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Electronic cigarettes are recommended to increase the retail price of more than 30 %. Who will become the biggest winner?

Electronic cigarettes are recommended to increase the retail price of more than 30 %. Who will become the biggest winner?

2022-11-03

On November 2nd, the electronic cigarette sector ushered in a wave of rebound again. Wan De Hong Kong Electronic Cigarette Index (887734.Wi) rose 15.7%. At the same time, the leading of the leader Simo International's daily limit, Wuxin technology rose by 9.6%, and Zhongyan Hong Kong, Huabao International, and Shunzheng rose by about 5%.


Earlier, on October 26, the Ministry of Finance, the General Administration of Customs, and the General Administration of Taxation issued an announcement on the consumption tax of electronic cigarettes. The electronic cigarette is included in the scope of consumption tax collection, and electronic cigarettes are added to the smoke tax. Since November 1, 2022, the electronic cigarettes have been calculated from the price rate to calculate taxes. The tax rate of the production (import) link is 36%, and the tax rate of the wholesale link is 11%.


On the news, in the early morning of November 1st, electronic cigarette retailers updated the recommended retail price, and the cigarettes and smoke bombs of brands and cigarette bullets such as carving, grapefruit, magic flute, Ono, carved rice, firearm and other brands have risen to varying degrees. Among them, the four cigarettes wholesale prices ranging from 32.83%to 95.3%, it is recommended that the retail price increase ranges from 33.52%to 97.49%.


Many institutions said that after the labels of electronic cigarette national standards, management measures, taxation plans, etc. have been introduced and implemented, the electronic cigarette industry has entered a stage of compliance and healthy development. In the future, small brands may have to accelerate the clearing of tax burdens. Head companies with products, technology and brand advantages will have a stronger bargaining power, and the industry concentration is expected to increase.


Brokerage strategy



1. Tianfeng Securities


Core point: Electronic cigarette supervision boots are completely landed, and new processes are opened for development (stronger than big markets, maintenance)


Since October 1, 2022, since the labeling of the e -cigarette country, the domestic electronic cigarette production and sales system has officially entered the era of compliance. The announcement of this tax system has further established the legal identity of electronic tobacco products. To supplement and increment.


For export electronic cigarette tax subjects, the export refund (exemption) tax policy is still applicable, to a certain extent, the state still has a positive attitude towards relevant export industry chain companies, and encourages electronic cigarette exports to create foreign exchange.


At the same time, as the supervision of domestic and foreign regulations is clear, it is expected that the threshold for high industry will be effectively promoted, the concentration will increase, and the industry will be facilitated in the industry. The industry will be expected to enter a new stage of compliance development.


Suggestions: Simo International (6969.HK), Wuxin Technology (RLX.N), Jincheng Pharmaceutical (300233), Rundu (002923), Zhongyan Hong Kong (6055.HK), Jinjia (002191), Huabao International (0336.HK), Popton (3318.HK), Jiyou (603429), Shunzheng (002565), Dongfeng (601515) (601515)




2. Soochow Securities


Core point: Electronic cigarette consumption tax is landed, and policy risks are basically clear (increase holdings, maintain)


In the short term, there is still a lot of room for iteration and improvement in the flavor of the new country.


1) In the early stage, the brand takes the audit as the primary orientation. The product taste development is more conservative and the product differentiation is low. With the increase of the SKU in the future, the taste differentiation will become one of the core competition elements. Continued to increase.


2) There are certain differences between tobacco extract and fructic flavor particles. The atomized cores suitable for fruity atomized liquid and tobacco extract are not high (related to the pore rate), which will have a certain impact on the taste; as the taste has a certain impact; with The iteration of the atomization core will be better released.


3) From the raw material side, tobacco extracts have an important impact on taste. Previously, tobacco extracts were applied less in the field of electronic tobacco, and it took time to improve the upstream industrial chain.


In the middle and long term, the concentration of the favorable concentration of electronic cigarette supervision has increased, and the core logic of the new national standard does not change the increase in electronic smoke penetration (more convenient and secure nicotine intake method). The demand for 2023H2 industry is expected to gradually repair.


Suggestions: Simo International (6969.HK), Wuxin Technology (RLX.N), Jinjia (002191), Shunzheng (002565)




3. Zhejiang Business Securities


Core viewpoint: The electronic cigarette tax collection plan is introduced, the boots landing and the development of the industry have increased (optimistic, maintenance)


The uncertain factors of the development of the electronic cigarette industry have gradually eliminated and entered formal development. From the perspective of various measures issued by the National Tobacco Monopoly Bureau and relevant departments, the healthy development of electronic cigarettes is recognized and valued, and the stability of health and compliance is. Growth is available. All


After the taxation plan is implemented, small factories and small brand companies with low scale and low yields in the industry will be cleared up because they cannot afford the tax burden. The leading shares of each link are expected to continue to increase, and orders are gradually concentrated.


At the same time, after October 1st, the management measures for electronic cigarettes took effect, and the taste smoke was banned. 2022Q4 was a period of consumption and channel digestion stocking. It is expected that 2023Q1 will become an important observation period for fruit taste to tobacco flavors.


At present, the new national standards launched by various brands still have room for improvement in taste and satisfaction, but with the manufacturer's strengthening of the development of taste, the taste of tobacco taste will also be improved; The demand for long -term support for tobacco flavors will increase.


Suggestion: Simo International (6969.HK), Wuxin Technology (RLX.N), Jinjia (002191)




4. Hua'an Securities


Core viewpoint: tax uncertainties landing, pattern or concentration, and the healthy development of the industry (increase holdings)


In terms of price system, the head brand has a certain customer base and brand precipitation, or adopts a strategy of not raising prices to obtain more owners' ordering and seize market share. Because the middle and lower reaches of the scale, because they do not have strong customers and brand power, they are insufficient or unable to support the long -term development of enterprises. Therefore, their products may have a certain price increase, and the brand business pattern may concentrate.


The tax policy introduced the uncertainty of the industry, and the impact of consumption taxes or the influence on the head foundation is less. The leading company is expected to use its R & D advantage to bring a comprehensive product force to improve the comprehensive product power, and it is expected to continue to benefit from deep binding large customers.


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