Kennede Electronics Mfg.Co.Ltd(002723) may 21 announced that the company plans to invest 22.5 million yuan of its own capital in Shaanxi Ganghua Biotechnology Co., Ltd. and hold 30% equity of the company. The core operation and management personnel of Ganghua biology made performance commitments to the company. From 2022 to 2024, the net profit after deducting non parent tax shall not be less than 4.5 million yuan, 8 million yuan and 10 million yuan respectively.
Ganghua biology is the first batch of high-purity nicotine production enterprises in China, with complete qualifications and good reputation in the industry for its quality and brand. High purity nicotine is one of the important components of electronic smog. It can also be widely used in pesticides, medicine, cosmetics and other fields. The company plans to invest in Hong Kong and China biology this time, aiming to improve and expand its own e-cigarette industry layout and business strength, and enhance its competitive advantage in the field of e-cigarette.
In November, 2021, the company completed equity investment in Baide, a well-known electronic atomized cigarette brand in China, and formally signed the “the Belt and Road” strategic cooperation framework agreement in January this year. By combining the R & D advantages of Baide electronic atomized cigarette products and electronic smog chemicals with the company’s own overseas sales channel advantages, production scale and cost advantages, the company has deeply explored the overseas electronic cigarette market. At present, the company has launched five disposable electronic cigarette models, and is expected to launch no less than 20 models this year, including but not limited to disposable electronic cigarette and cartridge changing electronic cigarette. The company is expected to give full play to the synergy effect of this investment in cigarette alkali industry and further improve the comprehensive profit of cigarette alkali industry.
According to the regulations of the State Tobacco Monopoly Administration: since October 1, 2022, electronic cigarette products without nicotine shall not be sold on the market, and nicotine extracted from tobacco, i.e. synthetic nicotine, shall not be used in electronic smog chemicals in the future.
The extraction of high-purity nicotine from tobacco by Hong Kong and China biology meets the requirements of the measures for the administration of electronic cigarettes, and its market scale will continue to increase with the compliance of China’s electronic cigarette market. Ganghua biology has submitted an application for the license of tobacco monopoly production enterprise (nicotine for electronic cigarette) to the local Provincial Tobacco Monopoly Bureau.
The company has gradually promoted the sales layout of e-cigarettes in the “the Belt and Road” countries through a network of more than 300 dealers and customers in more than 100 countries. The company plans to participate in national e-cigarette exhibitions around the world, plan national sales teams according to local conditions, and realize the fission growth of e-cigarette overseas distribution channels.
The company said that it is actively preparing the application for various e-cigarette licenses to ensure legal compliance in the production and operation of e-cigarettes in China. The company will timely capture industry opportunities, build its own brand, constantly improve the strategic layout of e-cigarette field, and further expand its industrial scale and comprehensive strength in this field. (Huang Shu)
