Recently, Itsuwa Co., Ltd. (NEEQ: 833767) in Shenzhen released its annual report for the year 2024. The report reveals that the company achieved a total operating income of 283 million yuan in 2024, a decrease of 12.59% compared to the previous year. The net profit attributable to the listed company's shareholders was -19.66 million yuan, a significant decrease of 194.47% year-on-year.
In the report, Itsuwa explained that the main reason for the decline in performance is the intense competition in the overseas e-cigarette market for homogenized products. Similar products are sold at lower prices in the market, and the company's differentiated advantages are not obvious, leading to a decrease in sales revenue. Additionally, the product structure of the company is more complex than the previous year, causing an increase in the use of labor hours per unit product, resulting in an increase in labor costs that further compress the profit margin. In 2024, the company's main business gross profit margin was 30.00%, a decrease of 5.99 percentage points from the previous year's 35.99%.
Itsuwa has stated that the company will continue to increase its research and development investment, with R&D spending accounting for 9.12% of current operating income in 2024. Research and development products include disposable e-cigarettes, pod-based e-cigarettes, open systems, and the research emphasis is on environmental protection, compliance, modularity, multiple pods, high capacity, and enhanced customer experience. During the reporting period, the company held 135 valid patents, including 8 invention patents.
At the same time, the company actively promotes its own brands of e-cigarettes, such as VAPESOUL and VOOM, targeting different consumer groups. During the reporting period, sales of the company's own brand products accounted for 29.37% of total sales, and it plans to continue expanding sales of its own brand e-cigarettes through 2025.
The report highlights that global regulations on the e-cigarette market are becoming stricter, with many countries implementing policies and tax standards to control e-cigarettes.
Meanwhile, the environmental issues brought by disposable e-cigarettes are increasingly receiving attention. Domestic e-cigarette policies are also becoming more complete, with measures such as market access permits and total quantity management expected to promote supply-demand balance. Overall, the industry is fiercely competitive, and businesses face growing challenges.
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