Half-Year Revenue Analysis of E-cigarette Companies in 2023

In recent times, companies listed in the e-cigarette business have been releasing their financial performance for the first half of the year. The financial data for the first half of 2023 from these companies has attracted widespread attention within the e-cigarette industry, particularly due to significant discrepancies in the growth rates among different e-cigarette enterprises, as revealed by their respective financial reports.

According to incomplete statistics from 2FIRSTS, among the 10 listed companies that primarily engage in the e-cigarette industry, such as Smoore, RELX, Itsuwa, Younger Technology (parent company of Scoler), and IntreTech, only Younger Technology, Xiaosong shares, Jinkia shares, and Shunho shares have reported a decline in revenue.

In terms of revenue growth, four companies experienced year-on-year growth in the first half of this year, with the highest increase recorded by the tech company YH Science and Technology, with a staggering rise of 1477.33%, reaching a half-yearly operating income of 1.433 billion yuan. It is worth mentioning that the company's total annual revenue for the year 2022 was only 540 million yuan.

Smoore, RELX, Itsuwa, China Boton, IntreTech, and Tianchang Group are among the companies that experienced a decline in revenue. Among them, YuKe Technology witnessed the most significant decline, with a year-on-year decrease of 85.64%.

Regarding the reasons for the decline, both RELX Technology and Itsuwa, which are primarily focused on independent brands, stated in their semi-annual reports that the proliferation of the illicit market was one of the causes for the decrease in revenue. Additionally, RELX Technology also mentioned that the implementation of domestic regulatory policies has had an impact. Itsuwa further pointed out that market competition was unusually intense in the first half of 2023. Some e-cigarette companies adopted a sales model similar to fast-moving consumer goods, supplying directly to stores and then promoting locally, using a delivery-first, payment-later method, and paying commissions. This supply method poses a significant challenge to the traditional distributor sales model.

Contract manufacturing companies Smoore, Tianchang Group, IntreTech, and Shunho Corporation have all experienced a decline in their operating income. Smoore stated that the decrease in its revenue and profit is primarily attributed to short-term impacts from rapid market changes and external factors. Tianchang Group explained that the sharp drop in its e-cigarette business revenue was due to the cancellation of exclusive rights by a major client, leading to a decrease in e-cigarette orders.

It is worth noting that e-cigarette companies performed better in the second quarter of this year compared to the first quarter. This trend is also confirmed in the e-cigarette export data released by the General Administration of Customs of China. Specifically, in the first quarter of this year, China's e-cigarette exports amounted to $2.497 billion, while in the second quarter it reached $2.986 billion, an increase of 19% compared to the previous quarter. In terms of quantity, e-cigarette exports in the first quarter were 44.58 million kilograms, while in the second quarter they reached 59.53 million kilograms, an increase of 33.5% compared to the previous quarter.

According to conversations with several experienced e-cigarette professionals, 2FIRSTS has learned that the market conditions in the e-cigarette industry for the second half of this year are still unpromising, influenced by factors such as regulatory policies, international situations, and market demands.