Wonderful Q & A session (Q & A look in advance)

Q: The sales volume of domestic electronic cigarettes?

A: In October, the sales volume of electronic cigarettes fell 90%compared to September, and the sales volume fell 10%month -on -month. It was very popular and rampant. On February 8, the state requested a special rectification. Judgment will increase by 10%on the basis of January in February, and slowly pick up. The annual review of the relevant retail license is about starting in May, and the channels may increase. A total of 1,100 certificates in Shenzhen have been applied for, and 550 have been applied, and then declined to 500 copies. Recently, it has risen to 600. The current rise will continue.

Q: Can the current electronic cigarette regulatory policy achieve the ideal effect?

A: It is recommended that the electronic cigarette mixed industry is conducive to the common development of a number of business, but it is considered that the pace of this policy is too small. As for why the strong policy has not yet come out, because I hope that some of the 44 companies with small size will withdraw from the industry and leave some powerful electronic cigarette companies, which will help the healthy development of the industry.

Q: Where is the barriers of electronic cigarette production?

A: Electronic cigarette production port, many consumer electronics companies were involved in the industry at the beginning, but found that it may not be done well. The biggest problem with electronic cigarettes is that there is corrosion between smoke oil and each component, and soft silicon glue will harden when it encounters oil. Therefore, in the heart of ceramics, the state of oil leakage is more common, but Chinese consumers cannot accept oil leakage. This is the barriers. However, from the perspective of pure processing, the barriers are not too high.

A company uses three -color injection technology, which is the most advanced among the processing companies currently seen. The machine spent more than 10 million developed by itself, but because it has no license, it has no way to produce. This technology has been sampled many times, and it is indeed the accumulation of technology in the field of injection and jet.

The following is the relevant content of the meeting:

The development of electronic cigarettes can be divided into the following stage.

l the first stage: 2002-2012, the electronic cigarette area was in the early stage of education, hoping to promote the power of electronic cigarettes among private enterprises.

l The second stage: 2013-2022, electronic cigarettes gradually matured and developed.

In the next decade of 2023, we call it the new year. The new year refers to the development of electronic cigarettes to this point, facing the regulatory conditions at home and abroad, how to go better in a standardized field.

1. Overview of electronic cigarette supervision

1. International Supervision Overview

From the perspective of foreign countries, the review of electronic cigarettes in the FDA in the United States was first from August 8, 16th, and it has not yet been completed. It is expected that the review will be completed by the end of this year. Because the censorship is not completed, its law enforcement intensity is weak. The authentication of TPD (TOCCOPRODUCTS DIRECTIVE) is relatively loose until the EU to this day to this day. A standardized electronic cigarette company's TPD certification is relatively easy, and it can be passed for almost 3-6 months.

ELF BAR, which has recently been detected by ELF Bar, who has recently been detected by ELF BAR, which is a miracle company (non -listed company, last year's sales revenue exceeded 20 billion), which has been detected in the UK, and all of them have been removed, which has a huge impact on the company. The British Empire Tobacco made opinions from the government (Empire Tobacco Blue was originally a mainstream brand in the British market and was recently overtaken by Chinese brands). In addition to the United Kingdom, the United States has objections to ELFBAR and has been handed over to the FDA on February 8 to seek public voting, causing a major blow to one -time smoke.

Internationally, the US FDA has authorized only 23 authorizations to this day (it will only deal with the original 6.7 million items to be applied at the end of this year). Europe has now begun to restrict taste.

2. Overview of domestic supervision

Since last year, the management measures, standards, and consumption taxes of electronic cigarettes have been introduced one after another. On September 30th, the license and certification of the existing electronic cigarette companies were basically over, and the last month increased by only one month. But to this day, there is still a new way that it has not been introduced (there are some forms that have not been perfected, and it should come out next week): For the newly -made incremental electronic cigarette enterprises (such as Xiaodong, Eapa spice, etc.), How to apply for a license permit and license license license current position has not yet been very clear and specific.

l Regarding consumption tax, the consumption tax rate of tobacco is 56%and 36%. The suggestion of judging the consumption tax rate of electronic cigarettes may be 36%.

l About the heating of everyone's attention is not burning. So far, I have not seen the heating in this year's plan and not burning. Basically, as a pilot next year, the promotion of small batches without burning may begin. In the later years, heating does not burn out of the Chinese market.

L's tax on Nicotine's core raw materials has not been said so far. The price differences between Nicotine and International Nicotine are relatively large. China Nicotine's platform price is now 2,500 yuan/kg, and it is basically internationally internationally at 120-130 US dollars/kg, which is almost doubled. Therefore, the possibility of launching core raw materials in the short term is also relatively small.

Under regulatory supervision, e -cigarette management platform will be entered after September 30 for transactions. Here are the regulatory cases in recent days. In fact, there are a lot of large cases. So far, 800 million cases are involved, and about 3 billion are involved, and there are more than a dozen millions of millions. The number of overall cases has more than 5,000 cases.

There are a lot of milk cups in my circle of friends. Basically, people who have lost contact every day shows that the blow is very strong. However, after the crackdown, it will have a certain promotion effect on the national standard tobacco. The national standard smoke is not very good now. On the one hand, it is impacted by the taste smoke, and on the other hand, the taste of the current national bid smoke is really unsatisfactory. Yesterday, I happened to get the new (mung bean) flavor electronic cigarette, which is about to go to the Shenzhen market to go public -the bean flavor is more prominent, and the taste of mung bean. Those who have smoked electronic cigarettes can also be accepted. This also shows that from now, under the standard of the National standard 101, the original taste will gradually improve, and slowly allowing some consumer groups to continue to accept electronic cigarettes.

At present, 613 domestic licenses have obtained permits, and in fact, processing companies are 500; terminal retail cards are actually less than 60,000. In the past half of the year, the stores have been closed rapidly.

2. Industry overview

1. Electronic cigarette structure: including battery, atomization core and smoke oil

Atomicization core: Moistic core, such as Simo's Feelm, Ccell has caused a method of lid in the revolution. Later, on the one -time cigarette, through the use of the net core, the number of e -cigarettes increased a lot.

Tobacco oil: Domestic is the mainstream of tobacco flavors; internationally changes from a single taste to a composite flavor. For various fruits, plus nicotine (from nicotine's free peptide to nicotine salt), in 20 mg/ml or 20 mg of 20 mg In the case of /g, the use of activation.

China ’s own tobacco oil is still technically behind the large international companies. The earliest e -liquids include American oil, European oil and horse oil. Later, Chinese tobacco companies improved from the cost and formula, and most of the e -liquids were provided by the Chinese.

2. Electronic cigarette industry chain

The design and manufacturing are basically OEM, ODM. Some also began to engage in brands, such as Yue Ke, Grapefruit, and ELF BAR, and optimized the face value through design work. In terms of downstream terminal sales, China began to ban online on November 1, 19, but China still has three platforms for online promotion: Dunhuang, China Manufacturing and Global Resource Network. As long as the CBD appliances are not available, they can still be sold through cross -border e -commerce, and some spare parts can be paved through offline retail stores through offline agent retail stores.

There are nearly 100,000 service companies around all industrial supply chains. Some small battery factories basically provide professional services for electronic cigarettes or new tobacco. The overall industry has developed to be huge today, with nearly 3 million e -cigarette practitioners. 93%of patents are in atomization, in the hands of Chinese companies.

Solid -state cigarettes were classified as heating cigarettes to No. 61, so China's solid -state e -cigarettes have pressed the suspension key since last year. All production capacity, factories and technologies must be moved overseas, or they are not engaged in work. Starting from the end of February, there have been solid -state e -cigarettes overseas. For example, Dongfeng is expected to be put into production at the end of February (it may be extended and began in early March). Jinjia began to be put into production in April. Solid -state cigarettes will be moved to four places: Laos, Malay, Indonesia, and Tuckerchitan. There is basically no solid electronic cigarette category in China.

3. Overview of global electronic cigarette consumption

Electronic cigarettes are rare categories that continue, stable, and rapidly growing in the epidemic. The global electronic cigarette market is expected to maintain a growth rate of 35%, and the total scale will exceed US $ 108 billion, of which the US market has a high growth rate.

1. Overview of electronic cigarette exit

In 2020, the export scale of Chinese electronic cigarettes was more than 40 billion yuan, and more than 138 billion yuan in 21 years. By the beginning of 22, it was initially calculated 180 billion yuan, a growth rate of 30%. However, the electronic cigarette industry structure has changed a lot. At present, all electronic cigarette companies are still expanding and working overtime, and there will be no major problems in an increase of 20%.

Export brand companies have reached 1,500, and only 613 were regulated last year, accounting for 90%of the overall production capacity.

There are two types of companies that do not get licenses. One is purely trade. This time, the injury is seriously injured; the other is a CBD appliance, and there are very few certificates. Help some licensed companies do the front -end work.

2. Electronic cigarette exit structure

L's one -time electronic cigarette increased by 158% last year, the largest category of growth last year, and the proportion in the United States has reached 65%.

L replaced e -cigarettes increased by 4%last year because it was squeezed. The replacement of bombs was first in the United States. Later, due to the drive of Chinese brands, the e -cigarettes could be developed rapidly. But after entering the national standard road last year, the replacement bomb was also affected. The replacement bomb began in the second half of last year in Southeast Asia.

Britain is the most friendly area for electronic cigarettes and the largest market in the European Union. Its consumer group is 4.3 million, reaching 22%of the smokers; tastes mainly include fruits, drinks, desserts, candy and nuts, and some composite flavors. A total of 71 flavors of the fruit account for 31 flavors, of which, of which 20 mg Nicotine+ 600 is the mainstream. In the entire EU market, the proportion of mainstream products that can meet TBD certification 20mg+600 ports is 80%.

The top European market brands are ELF BAR, Elux Bar, Geekbar, and Lost Bar, etc., and IQ markets are equivalent to king in the European market. When the entire EU market is transformed into open cigarettes to closed cigarettes and small cigarettes, whoever can seize such a transition period can run faster. Today, it is precisely the transition period of Epilittia and Kikina, which has caused their huge growth.

If I am a whole, the company's overall sales revenue last year was nearly 30 billion yuan. Avipus had achieved the top three in the open type. Later, due to the open decline, he fell behind, but in the past two years, he seized the opportunity tightly and entered the top ten brands of sales. Therefore, in each transformation, how to seize the opportunity, the company can get more rapid development.

In addition to the mainstream market, some small and medium -sized enterprises have begun to involve surrounding emerging markets (Southeast Asia, Brazil, Middle East, Africa, etc.). Brazil is prohibited from selling electronic cigarettes, but the use of electronic cigarettes is allowed. The population of Brazil's elimination of electronic cigarettes has reached more than 4 million, with 2.2 million people who often smoke, and the entire sales revenue has reached nearly 20 billion yuan. Electronic cigarettes enter Russia from Europe and the United States, enter Southeast Asia, and enter the Middle East, and now penetrate South America and Africa. This year or next year, electronic cigarettes will have about 20%of the compound annual growth rate. This is a promotion of emerging markets to promote Essence Therefore, as long as companies investing in this business, if they can grasp the emerging market tightly, they will also get a fast return.

3. Changes in consumption trends

Since 1999, everyone has used nicotine products, but now consumers are not only used to use nicotine products, but CBD products are also considerable. The market growth in the United States is relying on CBD appliances, and CBD must be grasped tightly in the United States. In the US market, Shi Kai and Zhuoli Neng are regarded as the middle and upper -layer brands in the CBD, and the sales volume is relatively large.

The penetration rate of electronic cigarettes is close to 30 % in Europe and the United States, and other European countries are also rapidly increasing. But 30%is an important hurdle. It is difficult to grow rapidly, so it must be expanded to expand the new market.

Especially in the United States, there are many new frequencies, such as nicotine bags. So far, the United States is still the largest electronic cigarette consumer consumer (including CBD appliances). There are now a bunch of people in the United States that are planting poisonous mushrooms, which are common. The United States is mainly one -time, and many factories produce disposable electronic cigarettes in Southeast Asian factories and enter the EU market.

The Middle East is now dominated by one -time, but the open type still has a market, unlike China's open markets. Because China has no illegal openings in the early days, the market is basically not large. However, in the Middle East, due to the habit of smoking smoke, the acceptance of open type is high. In terms of age distribution, electronic cigarette consumers are mainly under 45 years of age. The younger the younger acceptance, the higher the acceptance of more than 80%.

4. Sales channel

Overseas retail formats have always been mainly retail stores, and now as long as they bring smoke in Amazon, they are not allowed to sell. But some places like Asia can still be sold through the Internet. There are three platforms in China that are still making electronic cigarettes, so there are a lot of people who want to know overseas through the platform overseas. FMCG channels are becoming the main retail form of electronic cigarettes.

The proportion of new Tobacco's income in the five major tobacco companies has increased rapidly, and the proportion of new tobacco international tobacco in Philipo has risen rapidly from 29%last year to 32.1%. Due to the Russian and Ukraine War, tobacco companies have begun to withdraw from the Russian market one after another. British and American tobacco and tobacco of tobacco have completely withdrawn. On the one hand, Philimo International has built factories in Tuckeristan, and on the other hand, it is claimed to launch the Russian market. However, the Russian market is indeed huge (unable to give up). In June this year, the Tagikistan factory in Philip International was put into production. IQOS products were also launched in the Philippines. In 25 years, Philip no longer sold burning tobacco in Japan. Domestic brands are now 45. We often talk about 1+ 44, one is the absolute king, and the other forty -four are fighting in the remaining share below.

The taste is mainly tobacco flavors, and now there are signs of looseness. The total quota of the retail license is more than 56,000, but in fact it is about 50%.

In terms of channels, will two certificates be united in the future? Yes, this channel has begun to loosen. Commercial companies (its electronic cigarette stores) on multiple regions have added e -cigarette retail operations. On the Chinese trading platform, the change of bullet is absolutely mainstream. Shenzhen currently has 28 brands on a unified trading platform. Beijing ranked second, 21 (1 retreat 1, the last elimination system). Because most brands are in Shenzhen, Shenzhen is relatively open, but control on SKU (such as Yue Ke, Shenzhen thinks its SKU is too high, so I guess it will drop a SKU). There are only 6 brands on the market in Hebei. Among them, Guangdong is more open, open brands and SKUs on the shelves. Tobacco companies in various places have different attitudes towards electronic cigarettes, so the number of brands on the market and the shelves are different. With the understanding of electronic cigarettes in China, the sales channels will gradually improve.

Fourth, opportunities and challenges

1) Supervision. The core of the new year is supervision. From this year's mature markets, tobacco flavors will be used as the mainstream. In the future, the United States and Europe and the United States will not be able to judge whether the taste of mint will be prohibited. By the last time, two mint flavors have been rejected.

2) Technology. The Yuanyuan Electronic Cigarette (new products without central columns) have caused huge sensation in the Naswesa market, so products, technology, and product power can win some of the saying rights in the market as a whole.

3) One -time. One -time will become the mainstream of Europe and the United States for a while. Because the Chinese are not big about some complex categories, consumers in Europe and the United States are basically not very good about the complex use, such as changes in some airway/switching and mixing of two flavors (this category has never been sold in Europe and the United States, it has never been sold in Europe and the United States. I moved because it was too complicated). There is also a hot core style in China for a period of time (at that time this category was processed in BYD, so BYD Electronics also had a better wave after the category was listed). Domestic people were acceptable, but Europe and the United States also accepted it in Europe and the United States. Can't. It is more convenient to draw in the mouth at one time, which is more convenient.

Investors on the industrial chain are paying special attention to heating cigarettes. Many companies involve some materials production in heating cigarettes. Heating cigarettes are now in the rapid development stage, and some domestic herbal cigarettes are currently in the rapid expansion stage. Now all production capacity cannot meet the demand. Each family may establish a branch factory elsewhere before the end of December. Judging from the trend of heating cigarettes, as long as China starts to launch the development of heating cigarettes, it will become the fastest growth category. Naturally, it will definitely benefit from companies related to heating cigarettes.

From the perspective of investment, the most pure companies in electronic cigarettes are two, one brand, one manufacturing. So there are too few investment targets. Many of the companies that can be stained with electronic cigarettes and new tobacco are companies in the tobacco industry chain. Because the management measures for electronic cigarettes have made many regulations on business (listing and exit) in this area, investment targets in this field are indeed limited, but I probably mentioned in 21 years. I also had a lot of attention to electronic cigarettes at the time. As you mentioned to them, I can pay attention to the technical upgrade of electronic cigarettes, that is, manufacturing. From 21 to 22, electronic cigarette manufacturing has indeed made great progress in automation equipment manufacturing. Especially nowadays, electronic cigarettes require tax tickets (large quantity) and pay taxes overseas. In this regard, it can be followed.