Jinlong Electromechanical: E-Cigarette Industry Penetration Remains Relatively Low, Leaving Signific

Jinlong Electromechanical released its 2023 semi-annual report, stating that the company achieved an operating income of 1.643 billion yuan in the first half of the year, a year-on-year increase of 4.32%; the net profit attributable to the parent company was 22.9052 million yuan, a year-on-year increase of 73.74%.

[Two Supremes News] On August 29, Jinlong Electromechanical released its 2023 semi-annual report, stating that the company achieved an operating income of 1.643 billion yuan in the first half of the year, a year-on-year increase of 4.32%; the net profit attributable to the parent company was 22.9052 million yuan, a year-on-year increase of 73.74%. 

Report Content | Source: Jinlong Electromechanical

Its wholly-owned subsidiary, Xingke Electronics, received a tobacco monopoly production enterprise license from the National Tobacco Monopoly Administration on August 15, 2023 (for electronic cigarette OEM enterprises), with the license valid until July 31, 2025.

The report mentions that the current penetration rate of the electronic cigarette industry is still relatively low, and there is still significant room for industry development, thus continuously attracting enterprises to layout, accelerate, and increase entry.

Xingke Electronics' electronic cigarette products mainly target overseas markets. Since the implementation of relevant domestic electronic cigarette regulatory policies last year, some domestic electronic cigarette manufacturers and brand companies have shifted to overseas customers or increased their efforts to develop overseas customers and production capacity supply, leading to intensified competition faced by electronic cigarette export manufacturers, further compressing gross profit margins. In the future, the industry will still face risks of intensified competition, overcapacity, and further reduction in gross profit margins.

Jinlong Electromechanical stated that it will increase efforts to develop the market, actively explore new customers, strive to enter the supply chains of other well-known electronic cigarette brands, expand the company's customer base, increase the proportion of business income from other customers, reduce customer concentration, and enhance the business's risk resistance capability.

References:    【1】 2023 Semi-Annual Report