Revenue Soared 15-Fold in Half a Year: Can SKE’s Performance Miracle Continue?

According to people familiar with the matter, due toSkollThe long-term failure to meet performance commitments almost brought the gambling agreement with Winwin Technology to the brink of bankruptcy. However, surprisingly, by the first half of 2023, Skor's revenue exceeded 1.4 billion yuan, a year-on-year increase of 1477%. From "near-bankruptcy" to "performance explosion", what has happened to Skole in the past few years?

[Two Priests Original] Skull, who lost three years in the gambling agreement, suddenly experienced a huge explosion in performance in the first half of 2023 and was praised ase-cigarette industryThe strongest "black horse".& nbsp;

In mid-July, Skull's parent company, Shenzhen Winhe Technology Co., Ltd.(Winhe Technology, 300457.SZ), was due to itse-cigarettesThe business has attracted much attention, and the stock price has risen by more than 30% for three consecutive trading days. Winho Technology immediately issued an announcement stating that there have been no major changes in the company's operations. Even so, investors are still pouring in, and many seem to be optimistic about Skole's e-cigarette business. nbsp;

On August 25, Wingher Technology released its first-half 2023 financial report showing Skol's outstanding performance: Skol's revenue in the first half of the year exceeded 1.4 billion yuan, a year-on-year increase of 1,477.33%, accounting for Wingher Technology's first-half revenue. 29.8%. This astonishing growth rate has once again attracted the attention of the e-cigarette industry and investors. nbsp;

Skole's revenue in the first half of 2023 will increase nearly 15 times, while at the same time, the e-cigarette industry is no longer as booming as in previous years. Even people like Simmore (06969.HK) andfog core technologyIndustry leaders such as (RLX.US) also experienced a serious performance decline in the first half of 2023. Against this background, Skull's report card is particularly dazzling. nbsp;

thee-cigarette enterprisesHow did the new wealth rise rapidly?& nbsp;

Four years of frustration, one day "suddenly rich" 

Looking back on Skor's development history, we will find that this company, which was established in 2013, did not receive much attention before 2018. Until September 2018, Winho Technology acquired a 51% stake in Skol through a capital increase of 48.27 million yuan.& nbsp;

It is worth mentioning that the largest shareholder of Winho Technology is Shanghai Electric Group Co., Ltd.(Shanghai Electric, 601727.SH), the controlling shareholder of Shanghai Electric is Shanghai Electric Holding Group Co., Ltd., and behind the latter is the State-owned Assets Supervision and Administration Commission of Shanghai City. nbsp;

Skull Investor Equity Relationship Chart| Photo source: Sky Eye Inspection (Cartography: Two Things First)   

In the equity transaction between Skor and Winwin Technology, the two parties signed a performance commitment agreement. According to the agreement, Skole promised that the audited net profit in 2019, 2020, 2021 and 2022 should not be less than 60 million yuan, 28 million yuan, 100 million yuan and 200 million yuan.

However, from 2019 to 2022, except for 2020, Skull has not fulfilled his performance commitments." nbsp;

Skol's specific performance from 2019 to 2022 is as follows:

Industry insiders familiar with Skol revealed to the two supreme leaders that the gambling agreement almost bankrupt Skol. Therefore, at the end of 2022, Skull plans to re-find investors to buy back the shares held by Winhe Technology and terminate this gambling agreement." nbsp;

However, entering 2023, Skor's performance suddenly soared. Net profit in the first half of the year alone reached 417 million yuan, which not only exceeded the company's full-year net profit of 87.45 million yuan in 2022, but even far exceeded the company's total profits in the past four years (182 million yuan). nbsp;

What exactly did Skull experience during this period? Why will the company's performance suddenly surge in the first half of 2023?& nbsp;

To answer this question, you need to understand Skor's overseas development history and business situation. nbsp;

Hot products successfully "save lives" 

The SKE Crystal Bar product launched by Schole in the UK in 2021 can be said to be his "life-saving straw".& nbsp;

SKE Crystal Bar is a disposablee-cigarette products, its unique feature is that it uses crystal material to make the appearance, presenting dazzling gradient colors, which is obviously different from other e-cigarette products. This is its distinctive feature. The number of suction ports is 600, and there are many flavors such as lime and cherry.& nbsp;#p#Pagination Title #e#

 SKE Crystal Bar picture posted by Skor's official account on social platform Twitter| Source: Twitter   

Currently, on Skor's official website, the price of SKE Crystal Bar is 4.99 pounds, or about RMB 44; the dealer's retail price is between £ 4.49 and 7.99, or about RMB 40 to 71. The official website price of the ELFBAR600 is £ 5.99, which is approximately RMB 53, which is 1 more expensive than SKE Crystal Bar; the dealer's retail price is between £ 4.99 and 7.99, which is approximately RMB 40 to 71, which is basically the same as SKE Crystal Bar. nbsp;

The official website page of SKE Crystal Bar products| Source: Skor official website   

The  official website page of ELFBAR 600 products| Source: ELFBAR official website   

It is worth noting that once SKE Crystal Bar was launched, some industry insiders predicted at the exhibition that this product would be "popular". This prediction came true a year later-SKE Crystal Bar became Skor's most popular product.& nbsp;

When Two Supremes conducted a survey on the UK market in October 2022, they observed that the shelves rate of SKE Crystal Bar was very high. On the shelves, next to ELFBAR and GEEK BAR, there are almost all SKE Crystal Bar products.& nbsp;

In an e-cigarette store in London, England, the SKE Crystal Bar is displayed on the shelves with ELFBAR and GEEK BAR. The first row contains ELFBAR products, the second row contains GEEK BAR products, and the third row contains SKE Crystal Bar| Source: Two supremacy, taken in October 2022  

Data from data analysis agency Nielsen further confirms the success of SKE Crystal Bar. According to Nielsen data, in January 2023, SKE Crystal Bar ranked among the top ten disposable e-cigarette sales in the UK, ranking seventh.

In January 2023, SKE Crystal Bar ranked seventh among the top ten disposable e-cigarette sales in the UK| Data source: Nielsen   

Nielsen data shows that sales of disposable e-cigarettes in the UK in 2022 will be 138 million, of which Skole's sales exceed 30 million. The BBC mentioned in a report that Nielsen's data does not include sales from independent retailers and e-cigarette shops, and Skor's actual sales in 2022 may exceed 100 million cigarettes." nbsp;

According to insiders from Skol, Skol's best-selling product, SKE Crystal Bar, can even achieve sales of more than 10 million per month. A logistics provider who has long-term cooperation with Skor's European distributor also confirmed to Two Supremes that shipments of SKE Crystal Bar are very high.& nbsp;

Social media supports, channels win 

When discussing the reasons for Skull's surge in performance, some foreign media and some industry insiders attributed it to Skull's excellent ability in social media promotion. nbsp;

However, some British media have criticized Skole for relying too much on social media to attract young people. At the end of August, the BBC issued an article accusing Skole of using the British instant messaging platform Discord to promote it. Discord is said to have originally been a gaming platform with a large number of users under the age of 18. nbsp;

Skole promoted it on the Discord platform and was discovered by BBC reporter "Fishing" that it did not verify the age of the participants.| Source: BBC  

 #p#Pagination Title #e#

Promotional content posted on the social platform Twitter by Skor's official account| Source: Twitter   

In addition to the strong promotion capabilities of social media, in the exchanges between the two supreme parties and industry insiders, more people believe that the main reason for Schole's rise is its successful opening up of dealer channels in the UK. nbsp;

When talking about Skor's sales channels in the UK, I have to mention Zhang Jinghan, his UK sales manager.& nbsp;

A senior e-cigarette industry practitioner revealed to the two supremacy that Zhang Jinghan once worked in an e-cigarette companyHeyuanHe worked for the company, but was poached by Skole in 2021 and appointed as sales director responsible for the UK market.& nbsp;

An investor who has long been concerned about Winwin Technology told two things first that Zhang Jinghan received a special contribution award internally awarded by the company at the 2022 annual meeting in Skol, and the award clearly highlighted her outstanding achievements. This also allows us to gain a deeper understanding of Schole's business performance in the UK.

At Skull's 2022 company annual meeting, Zhang Jinghan, UK marketing director, was awarded the "Special Contribution Award"| Source: Interviewee   

The above award mentioned that Zhang Jinghan joined Skor in 2021. During the period from 2022 to May 2023, it helped the company transform into an e-cigarette provider operated by its own brand, laying the foundation for the company's sustainable development. In 2022, the industry will undergo tremendous changes and the company's development will face transformation. It will use its own business resources and brand operation capabilities to launch a series of SKE Crystal Bar 9298 products in the UK, becoming famous and achieving sales revenue doubling year-on-year. From January to April 2023, SKE has jumped to a one-time status in the UKe-cigarette brandsTop four, and enjoys a brand reputation in many European countries.& nbsp;

"This decline and the other growth" with ELFBAR? 

The advantages of social media and overseas channels have helped Skole rank among the top ten in the UK. The further explosion of Skor is believed by most industry insiders and investors to have an inseparable relationship with another well-known e-cigarette brand, ELFBAR." nbsp;

In February 2023, ELFBAR, the UK's largest e-cigarette brand, was due to its productssmoke oilThe problem of exceeding the standard was exposed, causing more than 70% of supermarkets in the UK to remove ELFBAR-related products. After ELFBAR was removed, sales of SKE Crystal Bar increased rapidly, seizing part of ELFBAR's market.& nbsp;

On March 30, when Two Supremes conducted a visit and survey at the Manchester E-Cigarette Distribution Channel Gathering Center in the UK, an India-Pakistan dealer said that because ELFBAR was removed from the shelves due to excessive tobacco oil, they could only promote SKE products. As a substitute for ELFBAR. nbsp;

A logistics provider who has long-term cooperation with Skor's European distributor revealed to Two Supremes that while some ELFBAR products were removed from the shelves, a large Dutch distributor with which he had long-term cooperation was "pried" away by Skor. It is rumored that this dealer once started out with ELFBAR and has operations in the UK and the Netherlands. After being successfully "pried" by Skol, it now purchases 3000 to 4000 boxes of goods from Skol every month (each box contains 200 or 300 products).& nbsp;

According to Nielsen data, in April 2023, SKE Crystal Bar became the fourth-ranked disposable e-cigarette brand in the UK. This score is up three places from January, second only to ELFBAR, ELUX and VUSE GO, and surpassing GEEK BAR, IVG Bar and Hyppe." nbsp;

In April 2023, SKE Crystal Bar ranked fourth among the top ten disposable e-cigarette sales in the UK| Data source: Nielsen   

Although in mid-March and mid-April, some SKE Crystal Bar products were removed from shelves in the UK twice due to excessive tobacco oil, this did not affect its subsequent development. nbsp;

Nielsen's August 2023 data shows that Skor is currently the second largest e-cigarette brand in the UK.& nbsp;

Based on comprehensive data and the views of industry insiders, the sudden "accident" in ELFBAR has undoubtedly indirectly promoted Skole's advancement to a higher level. nbsp;

Can the myth of high growth continue? 

From this point of view, the success of the "dark horse" Skole is inseparable from factors such as products, promotion, channels and accidental events. Can such success be maintained?" nbsp;#p #Pagination Title #e #

Skole's main market, the UK, is currently mired in uncertainty about whether disposable e-cigarettes will be banned. nbsp;

Some investors said:

"If the UK bans disposable e-cigarettes, then Schole's peak moment will be now." nbsp;

However, it should be pointed out that Skole is not only in the UKe-cigarette marketOccupy a leading position. According to the two supremacy understandings, Skor is also the leading brand in the Dutch disposable e-cigarette market; in addition, in July 2023, Skor also entered markets such as North America and the Middle East, and launched SKE Crystal series products in these markets. nbsp;

According to information on the recruitment website, Skor is also actively expanding markets including Japan and South Korea, Spanish-speaking regions, German-speaking regions, Russian-speaking regions, New Zealand, America, Southeast Asia and other places. nbsp;

While extensively exploring the market, Two Supremes learned through Skol's official website that Skol has also launched a variety of replaceable-type e-cigarettes andCBDProducts have broadened the company's product line and entered multiple tracks.& nbsp;

Skull's replacement products displayed on his official website| Source: Skor official website   

However, Schole's bomb-changing products seem to have failed to meet expectations in terms of sales. nbsp;

According to people familiar with the matter, one of Skor's bomb-changing products has the same appearance as the hit SKE Crystal Bar. However, although this bomb-changing product has been on the market for more than half a year, it has not been able to obtain a "decent" order. nbsp;

It seems that the channel advantages of SKE Crystal Bar products in the market have not been reflected in Skor's bomb-changing products." nbsp;

Some investors worry that if the UK does ban disposable e-cigarettes, Skole may have difficulty maintaining its current market share. They believe that replaceable products are an area that some established manufacturers (such as Simmore and Heyuan) are good at, and it is difficult for "young" e-cigarette manufacturers like Skole to get a piece of the pie. nbsp;

However, some senior practitioners in the e-cigarette industry also pointed out that leading disposable e-cigarette companies have natural advantages in joining the replacement market and can quickly occupy market share. nbsp;

Whether Skor, the super dark horse in the e-cigarette industry, is a flash in the pan or continues to maintain high growth will still take time to verify. nbsp;