Imperial Brands is on track to meet its full-year goals. The expectation is bolstered by strong sales of e-cigarettes and heated tobacco in Europe, the company said on Tuesday, boosting its shares to a more than two-year high.
Investors seem “relieved that the firm is on track to hit its full year guidance figures, as it proceeds in its five year strategy to shift to tobacco alternatives,” Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, told Reuters.
After years of slow growth and market share losses, Imperial CEO Stefan Bomhard laid out a turnaround plan in 2021 focused on its five top markets and expanding next-generation products (NGP) deemed less harmful to health. Together, the United States, Britain, Germany, Spain and Australia account for over 70 percent of Imperial’s revenue.
Sales of Imperial’s next generation brands, which include Pulze heated tobacco and blu e-cigarettes, were up 8.7 percent to 101 million pounds ($126 million), driven by demand in Europe. In November, the company reported a more than 50% reduction in losses in the business.
Shenzhen-based Aspire Global has applied to U.S. regulators to withdraw its New York Stock Exchange (NYSE) listing application. The move comes as Beijing clamps down on the growth of vaping companies, mandating pre-approval for IPOs and restricting foreign investment.
The company filed a withdrawal request to the Securities and Exchange Commission on Monday, without providing a reason for the decision in its filing, according to the South China Morning Post. It had originally planned to sell 15 million shares at $7 to $9 each, and had applied to trade on the Nasdaq exchange under the ticker “ASPG.”
Aspire kicked off its Nasdaq listing application last June, and updated its draft prospectus in January this year. The company was expected to raise $135 million. Its withdrawal comes as recent rules introduced in China make expansion and distribution more challenging for e-cigarette manufacturers.
Other rules introduced last month include a ban on foreign investors in a sector that once attracted venture capital giants such as Sequoia Capital and IDG. Manufacturers and retailers must also get a license before they can produce and market their products. The government banned online advertising in late 2019, and sales in shops are restricted.
Over half of Aspire Global’s sales in 2021 were generated from Europe, with China and the U.S. accounting for 18.5 percent and 10 percent respectively, according to the company’s draft prospectus. In the U.S., Aspire has been marketing its cannabis vaping product, Ispire, since late 2020. “Our strategy is … directed at increasing our e-cigarette vaporizer technology products and developing our cannabis vaporizer technology products,” the company stated in its draft prospectus.
The China-based vaping technology manufacturer Smoore International announced its financial results for 2021. The company reported 2021 annual revenues of RMB13.75 billion ($2.16 billion), representing a year-on-year increase of approximately 37.4 percent.
The company credited it’s FEELM atomization company and its innovative vaping solutions for its growing success. “The driving force of the atomization industry is technological innovations, which brings fundamental breakthroughs in product safety and flavor reproduction”, said Smoore Board Chairman, Chen Zhiping.
Smoore’s Chairman and CEO Chen Zhiping
In a press release sent to Vapor Voice, Smoore also pledged to achieve carbon neutrality in its direct and indirect production and operational activities by 2050. Smoore is the first atomization technology company to announce a roadmap to carbon neutrality.
“In 2021, the global regulations on the electronic atomization industry have become more stringent, and many countries set higher safety standards for electronic atomization products while Smoore has still maintained its position as the world’s largest manufacturer of vaping devices,” the release states.
According to Frost and Sullivan report, the Smoore’s market share in the global vaping devices manufacturing market has increased to approximately 22.8 percent in 2021 from approximately 18.9 percent in 2020.
With its technological advantages in atomization, Smoore has continued to empower its global corporate clients, according to the release. Revenue from corporate client oriented sales exceeded RMB10 billion and reached RMB12.59 billion for the first time in the company’s history. The increase represents growth of 37.4 percent year-on-year, with overseas revenue accounting for over 70 percent of its corporate client oriented sales.
“It is largely attributed to the company’s flagship closed system vaping tech brand FEELM, which has been widely recognized by leading vaping brands around the world,” the release states. “To date, vaping devices loaded with FEELM atomizer have been exported to 50 countries in Europe, America, East Asia, Africa, and Oceania, with its accumulated sales volume surpassing 3 billion pieces.”
Year in review
In 2021, SMOORE continued to strengthen its R&D investment. The total research and development expenses was approximately RMB670 million, representing an increase of approximately 59.7 percent over the previous year, according to Smoore.
The company has also developed a comprehensive safety assessment system to help its clients comply with standards in different markets. For example, Smoore created and put into action China’s first corporate one-stop risk assessment laboratory for the European Union’s Tobacco Products Directive compliance rules. The lab is capable of helping clients meet EU vaping market entry requirements, including having the ability to generate test reports within 5 working days.
Smoore has also put into operation seven fundamental research centers in China and the U.S. As of Dec. 31, 2021, Smoore had a total of 1254 R&D experts, with 101 having a doctoral degree or above, according to the release.
“The number of the company’s accumulative patent applications is 3408, involving temperature control, heating element, leakage-proof performance and e-liquid storage; and the number of new patent applications in 2021 was 1,187 globally,” the release states. “In 2021, Smoore also introduced the latest generation of production line, realizing the fully automated production of assembly, e-liquid injection, and packaging. Now, the single-line production efficiency has reached 7,200 standard vaporizers per hour, maintaining the industry’s leading position in manufacturing. The fully automated production line has been used by FEELM’s clients on a large scale.”
According to the Frost and Sullivan Report, the global market size of vaping devices is expected to grow at a compound growth rate of approximately 25.3 percent from 2022 to 2026, and global consumers are expecting products with improved safety, more authentic flavor reproduction and powerful functions, to satisfy their diversified needs.
“This is why FEELM introduced the world’s first ceramic coil disposable pod solution in 2021. FEELM will launch more disposable vaping products in overseas markets in 2022 to further strengthen its product portfolio,” the release states. “Moreover, in January 2022, FEELM has showcased the world’s thinnest ceramic coil vape pod solution, FEELM Air in London.”
The FEELM Air features seven major breakthroughs in vaping experience, including harm reduction, flavor reproduction and leakage-proof performance. “FEELM Air is going to be firstly launched in overseas markets,” said Frank Han, president of FEELM and vice president of Smoore. “Currently, FEELM is working with global clients on the regional deployment and promotion of FEELM Air.”
During Smoore’s 2021 Annual Performance Conference, Qiu Lingyun, vice president of Smoore said that the U.S and China have successively implemented a flavor ban on e-cigarettes, and Smoore has already prepared technical solutions for tobacco flavors in accordance with the U.S regulations over the last year, prior to the exposure draft of Chinese national standards of e-cigarettes that comes into force on May 1.
“Moreover, disposable vapes have shown strong growth momentum in recent years,” said Qiu Lingyun. “Smoore has developed integrated solutions to the heating element, e-liquid and temperature zone of disposable vapes, in a bid to diversify its product portfolio. Thus, SMOORE has been ready to launch successful disposable products in international markets soon.”
Net revenues of RLX Technology increased by 123.1 percent to RMB8.52 billion ($1.34 billion) in fiscal year 2021. The increase was primarily due to an increase in net revenues from sales to offline distributors, which was mainly attributable to the expansion of the company’s distribution and retail network (China banned internet sales of vapor products in October 2019).
Gross profit increased by 140.4 percent to RMB3.67 billion while gross margin increased to 43.1 percent from 40 percent in the prior year.
For the fourth quarter of 2021, RLX Technology reported net revenues of RMB1.9 billion, up 17.7 percent from the comparable 2020 quarter. Gross margin was 40.2 percent, compared with 42.9 percent in the same period of 2020.
“We are pleased with our operational and financial performance in the fourth quarter, ending 2021 on a strong note. Despite the evolving industry regulatory framework and challenging backdrop of recurrent Covid-19 outbreaks, we remained focused throughout the year on optimizing our distribution and retail channels, investing in scientific research, new product development, and digitalization upgrades,” said Ms. Ying (Kate) Wang, co-founder, chairperson of the board of directors and CEO of RLX Technology, in a statement.
“The 2021 fiscal year was defined by year-over-year revenue growth of 123.1 percent, further cementing our leadership as a trusted e-vapor brand for adult smokers. Looking ahead, we are confident that the company is well-positioned to further explore the enormous potential of this vast yet growing industry and achieve future growth in 2022 and beyond.”
A seven percent rise in full-year adjusted revenue to 25.7 billion pounds ($34.8 billion) was reported by BAT Friday, helped by sales of e-cigarettes and oral nicotine.
The world’s second-largest tobacco company also announced a dividend increase of 1.0 percent to 217.8 pence and a 2 billion pound share repurchase program for 2022, according to Reuters.
It posted a 51 percent rise to 2.05 billion pounds in adjusted sales of its “new categories” product line which includes e-cigarettes, heated tobacco and oral nicotine. Though the division has yet to turn a profit, BAT said it was on track to report revenue of 5 billion pounds and profitability by 2025.
“Continued growth in new categories is a cornerstone of BAT’s long-term plans for success,” Third Bridge analyst Ross Hindle said. “With over 1.1 billion smokers still using combustibles, the opportunity to convert consumers towards New Categories is highly attractive.”
The company said 4.8 million more consumers than last year used non-combustible products such as Vuse e-cigarettes, glo heated tobacco and Velo oral nicotine.
RLX Technology today announced its unaudited financial results for the third quarter ended Sept. 30, 2021.
Net revenues were CNY1.68 billion ($260.2 million), representing a decrease of 34 percent from CNY2.54 billion in the second quarter of 2021.
Gross margin was 39.1 percent, compared to 45.1 percent in the second quarter of 2021. U.S. GAAP net income was CNY976.4 million, compared with CNY824.3 million in the second quarter of 2021.
Non-GAAP net income was CNY452.7 million, compared with CNY651.8 million in the second quarter of 2021.
“In the third quarter, we continued to develop our business through concerted efforts deepening our scientific research abilities, adding to our differentiated product portfolio, and enhancing our sustainability initiatives. We also strengthened our core capabilities by expanding our talent pool, optimizing our retail network and making digitalization upgrades to our operating infrastructure,” said Ying (“Kate”) Wang, co-founder, chairperson of the board of directors and CEO of RLX Technology, in a statement.
“Looking ahead, with the formal confirmation of the amendment to the implementation rules of tobacco monopoly law announced last week bringing innovative tobacco products including e-cigarettes under the regulatory framework, together with the draft administrative measures for electronic cigarettes and the draft national electronic cigarette product standards announced earlier this week, we believe the sector will enter a new era of development—an era marked by enhanced product safety and quality, augmented social responsibilities, and improved intellectual property protection. These developments will pave way for long-term sustainable growth in this sector.”
“In the past quarter, we placed even more focus on investments in R&D, organizational upgrades and operational efficiency improvements in existing channels, shifting from the efforts on distribution network expansion in previous quarters,” said Chao Lu, chief financial officer of RLX Technology. “As a result, we have a richer product portfolio in the pipeline and healthier inventory levels across our value chain.”
“We believe our quarterly revenue drop was temporary, and the investments we made in products, talents, research, and compliance in the third quarter and beyond will place us in advantageous positions under the new regulatory paradigm. We expect these investments to yield steady and sustainable growth soon,” Lu added.
The China-based vapor company COEE has recently completed A-round financing of several million RMB, led by QF Capital investment, followed by investments from other financial groups.
“We mainly use A-round of financing to focus on improving our production R&D, layout in the global market channel, and user development as benefits of maintaining our product competitiveness and market influence,” said Tongliang Gao, co-president of COEE. “We are upholding the core values of long-termism, adopts innovative ‘manufacturer to sale integration’ channel strategy, consistently to respond and embrace policy supervision from the government, follow to the bottom line of protecting minors, and strives to become a marathon runner in the market.”
Established in January 2021 in Shenzhen, COEE is a user-focus vape company that integrates with vape industry supply chains and strong market channel partners, according to the release. COEE has become the standing director unit of the E-Cigarette Industry Committee (ECIC) and China Electronic Chamber of Commerce (CECC).
COEE products include its first generation “Meet” series that was launched in April. The device now offers 17 pod flavors. COEE stores have covered 30 provinces and 180 cities in the China mainland, and various stores and sales points have reached nearly 5,000. Qiyuan Liu, head of consumption investment for QF Capital, said that the core operation team of COEE are formerly from the mobile phones market.
“COEE has unique experience in channel construction and terminal management,” Qiyuan said. “Capitals recognize COEE team capabilities very much, and we are seeing COEE consistently put efforts in responding and cooperating with the supervision of the government. We are optimistic about the future development prospects of the project driven by demand.”
Turning Point Brands reported net sales of $109.9 million in the third quarter of fiscal 2021, up 5.5 percent over that of the previous year’s third quarter. Gross profit increased 12.3 percent to $54.3 million and net income increased 49.3 percent to $13.4 million.
“Our third quarter performance fell within our expectations with sales growth of 11 percent in our core business despite facing the headwind of Covid-related consumption and other benefits we experienced in the prior year period,” said TPB President and CEO Larry Wexler in a statement.
“Zig-Zag had another robust quarter driven by our strategic initiatives and growth within our Canadian business. Stoker’s saw double-digit growth in our Moist Snuff Tobacco (MST) business which drove growth in the overall segment. Regarding capital deployment, we continued to repurchase our shares during the quarter and today announced an increased share repurchase authorization. We also maintain a strong balance sheet to pursue a healthy pipeline of investment opportunities. Overall, we remain optimistic about the growth prospects in our core business.”
NewGen Products gross profit increased 22.4 percent to $13.5 million for the quarter. The segment gross margin expanded 760 basis points to 36.2 percent with the improvement partially driven by industry pricing pressure ahead of the PMTA submission deadline in the previous year comparable period.
Wexler said he was encouraged by the U.S. Food and Drug Administrations recent decision to reconsider and place back into review the premarket tobacco product application for TPB’s proprietary vapor products, which the agency had earlier rejected.
“I am confident that we submitted a robust application and look forward to engaging with the FDA in its review,” he said. “We continue to believe that robust regulatory oversight is a positive for the industry and we believe we are favorably positioned to leverage our strong regulatory and logistics capabilities to capitalize on an attractive long-term opportunity.”
RLX Technology founder Ying (Kate) Wang has resigned as a member of the audit committee of the company’s board of directors to help the RLX comply with the relevant New York Stock Exchange’s listing requirements on audit committee’s independence.
Going forward, the audit committee will be composed entirely of independent directors—Zhenjing Zhu and Youmin Xi—RLX technology announced in press note.
Smok is one the most well-known and respected hardware manufacturers in the vaping industry. Now, Shenzhen IVPS Technology, the firm behind the brand Smok, is considering an initial public offering to raise at least $500 million in Hong Kong as soon as next year, people with knowledge of the matter said.
According to a Bloomberg report, the company is working with a consultant in preparation for a potential share sale, said sources who asked not to be identified as the information is private. The offering could raise between $500 million and $1 billion. Deliberations are at an early stage and details of the potential offering such as timing and size may change, the people said. IVPS didn’t immediately respond to requests for comment.
Smoore International Holding’s stock (HK: 6969), parent to the Vaporesso, FEELM and CCELL brands, grew by nearly 150 percent on its opening day of trading on the Hong Kong Exchange. However, after China’s Ministry of Industry and Information Technology proposed a draft regulation in March that would apply the same rules for the conventional tobacco industry to the e-cigarette sector, shares of several Chinese e-cigarette companies plunged and Smoore shares are down about 40 percent this year.
While rising regulatory scrutiny of the vaping industry could impact investor appetite for listings in the sector, according to the article. IVPS could be less affected because it makes the device rather than the e-cigarette liquid, one of the sources said. However, Smoore also produces hardware and shares still fell after the Chinese government’s regulatory announcement.
Imperial Brands is on track to meet its full-year goals. The expectation is bolstered by strong sales of e-cigarettes and heated tobacco in Europe, the company said on Tuesday, boosting its shares to a more than two-year high.
Shenzhen-based Aspire Global has applied to U.S. regulators to withdraw its New York Stock Exchange (NYSE) 
Net revenues of RLX Technology increased by 123.1 percent to RMB8.52 billion ($1.34 billion) in fiscal year 2021. The increase was primarily due to an increase in net revenues from sales to offline distributors, which was mainly attributable to the expansion of the company’s distribution and retail network (China banned internet sales of vapor products in October 2019).
A seven percent rise in full-year adjusted revenue to 25.7 billion pounds ($34.8 billion) was reported by 
Turning Point Brands reported net sales of $109.9 million in the third quarter of fiscal 2021, up 5.5 percent over that of the previous year’s third quarter. Gross profit increased 12.3 percent to $54.3 million and net income increased 49.3 percent to $13.4 million.
