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IQOS supplier “Yingqu” stocks soared, heat-not-burn into a new trend in 2022?

By November 4, 2021Heat not burn news

As a business supplier of IQOS, Yingqu Technology’s highest stock price last year was 62.9 yuan per share on February 21, 2020. After that, the stock price fell successively. On December 30 last year, the stock price rebounded from the bottom of the downward trend. After that, it continued to rise, and the current market value of Yingqu Technology is 24.560 billion. According to the third quarter financial report of Yingqu Technology, the company achieved operating income of 2.602 billion yuan, an increase of 29.02% year-on-year; net profit was 650 million yuan, an increase of 7.31% year-on-year; earnings per share were 1.42 yuan.

Where does Yingqu Technology come from?

Yingqu Technology is a subsidiary of Malata Group. Speaking of Malata, we will definitely remember Malata’s VCD and DVD, which were once famous all over the country. The maker of this empire is Wu Huitian, who is known as the “godfather” of private enterprises in Zhangzhou. The actual controller of Yingqu Technology is Wu Kaiting, the son of Wu Huitian.
According to the information, Wu Kaiting was born in December 1969 and used the name Wu Yongbiao. He was a resident of Mainland China and obtained Hong Kong resident status in September 1997. He is currently the chairman of Yingqu Technology, and also serves as the vice chairman, chairman and general manager of Malata Group Co., Ltd.
After taking over Malata, Wu Kaiting implemented a series of reforms and innovations. In order to realize the transformation and upgrading of the company, he founded Yingqu Technology in 2011 and successfully went public in independent operation.
Yingqu Technology formally submitted a listing application to the China Securities Regulatory Commission in September 2017, and the first meeting was held in November. According to the prospectus, Yingqu Technology publicly issued 75 million shares at an issue price of RMB 22.5 per share. After the issuance, the total share capital was 455.16 million shares.
In 2017, the news that the artist Angelababy was smoking in the hotel earned a lot of attention, and then it was confirmed that it was an e-cigarette product called IQOS. IQOS is popular in the world and is known as the iPhone among e-cigarettes. As an important supplier of IQOS, Yingqu Technology also benefits greatly.
According to Yingqu Technology’s prospectus, electronic cigarette components account for more than 50% of its operating income. In 2015, 2016 and January-June 2017, the sales revenue of e-cigarette components accounted for 29.95%, 53.63%, and 73.17% of the operating revenue of innovative consumer electronic products, respectively. The gross profit margin of e-cigarette components was 49.37%, 66.78%, 66.91%.

On the first day of IPO of Yingqu Technology, the stock price rose sharply, reaching a maximum of RMB 100.8 per share.
At the same time, according to Yingqu Technology’s prospectus, the internationally well-known corporate clients that Yingqu Technology is currently serving include Logitech (customers for network remote controls, demonstrators and game controllers), WIK (first-tier supplier of Nestle coffee machines, corporate coffee Human-machine interface module product customers), Venture (PMI e-cigarette product first-level supplier, company e-cigarette component product customer), 3Dconnexion (3D mouse product customer), Asetek (water cooling control system product customer), etc.; in service The technology-based enterprise customers include Provo Craft (customer of household engraving machine products), Avegant (customer of VR glasses products), InteraXon (customer of brain wave monitoring sensor headband products), etc. In 2014, 2015, 2016 and January-June 2017, the company’s total sales to the top five customers accounted for 90.82%, 82.49%, 84.08% and 90.38% of the current operating income, respectively.

Reasons for the surge in Yingqu Technology’s stock price

After the e-cigarette industry “disconnected” in November last year, the US FDA recently officially banned the sale of flavored cartridges, and the entire industry was in a downturn. In the opinion of the Gewu consumer reporter, the reason for the rise in the stock price of Yingqu Technology is not unrelated to his being the main supplier of IQOS.
According to the description of Tao Ge, the trader of the public account, the current governments of various countries have different attitudes towards the regulation of new tobacco. However, in general, the main tobacco consumer countries have relatively strict monitoring of vaping e-cigarettes, and they are still further increasing. However, the attitude towards HNB (heat-not-burn tobacco products) is relatively open. As the world’s largest consumer of atomized e-cigarettes, the United States approved the launch of PMI’s heat-not-burn product IQOS in April 2019. With the opening of the US market, the scale of the HNB market will be further improved. In addition, IQOS has obtained sales access in 51 countries and regions worldwide. Although the overall market share of the global market is increasing year by year, there is more room for development in the future.
As the main supplier of IQOS, Yingqu Technology will directly benefit.
However, in the opinion of the Gewu consumer reporter, the stock price of Yingqu Technology has soared, which is also related to its other businesses, such as its intelligent manufacturing and Internet of Vehicles. The company provides Logitech, Nestle, Asetek, etc. with high-tech intelligent control components such as network remote controls, demonstrators, and game controllers. In 2018, the total revenue of this business was about 600 million. This makes it have greater advantages in product layout and anti-risk capabilities. At the same time, with the further expansion of global business this year, Yingqu Technology’s turnover is bound to expand further, and its stock price and market value will rise further.

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