattern will accelerate the concentration. SIMORE international binds core brands, and the technical strength of ceramic core is leading. Under the catalysis of market pessimism, the company's valuation is at the bottom. Considering that the overseas business growth in 22 years is still good and the policy ideas in China are gradually clarified, the company, as an industry leading company with the strongest technical strength, has fully highlighted its current value and is mainly recommended.
Risk tips
The iteration of new products is less than expected, the sales volume of key customers is less than expected, and the regulatory policy is stricter.
