E-cigarettes are planned to be included in tobacco control. How much impact will it have on lithium-ion batteries?

by:CTECHi     2021-07-29

Although Shenzhen is currently only piloting as a vanguard, if it is piloted in large cities across the country, it will have a certain impact on the e-cigarette market and incidentally affect the upstream sales of lithium batteries.

With the stricter control of traditional cigarettes and the development of the electronic cigarette industry, the replacement of traditional cigarettes by electronic cigarettes has become a trend, but it has also become a trend for young people.

In response to this problem, the Standing Committee of the Shenzhen Municipal People’s Congress published on its website the 'Regulations on Smoking Control in Shenzhen Special Economic Zone (Revised Draft for Comments)Upgrade again and include e-cigarettes in the scope of tobacco control.

It is reported that the Shenzhen Special Economic Zone Regulations on Smoking Control (Revised Draft for Comment) contains the following announcements for public comments.

1. Clearly include e-cigarettes in Shenzhen’s “blacklist” for tobacco control.

2. The business premises are punished in different stages, warnings and direct fines. The fines range from the lowest 3,000 yuan to 30,000 yuan.

3. The scope of non-smoking places is expanded, and the entrances and exits of buses and subways are also included in the scope of non-smoking.

4. Cigarettes are not allowed to be sold within 100 meters of the school. Violators will be fined 30,000 yuan.

5. Personal punishment is more direct. As long as you smoke in non-smoking places, law enforcement officers can impose fines ranging from RMB 50 to RMB 500 according to the degree of cooperation.

The impact on the e-cigarette market?

What impact will the inclusion of e-cigarettes in the scope of tobacco control have on e-cigarettes?

Look at a set of data first. According to the '2017 World Tobacco Development Report35 million, sales of approximately 12 billion U.S. dollars, and sales of heated tobacco products approximately 5 billion U.S. dollars. Guangzheng Hang Seng predicts that the e-cigarette industry will continue to grow, and the e-cigarette market will exceed US$47 billion in 2025, with a compound growth rate of 20.78%.

2012-2017 domestic e-cigarette sales:

Source: 2017 World Tobacco Report, Oriental Fortune Securities Research Institute

Such a high industry growth rate has brought huge profits to leading companies in the industry. Not long ago, Shenzhen McWell Co., Ltd. announced the implementation of its third quarter of 2018 equity distribution announcement. The announcement showed that McWell used the company's current total share capital of 63,300,000 shares as the base and distributed 80.405 for every 10 shares to all shareholders. Yuan Renminbi in cash. That is, the dividend per share is 8.0405 yuan, which is higher than that of financial products such as bonds, currency funds, and bank time deposits. Moreover, this is the third quarter of 2018. As soon as the news came out, the market boiled over. According to industry analysts, from the perspective of the dividend plan, Mcwell investors can earn as much as an IPO company.

In addition, according to public information, Yiwei Lithium Energy, the second largest shareholder, holds 23.69 million shares. In this equity distribution, it will receive 190 million yuan in red envelopes.

Mcwells is a scientific and technological innovation company specializing in the development, production and sales of electronic atomizers and open electronic atomization equipment APV. It has developed into the world's largest One of the Ru0026D and production enterprises of electronic atomization equipment. The company's current business includes ODM and its own brand APV. As a private technological innovation enterprise engaged in the research and development, production and sales of electronic cigarettes, it mainly provides marketable electronic cigarettes for large-scale tobacco companies and brand operators in Europe and the United States.

Incorporating electronic cigarettes into the scope of tobacco control can imagine the sales volume of electronic cigarettes with reference to the traditional cigarette market.

What is the impact on lithium-ion batteries?

The work of e-cigarettes is inseparable from battery power supply. With the increase of e-cigarette users, the demand for batteries of different models and specifications has gradually increased. Currently, the commonly used e-cigarette battery models are 18350, 18650, 26650, 20700, etc. The most commonly used battery model is the 18650 battery, and the number of devices using the 20700 battery is also increasing. Usually we turn a battery with high discharge capacity and high power into a power battery. Using a power battery in an electronic cigarette device can allow the device to reach the set output power and obtain a better use effect. Therefore, market segments such as e-cigarettes have also become a destination for lithium batteries with overcapacity.

Although Shenzhen is currently only as a pioneer in the pilot, if it is piloted in large cities across the country, it will have a certain impact on the e-cigarette market, and incidentally affect the upstream lithium battery. In this regard, What do you think?

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