BYD Electronics announced on the 4th that its subsidiary, BYD Precision Manufacturing Co., Ltd, has been awarded the Tobacco Monopoly Administration's license to manufacture electronic cigarettes. This license allows BYD to enter the rapidly-growing electronic cigarette industry. In response to this new opportunity, the company has already completed the construction of an automated production line.
On the evening of the 4th, Jing Jia Group (002191) announced that its subsidiary, Shenzhen Yunpu Xinghe Technology Service Co., Ltd., of which the company holds a controlling stake, recently received an electronic cigarette processing license from the National Tobacco Monopoly Bureau. The license covers the production and export of pods, the processing of pods, the production and export of electronic cigarette devices, the processing of electronic cigarette devices, and the production and export of products combining pods and smoking devices, as well as processing of such products.
According to the announcement, Yunnan Yunpu Star River serves as an important platform in the company's new tobacco industry chain, offering electronic cigarette brand customers with one-stop production, assembly, and supply chain services that are tailored to their specific needs. The company also continuously explores and extends the industry chain in the new tobacco field.
Leading electronic cigarette manufacturer Smoore recently announced that two of its subsidiaries obtained tobacco monopoly production licenses, while three other subsidiaries obtained tobacco monopoly enterprise production licenses. BYD Electronic is a newcomer in the vape industry but is considered a challenger to industry leaders due to the company's strong OEM capabilities. BYD Electronic claims to be one of the leading manufacturers in the electronic atomization field.
BYD Electronic stated that thanks to its strong research and manufacturing capabilities, it strictly followed the prescribed procedures to complete the application process and quickly passed the evaluation by the national regulatory department. This is also a recognition of BYD Electronic's commitment to quality and meticulous management.
Currently, BYD Electronics has completed patent layouts and built automated production lines for its complete range of electronic atomization products. The company has fully integrated its new material research and development, precision mold making, product design and development, and intelligent manufacturing capabilities to become a practitioner and leader in the field of healthy harm reduction. Its goal is to provide high-quality and reliable products to its vast user base.
BYD Electronic was spun off from the parent company BYD and primarily engages in contract manufacturing of smartphones, masks, electronic cigarettes, and other electronic products. As early as 2018, BYD Electronic began to lay the foundation for its electronic cigarette business and recently launched its ceramic atomization core (ceramic core) technology under the brand name "BEEM CORE" in 2021.
In 2021, Smoore's global market share continued to expand to 22.8%, surpassing the total of the second through fifth largest competitors, solidifying their position as the world's largest manufacturer of electronic atomization devices. However, recently, Smoore's stock price has fallen significantly as investors believe that the entrance of competitors such as BYD and Luxshare Precision into the industry will result in Smoore losing market share and reducing profitability.
However, industry experts estimate that BYD's contract manufacturing capacity will not be too high as they are new to the industry and approved capacity mainly depends on historical operating data.
China's State Tobacco Monopoly Administration issued guidelines on March 11, 2022 regarding the regulation of electronic cigarettes. The guidelines state that anyone engaged in the production, wholesale, retail, or other aspects of the electronic cigarette industry within China must obtain a tobacco monopoly license. The guidelines also establish a transition period between May 1, 2022 and September 30, 2022.
In early June, the government began conducting qualifications and production capacity reviews, which lasted until early October. Therefore, August and September will be a period of intense publication of production licenses and production capacity for electronic cigarette companies. It is understood that both brand owners and manufacturers are required to disclose approved production capacity.
Currently, it is a critical moment for license issuance. It is understood that regulatory agencies have established many teams to visit companies and review different aspects depending on the industry. For example, for atomization companies, the focus is on whether licenses are complete, whether the site is standardized, whether the process is scientific, what quality control requirements are in place, how the employees are trained and educated, as well as annual production capacity and historical sales.
BYD Electronic announced that it will firmly support the government's relevant policies on e-cigarettes, and operate in compliance with the law to contribute positively to the healthy and orderly development of the industry.
On the 4th of May, Smore announced that it had been awarded a Tobacco Monopoly Production Enterprise License, which was a recognition of the company's past compliance and fine management by the state. In the future, Smore will continue to implement regulatory requirements, develop in a standardized and orderly manner, and firmly support relevant national policies, conducting business operations in compliance with the law. At the same time, as driven by scientific and technological innovation, the company will actively promote the long-term and healthy development of the industry, serve global customers and users, fulfill its corporate responsibilities, and make positive contributions to society.
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