From vaping to medical and beauty atomization: is Smoore’s new path easy to follow?

 At the 2022 mid-year results conference, Chairman SimmoreChen zhipingThree major businesses in the future are proposed, and we hope toe-cigarettesIn addition, we continue to expand the aerosol medical and aerosol beauty business. One and a half years after proposing this goal, how much research and development funds has Simmore invested around this goal? How to arrange and participate in aerosol medical treatment and aerosol beauty treatment? What effect has been achieved now?

Statement:

[1]This article is limited to global atomization industry research and does not involve any brand or product recommendations.

[2]This article is only used for research and reference on the development of the global atomization industry and does not involve any capital market evaluation or investment suggestions. This article should not be used as the basis for any investment.

[3]The scope of this article is limited to the commercial field and does not include any comments on regulatory policies.

From e-cigarettes to medical and beauty atomization, is it easy to walk on the new road of Moore?

After proposing the three major businesses in the future, how does Simmore deploy and participate in aerosol medicine and aerosol beauty around this goal?

What effect has been achieved now?

Wen| Two supremacy

[Two Supremes Originals] If you could build a laboratory, what research could you think of to do? The answer from Simmore International (hereinafter referred to as "Simmore"), a leading company in the atomization industry, may be a bit strange. They decided to study "skin health."

According to a press release issued by China Pharmaceutical University, Simmore International's subsidiary Shenzhen Moore Aerosol Health Medical Technology Co., Ltd. and China Pharmaceutical University jointly built the "Joint Laboratory for Skin Health and Aerosol Delivery." At the signing ceremony, Simmore's Vice President Wu Junlan and Zhang Bing attended the signing ceremony.

 signing ceremony| Source: China Pharmaceutical University

Considering that the concept of big health has been very popular in the capital market in previous years, the medical and health industry has continued to expand in the past decade, and the medical device field has become even more popular. It is understandable that Simmore, a giant in the field of atomization, has cooperated with scientific research institutions to establish a laboratory related to 'atomization health', but Simmore's "ideas" do not stop there. Through the innovative combination of "atomization + medical, beauty", whether it is possible to expand new business areas while maintaining original resources has become a matter of great concern.

Scientific research cooperation with universities

According to the report, the joint laboratory established in cooperation with China Pharmaceutical University aims to give full play to the advantages of the college's "Transdermal Drug Delivery Preparations and Cosmetics Research and Development Platform" and focus on key technological research and product development for transdermal drug delivery and dermal preparations. It is worth noting that Zhang Bing emphasized at the scene that Simmore continues to exploreatomization technologyThe concept of innovation and application boundaries. He said that jointly building a "joint laboratory" will help furtherExplore the innovative application of atomization technology in the field of beauty。

The article stated,"The joint laboratory will focus on deepening the skin delivery behavior mechanism of skin care ingredients in the form of atomization. At the same time, from the perspective of the "three forces" of skin balance, resistance, and self-healing, we will explore the skin damage problems that may be caused by light medical beauty projects, and provide a scientific and technological foundation for the development of subsequent atomized beauty products."

This is not the first time Simmore has cooperated with universities on atomization projects. In 2022, the School of Pharmacy of South-Central University for Nationalities and Shenzhen, a wholly-owned subsidiary of Simmore.McQuayTechnology Co., Ltd. formally signed a cooperation agreement, and the two sides will carry out in-depth cooperation in the transformation of scientific research results, product co-construction, and comprehensive scientific research consultants. This question specifically mentioned that after the two parties sign an agreement, atomization technology will be organically integrated with market demand in the field of general health. Starting from the pain points of consumers,#p#paginated title #e#Research and develop new big health products around atomized drugs, atomized traditional Chinese medicines, cosmetics, etc. During the research and development period, the cooperative enterprise will inject 9.4 million yuan in research and development funds into the team.

Simmore's "Three Things"

It is no longer new for Smore to lay out the beauty industry.

In 2022, a research report by Guohai Securities conducted a detailed analysis of Simmore, which mentioned Simmore's layout in addition to "nicotine atomization". Simmore registered and established Shenzhen Moore atomization Health in December 2020. Medical Technology Co., Ltd., according to public information, Shenzhen Moore atomization Health has successively applied for trademarks such as Shuwukang, AUBREEZ, and AIRSMOOTH. "Smore stated that the first batch of beauty and aerosolized medical products are currently under development as planned and will be launched to market in the near future," the report said.

 List of trademarks applied for| Photo source: Sky Eye Inspection

At the performance report meeting for the first half of 2022, Chen Zhiping, Chairman of the Board of Directors of Simmore, also directly elaborated on his future development ideas for Simmore during the Q & A session. He said that Simmore will only do these for a long time in the future. A few main business:

One is new tobacco, which is the main source of income and a huge market; the second is beauty; and the third is medical care. Medical treatment includes Western medicine for the treatment of lung diseases such as asthma and chronic obstructive pulmonary disease, as well as research in traditional Chinese medicine.

 Simmore's three major business categories| Source: Simmore official website

After determining the three main business lines, Simmore has increased its investment in beauty and medical businesses. Its 2022 performance report shows that Simmore will invest 1.372 billion yuan in research and development expenses in 2022, a year-on-year increase of 104.6%.Among them, 12% are used for aerosol medical and aerosol beauty products,Nearly 14% is used for special-purpose atomization products and related technologies.

By the first half of 2023, Simor's total research and development expenditure will be close to 615 million yuan, an increase of 1.8% over the same period last year. Among them, R & D expenditure for special purpose atomizing products and solutions accounted for approximately 13.4% of the total expenditure (13.3% in the same period last year).R & D expenditure on atomized medical and atomized beauty products accounted for 18.5% of total expenditure (4.3% in the same period last year).

 The proportion of financial report R & D pointed out in the semi-annual 2023| Source: Simmore official website

In terms of the accumulation of existing technology, Simmore obviously needs the results of front-line scientific research to support his path. With the above-mentioned cooperation with the School of Pharmacy of South-Central University for Nationalities, Professor Liu Jikai, the research leader, has "systematically and deeply carried out in-depth research on bacterial chemistry and active ingredients, and deeply grasped underlying technologies such as natural product extraction, separation and purification, structure analysis, and evaluation of active and functional ingredients. It has achieved a series of major innovations and successful development experience of natural drugs and related products."

As a force in scientific research, it may provide Simmore with a strong scientific research foundation, accelerate Simmore's research process in the field of natural medicines, and may also provide innovative directions and practical experience for the company to develop new products. At the same time, it may be possible to find suitable talents in the scientific community to continue to expand this business.

"Applying electronic atomization technology and products to the healthcare industry"

On July 10, 2020, Simmore was listed on the main board of the Hong Kong Stock Exchange. When it first entered the capital market, Simmore was not satisfied with being limited to the field of e-cigarettes. An article in Sina Finance described this as such, Simmore "One of the focuses of the next phase of research is to apply electronic atomization technology and products to the healthcare industry。”

Judging from the progress of subsequent releases, Simmore has targeted lung disease treatment in medical atomization. In its 2022 financial report, Simmore said that it has independently completed the research and development of a domestic ventilator-combined atomization drug delivery device and has successfully obtained a production license; The development of two drug delivery devices for asthma and chronic obstructive pulmonary disease has been completed, and the development of related preparations has been initiated.

According to World Health Organization (WHO) data, chronic obstructive pulmonary disease is a common lung disease and the third largest cause of death in the world, causing 3.23 million deaths in 2019. Inhalation therapy is the main treatment for the disease, allowing the drug to reach the patient's lungs,#p#pagination title #e#

 Chronic obstructive pulmonary disease diagram| Source: Shenzhen Health Commission

Compared with Simmore's recent report, it is not difficult to find that medical atomization is being promoted to its main business.

Comparing the 2022 interim report and the 2022 annual report, the 2022 annual report expands the main business from two parts to three parts for the first time. It is in "(1) Research, design and manufacture of enclosed electronic atomization equipment, electronic atomization components,heating non-burningEquipment and components and special purpose atomizing products, and (2) research, design, manufacture and sales of open electronic atomizing equipment or advanced advanced private electronic cigarette equipment ("APV") for retail customers, add "Based on nebulization technology, we provide patients with new businesses such as nebulization medicine for inhaled drug delivery products"and other content.

 2022 Interim Report| Source: Simmore International

 2022 Annual Report| Source: Simmore International

Smore did not disclose the starting point for the new content, but it is worth noting that during the interval between the publication of the two reports (September 7, 2022-April 20, 2023), the mandatory national standards for "E-Cigarette" will be implemented from October 1, 2022.All fruit-flavored e-cigarettes in China will be removed from shelves, and the national unified e-cigarette trading and management platform only provides national standard tobacco-flavored e-cigarettes and smoking equipment with children's locks.

Before the implementation of the "new national standard", Qiu Lingyun, vice president of Simmore International, once said that the introduction of a new policy for domestic e-cigarettes means that multi-flavor e-cigarettes will decline in the domestic market, and consumers 'adaptation to the flavor of tobacco may be inconsistent., there may be a decline in the short term.In the long run, compared with the introduction of new regulations on e-cigarettes in the United States, the U.S. market has also experienced 2 to 3 months of shocks, and then returned to its previous state. It is expected that the domestic market will rebound after falling to a new low.

"Medical care, health care, and beauty are the directions that Simmore International is vigorously deploying. They have been studying for a long time. Among them, related products have been developed in the field of atomization beauty and are being planned to be launched in the second half of this year or the first half of next year. The aspect of atomization health care is still in research." Qiu Lingyun said at the March 2022 performance meeting.

More than a year later, Simor's 2023 mid-year report pointed out that its "research and development in the field of aerosol medicine is steadily advancing. In the second half of 2023, we will continue to develop various pharmaceutical projects according to the established plan."

But add "new" to the main businessaerosolized medical"and other contents are undoubtedly to show the capital market its future strategic direction, which exposes Simmore's concern about" medical atomization."However, whether such concerns can persuade investors to be optimistic about its future development, the outside world has different voices. The biggest doubt is that medical care itself requires long-term investment and repeated experiments by companies. Pre-listing review is even more difficult, and it is difficult to reach commercial application level in a short period of time.

A realistic example comes from Philip Morris International (PMI), which successfully acquired Healthcare for US$1.36 billion in 2021atomizerVectura, but just two years later, Philip Morris International is already considering selling its stake in Vectura. The Wall Street Journal reported that since Vectura will not submit its aspirational inhaled products to the U.S. Food and Drug Administration (FDA) after unsuccessful clinical trials,"Philip Morris International is actively seeking partners to support Vectura's business expansion in the pharmaceutical manufacturing field."

 American medical atomizer manufacturing company Vectura brand| Source: Vectura

A user of the investor's vertical social platform "Snowball" said,"Aerosol drugs are logically feasible, and there are already many aerosol treatments. The future direction is to improve efficiency and safety, but in the medical field, Whether it is traditional Chinese medicine and western medicine, it needs a lot of research and evidence to support it."# p#pagination title #e#

Some people are optimistic about this and believe that "aerosol medical treatment and aerosol beauty are probably the two last possible directions. If they are really realized, the value of Simor needs to be re-evaluated." However, some people also said,"In addition to e-cigarettes, there are really no scenarios or killer applications for other applications of atomization. I hope Simmore doesn't dig a hole himself."

Beauty starts from OEM

The beauty industry may have been chosen because this market is not yet saturated, and its development and segments are not dominated by giants. According to Deloitte's "China Medical Beauty Industry 2022 Annual Insight Report", my country's medical beauty started late and the penetration rate in 2019 was only 3.6%, while the penetration rates of Japan/United States/South Korea were 11%/17%/21% respectively during the same period.

The subdivision that Simmore has determined for himself is beauty atomization, which is based on the atomization field of its own advantages. It then extends its tentacles into the beauty industry. Unlike companies that directly enter the beauty industry to develop new products, Simmore's test of water is still stuck in the OEM industry that I am familiar with, but this time it is an OEM for beauty products.

According to public reports, Simmore's subsidiary Dongguan Siwell Technology Co., Ltd. provides OEM for the "Fog Yixi" beauty instrument. The report said that this is the first batch of products to use the ultrasonic atomization technology developed by Simmore. Dongguan Siwei's cosmetics production license has been approved by the Guangdong Province Drug Administration, and has obtained two unit cosmetics production qualifications: "General Liquid Unit (Skin Care Water) and Cream and Emulsion Unit (Skin Care Cleaning)". The certificate number is "Guangdong Cosmetic 20210230". The certificate is valid until August 19, 2026.

On the other hand, behind the "Wuyixi" atomizing beauty instrument is Shenzhen Wuyixi Technology Co., Ltd., Tianyan inspection shows that the company was established in 2022 and is located in Shenzhen, Guangdong Province. It is a company mainly engaged in research and experimental development.

Company registration information shows that Shenzhen Shuimu Biological Co., Ltd. and Ningbo Yueran Enterprise Management Partnership (Limited Partnership) were invested and established, holding 60% and 40% respectively. At that time, some media pointed out that the actual controller of Ningbo Yueran might beYOOZthe founder ofCai yuedong, because Ningbo Yuoran's legal person is Cai Yuehang, who is also a member of Beijingqiwu technologyCo., Ltd., the legal representative of Bengbu Qiwu Electronic Technology. However, on March 8, 2023, the company's industrial and commercial registration information changed the names of two investment entities, and Shenzhen Shuimu Biological Co., Ltd. and Ningbo Yueran Enterprise Management Partnership (Limited Partnership) both withdrew from the company.

 Shenzhen Wuyixi Technology Co., Ltd. Information| Photo source: Sky Eye Inspection

In another introduction article about the "Wuyixi" product, it is clearly stated that "Wuyixi" will officially enter Tmall Mall on January 3, 2023, and will begin to promote it on social media such as Xiaohongshu.

One year later, Two Supremes found the above-mentioned store in Tmall Mall. The product page showed that there were three products. Among them, the highest-priced "Fog Yixi Atomizing Beauty Instrument" was priced at 1299 yuan, mainly aimed at women. On the detailed page of the product, the slogan "20 seconds a day, water and light muscles every day" is displayed. From the perspective of product form, the benchmark is traditional facial mask,"Using 20 seconds of fog Yixi is equivalent to using 1 facial mask."

   Introduction to Taobao details page| Source: Taobao

The product is equipped with equipment and two atomization chambers. Its sales data shows "Sold 1". No one commented on this product. The best-selling product in this store is an eye protection device, which displays "200+ sold" and is priced at 129 yuan.

 Introduction to Taobao details page| Source: Taobao

At present, these products are still on normal sales, but I am afraid the sales volume will not satisfy investors. Looking back at the release of the "Wuyixi" product, some media asked Simmore for confirmation, saying: "This beauty instrument product is indeed Simmore's atomization field. A new attempt... I also thank you for your attention and look forward to seeing more new atomization products with you in the future."

However, Simmore rarely announced its "beauty atomization" business since then. After reviewing Simmore's latest 2023 interim report, two people found that in the 70-page report,"beauty" was only included in "R & D and Development"."Appeared twice.# p#pagination title #e#

In a highly competitive and unpredictable market, every new attempt is not always a success. Simmore still has the opportunity to try and make mistakes, but market investors seem to be less optimistic about its performance. After another year, its share price almost halved, falling from 12 yuan per share to 5.3 yuan per share.

 Simmore International Stock Price Trend| Source: Google Finance

For Simmore's next step in expanding its beauty business, market demand and competition conditions need to be carefully evaluated. Two Priests will continue to pay attention to Simmore's latest developments to understand the company's future development strategy in the beauty business.