Boton Group's Huoqi E-cigarette Builds a Chinese E-cigarette Brand, Helping Boton Take Flight Again

Boton Group has been focusing on the flavor and fragrance industry since its establishment in 2005, initially relying on tobacco flavoring. It has now achieved full coverage of tobacco, food, and daily-use flavoring. In 2005, it successfully listed on the Hong Kong main board (stock code 3318.HK), becoming the first listed company in the domestic flavor and fragrance industry, further solidifying Boton's leading position in the industry. Before 2014, the company focused on horizontally expanding its flavoring business, with overall revenue showing an upward trend; after 2014, the company entered a high-growth phase through adjustments in customer structure, diversified sales channels, and the acquisition and integration of heated tobacco products.

The flavoring agent for tobacco: the main support for overall performance, showing stable growth. Tobacco flavoring complements cigarette products. In recent years, China's cigarette production has aimed at "raising the level of cigarettes" and guided by "Chinese-style cigarettes," both of which will drive the demand for tobacco flavoring. "Shenzhen Boton" is the subsidiary responsible for operating tobacco flavoring, focusing on flavoring agents in tobacco flavoring. Through advanced R&D technology, it continuously enhances customer loyalty and expands new customer resources. In 2016, the company acquired the flavoring agent business of four tobacco flavoring companies, further increasing market share and competitive advantage. In recent years, this business has shown stable growth, with profitability on the rise.
Food & daily-use flavoring: driven by downstream demand, performance shows slight fluctuations. The diversification of downstream demand is the driving force for the development of the flavor and fragrance industry, with emerging markets providing vast space for growth. "Dongguan Boton" is the subsidiary responsible for operating food and daily-use flavoring, with a rich product range and strong R&D capabilities. It has cooperated deeply with well-known companies such as Huiyuan, Yili, and Mengniu for over ten years, maintaining strong customer loyalty. With continuous expansion of customer resources, the performance of the food and daily-use flavoring segment may have room for improvement in the future.

Innovative exploration of new tobacco business: external acquisitions open new directions, aiding performance enhancement.

In recent years, the company has begun to extend its industrial chain vertically by laying out new tobacco products. The new tobacco business is booming, with overall profitability on the rise.

The company acquired Huoqi E-cigarette to open up the e-cigarette business. Huoqi E-cigarette mainly engages in OEM production of e-cigarettes, with most products sold under various brands through tobacco companies, independent e-cigarette manufacturers, and other clients, covering over 20 countries, including most global tobacco companies and top e-cigarette brands. Since taking over operations from China Flavor and Fragrance, Huoqi E-cigarette has entered a rapid growth phase and is expected to become a new growth direction for the company.
The collaboration with Sichuan Tobacco on heated non-combustible tobacco products has resulted in the launch of the "KuanZhai Kung Fu" device, the first heated non-combustible tobacco device launched by a tobacco company in China, developed by Sichuan Tobacco and manufactured by Boton Group's subsidiary in Huizhou, which is now available in foreign markets. The collaboration with Sichuan Tobacco is ongoing, exploring new tobacco fields, and is expected to enjoy the growth dividends of China's new tobacco industry. The so-called domestic IQOS Huoqi GS5.0 is also a masterpiece of collaboration between Boton Group and Sichuan Tobacco.

      Huoqi E-cigarette, as the only e-cigarette brand backed by a Hong Kong-listed company in China, has become the most prominent e-cigarette brand in the country. Boton Group has invested heavily in Huoqi E-cigarette to establish it as a Chinese e-cigarette brand, and the prospects for the e-cigarette industry are broad. Huoqi E-cigarette will undoubtedly lead the industry's development.