Electronic cigarettes and HnB are ushering in spring and are expected to gradually replace traditional cigarettes in the future. From the supply side perspective, tobacco control policies in various countries are becoming stricter, and reducing harm to tobacco products is an inevitable trend.

Tobacco sales continue to decline, and increasing unit prices alone is difficult to sustain revenue growth for tobacco companies. Expanding the new tobacco product market will create new profit growth points for tobacco companies. Major global tobacco companies have actively transformed into new tobacco products in recent years, and have launched more mature products.

From the demand side perspective, reducing harm while also having a "real smoke" experience is the main demand of users, and the launch of IQOS proves its feasibility of implementation. From a policy perspective, domestic tobacco companies are already actively deploying HnB products, and the domestic market is expected to open up in the next two years. At the same time, it will further regulate the electronic cigarette industry and promote its healthy development.

Analyst: Zhan Jing

Electronic cigarettes and HnB are ushering in spring and are expected to gradually replace traditional cigarettes in the future - electronic cigarette testing equipment

The world's first e-cigarette was released as early as 2003, and after 16 years of development, global e-cigarette sales reached $12.054 billion in 2017. With the addition of heated non combustible tobacco products (HnB, HetnotBurn), the total market size reached $17 billion, accounting for only about 3-4% of the entire tobacco market size.

Although the current market size of new tobacco products such as e-cigarettes is still very small, we believe that from the supply side, demand side, and policy side, mainstream new tobacco products such as e-cigarettes and heated non combustible tobacco products have ushered in the best era and are expected to gradually replace traditional cigarettes in the future.

On the supply side: The transformation of the tobacco industry is unstoppable, and the layout of giants promotes industry standardization

Tobacco control policies in various countries are becoming stricter, and reducing harm to tobacco products is an inevitable trend. The harm of smoking is enormous, and the World Health Organization has been committed to promoting people to quit smoking for decades.

With the tightening of tobacco control policies in various countries and the continuous improvement of people's health awareness, it is an inevitable trend for global tobacco products to develop from harmful to slightly harmful, and even harmless.

The new type of tobacco products with less harm will become the third major technological revolution in the tobacco industry, following the invention of the first cigarette maker by American Bersyk in 1881 and the introduction of cigarettes with micro filters by Lorillard Company in 1952.

Currently, the new types of tobacco products mainly include smoked tobacco products and smokeless tobacco products.

Tobacco products include electronic cigarettes and heated non combustible tobacco products, which generate smoke during the suction process.

The principle of electronic cigarettes is to atomize nicotine containing nicotine liquid (also known as tobacco oil) to form a gaseous substance.

Heating non burning tobacco products involves heating specially made tobacco to a certain temperature, but without igniting the tobacco, it can also form a tobacco flavored gas, which has a taste closer to real smoke.

Smokeless tobacco products specifically include three types: mouth smoke, snuff, and chewing tobacco. Mouth containing tobacco is made by grinding tobacco into powder and mixing it with salt and water. Nicotine is ingested into the body through mouth containing. It originates from Sweden, where more people smoke mouth containing tobacco than cigarettes.

Snuff is consumed through the nose, while chewing tobacco is chewed through the mouth.

Smokeless smoke