The national standard for electronic cigarettes has been implemented, and the industry restructuring is in progress

On October 1, the Mandatory National Standard for Electronic Cigarettes (“National Standard” for short) will take full effect. At that time, all participants in the electronic cigarette market must operate with a license, and electronic cigarette stores can no longer continue to sell flavored electronic cigarettes such as fruit.

 

Products that meet the national standard are quietly put on the shelves

According to the provisions of the transition period of electronic cigarette supervision, October 1st this year will be the date when the “Mandatory National Standards for Electronic Cigarettes” will take full effect and the supervision of electronic cigarettes will be fully implemented. At that time, all fruit-flavored electronic cigarettes will be taken off the shelves, and the national electronic cigarette transaction will be unified. The management platform only provides national standard tobacco-flavored electronic cigarettes and smoking sets with child locks.

During the visit, the reporter noticed that products that meet the new national standard have been quietly put on the shelves. Taking RELX as an example, in terms of cigarette rods, it has launched the national standard product phantom “Xinghe Dream” atomizing rod, and in terms of pods, it has launched the phantom “Wangjiang Youjing Mountain Grill 25″ and the phantom “Forest Fuxing Mountain Grill 53″. Wait for the atomizer.

According to reports, the appearance of the national standard products has changed, except for several rows of large characters such as “Dissuade young people from smoking electronic cigarettes, prohibit primary and secondary school students from smoking electronic cigarettes” and “Our company reminds that smoking electronic cigarettes is harmful to health. Do not smoke electronic cigarettes in non-smoking places”. In addition, the biggest difference is that the cigarette rod has added a child lock function.

“In 2 seconds, the atomizer can be unlocked by quickly inserting and unplugging it 3 times in a row. Repeat the same action to lock it. In the locked state, suction, the atomizer rod will vibrate to remind that it is in the locked state, which can prevent minors from misusing it. ‘ said the shop owner.

 新闻3a

                       Electronic cigarette cartridges that meet the national standard

 

In addition to the new tips, the most important thing about the pod is to reduce the nicotine content to 2%, while the nicotine content of the fruit-flavored pods on the market is mostly 3%-5%. After trying the national standard products, some consumers said that the taste did not change much from the previous products, and some consumers said that they could not accept the tobacco flavor, “If the fruit flavor is finished, if the tobacco flavor is not easy to smoke, you may really quit smoking. already.”

 

A number of A-share listed companies have obtained certificates

 As the national standard is about to come into full effect, on the production side, the speed of “licensing” by related companies is also accelerating.

On September 20, two A-share listed companies successively announced the latest news on e-cigarette-related business. The subsidiary of Xiaosong Co., Ltd. obtained the “Tobacco Monopoly Manufacturing Enterprise License” (electronic cigarette processing enterprise); Aipu shares plans to use cash Holding a licensed enterprise by means of capital increase, so as to cut into the electronic cigarette industry.

According to incomplete statistics, there are at least 7 A-share listed companies that have obtained licenses for tobacco monopoly production enterprises, including BYD, Jinjia, Shunhao, Dongfeng, Xiaosong, Jinlong Electromechanical, and Jincheng Medicine. Production, sales, import and export of electronic cigarettes.

As for China’s largest electronic vaping equipment manufacturer Smol International, which is listed on the Hong Kong stock market, and Fog Core Technology, the parent company of the RELX brand in the US stock market, it has also been “certified” 

It’s important to note that getting a license may just be a fresh start. The new national standard has more clear and strict restrictions on product taste, additives, and design, which leads to narrowing the difference between products. Among homogeneous products, how to stand out has become the next problem for e-cigarette companies.

 

Institutions are still optimistic about the benefits of leading companies

For the electronic cigarette market after the new national standard, some industry insiders have previously judged that it is inevitable for the electronic cigarette industry to return to the original flavor of tobacco. After the ban on flavored cigarettes, the attractiveness of electronic cigarettes to adult users will inevitably decrease, which may cause the retail sales of electronic cigarettes to decline by 60%. %-90%, and shipments fell by more than 50%-70%. But at the same time, some institutions are optimistic that the restructuring of the industry structure will have a positive impact on leading brands.

新闻3b

                                Some e-cigarette stores have closed

 

The Galaxy Securities Research Report believes that the policy will raise the threshold of e-cigarettes, and the industry will focus on the head. The policy directly stipulates the relevant parameter standards of electronic cigarette products, increases the difficulty of product development and production, and eliminates backward enterprises; on the other hand, the policy restricts the experience of using electronic cigarettes to a certain extent through taste, nicotine content, and release amount. Under the restrictions of policy standards, improving the user experience as much as possible depends on whether the enterprise has sufficient R&D technical strength.

 

At the same time, the policy has raised the barriers to entry of the industry, and relevant enterprises engaging in the e-cigarette business must report to the tobacco monopoly administrative department for approval. With the electronic cigarette industry entering the stage of standardized development, the domestic market is expected to expand steadily, and under the background of increasing industry concentration, leading companies will fully benefit.

 

Caitong Securities believes that e-cigarettes are based on the role of harm reduction, and in the long run, the development trend of market demand is clear. Supervision is beneficial to the increase in the share of advantageous enterprises in various industrial links, and encourages industrial technological innovation and digital development. In the future, leading enterprises have a broad space for development in domestic and overseas markets. With the increase in R&D investment and product iterative upgrades, it will further consolidate corporate competition barriers and improve profitability.


Post time: Oct-08-2022