Vapor factory：Future expectation

Recently, a piece of good news detonated the whole e-cigarette industry. That is, on November 26, the State Council issued a decision on Amending the regulations for the implementation of the tobacco monopoly law of the people's Republic of China, adding Article 65: "e-cigarettes and other new tobacco products shall be implemented with reference to the relevant provisions of these regulations." the decision shall go into effect as of the date of promulgation. This means that e-cigarettes, which have been in the legal ambiguity zone, have been officially incorporated into the tobacco system regulation.

Previously, the e-cigarette industry has been in a gray area without clear legal provisions. From 2019 to 2020, it has entered a period of savage growth. Its expansion trend is staggering. Huge interests have also attracted a large number of talents, capital and speculators, and a large number of good and bad levels have poured into the e-cigarette market, This is also one of the main reasons for the scuffle in the e-cigarette market in 2021.

After the release of the new regulations, the tobacco sector rose sharply in the morning of November 29, leading the two cities. By the 30th, Dongfeng shares and Shaanxi Jinye had raised the limit, Zhongke information had risen by more than 16%, and Huabao shares, Jinjia shares and Jiyou shares had followed suit. The inclusion of new tobacco products such as e-cigarettes into the monopoly law first confirmed the legal and compliant production and sales status of new tobacco such as e-cigarettes in China. In addition, the meeting on the draft of the national standard for e-cigarette held in November made a preliminary discussion on the definition, additives and nicotine content of e-cigarette. It represents that the specific management measures and national standards of atomized e-cigarettes in China are accelerating. In the future, with the implementation of detailed rules and the progress of national standards, the development of the industry will be further standardized, which is conducive to the improvement of the market share of leading enterprises with a high degree of standardization. For the heating non combustion industrial chain, the implementation of the amendment will improve the market's expectations for the launch of relevant products by the national tobacco administration, and the attention of companies that have close cooperation with the national tobacco administration and companies with layout in the industrial chain will increase in the short term. In the future, it is necessary to track the launch progress of relevant products, the division of labor and order acquisition of the company in the industrial chain.

In the current situation, one of the most pessimistic expectations in the market is that e-cigarettes are monopolized like cigarettes, and the tobacco bureau sets prices and specifies sales channels, which will undoubtedly bring a major blow to the rapidly developing e-cigarette industry. But more people believe that e-cigarettes may usher in "tailor-made" supervision. Ao Weinuo stressed that "reference" in the regulations is not "according to", he said: "It can not be understood that e-cigarettes are regulated according to the way that cigarettes are monopolized by the state. I am optimistic about the policy. It is a global trend to strengthen the supervision of e-cigarettes by rule of law. We should not only respect e-cigarettes as an emerging industry based on scientific and technological innovation, but also regulate the protection of minors, quality and safety and taxation."

China is a big tobacco country. With the implementation of the supervision of atomized e-cigarettes, China's HNB products are expected to be gradually launched to continuously meet the harm reduction needs of consumers and improve the consumption experience and cigarette structure. The implementation of the supervision will effectively push up the industry threshold, improve the concentration and benefit the upstream and downstream leading enterprises in the industry.