Tag: stock

  • Smok Parent, IVP Technology, Considering Hong Kong IPO

    Smok Parent, IVP Technology, Considering Hong Kong IPO

    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.

  • RLX Stock Jumps 29% on Week, Q1 Revenue up 48%

    RLX Stock Jumps 29% on Week, Q1 Revenue up 48%

    RLX Technology shares took a tumble back in March after China announced it would soon start regulating e-cigarettes, falling more than 40 percent. Over the past week, on expected high earnings, the company’s stock began to recover and was at $11.93 pre-market today after seeing a low $7.89 in March. Today, the company announced its unaudited financial results for the first quarter ended March 31, 2021.

    Kate Wang / Credit: RLX

    Net revenues were RMB2.4 billion ($366.1 million), up 48.2 percent from RMB1.62 billion in the fourth quarter of 2020. Gross margin was 46 percent, compared to 42.9 percent in the fourth quarter of 2020. GAAP net loss was RMB267 million, compared with RMB236.7 million in the 2020 fourth quarter. Non-GAAP net income was RMB610.5 million, representing an increase of 45.6 percent from RMB419.3 million in the fourth quarter of 2020.

    “2021 began, on a solid note, with strong growth in key performance metrics of our business,” said Ying (Kate) Wang, co-founder, chair of the board of directors and CEO of RLX Technology, in a press note. “Specifically, our expansion in distribution network fueled a strong sequential growth, further demonstrating sustained user demand for our e-vapor product portfolio.”

    “As the go-to brand of e-vapor products in China, we remain dedicated to investing in deepening our scientific research, improving our technology and product development, expanding our distribution network and retail outlets as well as enhancing supply chain and production capabilities.

    “In the first quarter, we opened our Quality Lab to further strengthen our quality assurance and control capabilities, and started developing our second and third exclusive production plants to enhance our production capabilities. We believe we are well positioned to further capture the growth potential in the e-vapor industry in China,” Wang concluded.

    During an early morning earnings call, RLX CFO Chao Lu said the company is dedicated to investing in deepening its scientific research, improving its technology and product development, expanding its distribution network and retail outlets, as well as enhancing supply chain and production capabilities.

    “Our robust results in the first quarter of 2021 exemplify our strong capabilities in meeting user demands for reliable, innovative and trustworthy products,” said Chao Lu, who joined the company in February. “Building on rapid revenue growth and continued efforts in improving operating leverage, our gross margin and non-GAAP net margin have remained steady in the first quarter. We will continue to pursue user value creation by enhancing our suite of product offerings and strengthening our brand leadership in the market.”

    For the second quarter of 2021, RLX Technology expects net revenues to exceed RMB2.85 billion, and expects non-GAAP net income to exceed RMB720 million. The company’s expected GAAP net income will include share-based compensation expenses which depend on the company’s share price. The company currently also expects gross margin to remain steady.of 

  • Democrat Election Wins Boost Marijuana Stocks

    Democrat Election Wins Boost Marijuana Stocks

    Photo: Photo: forcal35 from Pixabay

    Marijuana stocks have risen this week following the victories of Raphael Warnock and Jon Ossoff, both Democrats, in Georgia’s Senate election runoffs, reports Fox Business. Following President-elect Joe Biden’s win, Democrats will now have control of the presidency as well as both chambers of Congress. Democrats will have 50 seats in the Senate, giving Vice President-elect Kamala Harris the tie-breaker vote.

    Canopy Growth, the first marijuana stock to ever be publicly traded in North America, is up 13.2 percent since the election. Shares of Green Thumb stock are up more than 10 percent.

    “This new slate of leadership presents an incredible opportunity for national cannabis reform in the United States—the beginning of the end for the long-outdated prohibition on cannabis,” David Culver, U.S. vice president of government relations at Canopy Growth, told Fos Business. “We feel confident that Congress, with the support of the incoming Biden administration, and particularly Vice President-elect Kamala Harris who was an original sponsor of the MORE [Marijuana Opportunity Reinvestment and Expungement] Act, can achieve full federal legalization in the very near future.”

    The Marijuana Opportunity Reinvestment and Expungement Act (MORE) Act was passed by the House in December, but Senate Majority Leader Mitch McConnell denied bringing it to a Senate vote. This may change under the incoming Biden administration, however.

    While Harris was against marijuana legalization while working as district attorney and attorney general in California, she changed her position in the Senate to co-sponsor the MORE Act. Biden, as well, favored decriminalizing marijuana during his 2020 presidential campaign.

    Green Thumb Founder and CEO Ben Kovler predicts that a fully legalized marijuana market in the United States could be an $80 billion to $100 billion industry, according to Fox Business.

    “Consumers are choosing; they’re replacing alcohol,” Kovler said. “Consumers 35 and under are choosing cannabis over alcohol. We’re seeing seniors, 60 and over, choose this to replace things like Ambien, or pain meds [for] arthritis. There are all kinds of different uses for the plants as we turn the plants into consumer products.”

    Further legalization of marijuana could open new opportunities for tobacco farmers faced with declining demand for their crops.

    In 2018, U.S. Congress legalized hemp with less than 0.3 percent THC, the psychoactive component in cannabis, in all 50 states. Since then, some tobacco farmers have either shifted to growing hemp or added it to their repertoire as an additional income source. Some major tobacco companies have taken stakes in the cannabis industry in recent years. Altria Group, for example, purchased a stake in Cronos Group, a leading global cannabinoid company, headquartered in Toronto, Canada. Pyxus International, the parent company of leaf tobacco merchant Alliance One International, purchased a 40 percent share in Criticality, an integrated industrial hemp company.

    The global industrial hemp market size is expected to reach $15.26 billion by 2027, exhibiting a revenue-based compound annual growth rate (CAGR) of 15.8 percent over the forecast period, according to Grand View Research. Additionally, according to Global Market Insights, the cannabidiol (CBD) market exceeded $2.8 billion in 2019 and is set to grow at around 52.7 percent CAGR between 2020 and 2026, with the global market valuation for CBD crossing $89 billion by 2026.

    The opportunities presented by legal marijuana extend also to suppliers of the tobacco industry. For example. German tobacco machinery maker Hauni recently developed equipment or cannabis processing.

  • Analysts Supporting Turning Point Brands’ Stock Upside

    Analysts Supporting Turning Point Brands’ Stock Upside

    Financial analysts are now falling in love with Turning Point Brands (TPB). The company’s stock, TPB, now has at least three analysts covering the stock and the consensus rating is “Buy.” The company has submitted premarket tobacco product applications (PMTA) for 250 products.

    The target price ranges between 50 and 39 calculating the mean target price of 42.67, according to data from seekingalpha.com. TPB’s share price reflects a potential upside of approximately 30 percent based on the underlying business with additional “upside optionality” from each of the opportunities noted above.

    Reasons for the growth include recent U.S. Food and Drug Administration (FDA) regulatory intervention that “creates multiple market share ‘land grab’ opportunities for TPB as non-compliant competitors are forced to exit the marketplace. There are also new growth initiatives for the smokable CBD segment through product introductions (e.g., cones, hemp paper) and entry into alternative growth channels (e.g., headshops, dispensaries and e-commerce) in both US and Canadian markets,” according to seekingalpha.

    “The NewGen division represents TPB’s growth engine and platform focusing on developing, testing, acquiring and investing in high-growth new proprietary businesses,” writes the author. ” While it is the largest revenue segment, it currently includes mostly lower margin third-party products sold through online distribution channels. As the product mix shifts towards proprietary products, the gross margins will rise to proprietary standard margins of 50%+ without impacting costs.”