GUOTAI HAITONG SECURITIES·2025-10-24 06:42Investment Rating - The report assigns an "Overweight" rating for the new tobacco industry, particularly focusing on the new oral nicotine pouch segment [3]. Core Insights - The industry is experiencing clear trends driven by supply-demand dynamics, leading to accelerated growth in the new tobacco sector, with international tobacco giants increasing their investments [2]. - New oral nicotine products, which combine characteristics of heated non-combustible and vaporized electronic cigarettes, are gaining popularity due to their flavor variety and convenience, presenting a significant market opportunity [3][58]. - The report highlights that the new oral nicotine segment is expected to have the highest gross margins among new tobacco products, making it an attractive area for investment [3]. Summary by Sections 1. Oral Tobacco Industry - The global penetration rate for oral tobacco is currently at 1%, with a projected CAGR of 27% from 2023 to 2028, indicating strong growth potential [18][58]. - New oral nicotine products are expected to grow at a CAGR of 35% during the same period, with the market size reaching €15 billion by 2028 [18]. 2. Traditional Oral Tobacco - Traditional oral tobacco products have a focused audience and are primarily used in specific scenarios, with historical roots in Sweden and North America [54]. 3. New Oral Tobacco - The introduction of nicotine pouches, such as ZYN by Swedish Match, has marked the beginning of a new market segment, with significant growth observed in the U.S. market [58]. - The new oral tobacco products are characterized by their non-tobacco composition, lower health risks, and a variety of flavors, which cater to diverse consumer preferences [58][61]. 4. Industry Leaders - Philip Morris International (PMI): After acquiring Swedish Match for $16 billion, PMI has established itself as a global leader in the new oral tobacco market, with a market share of 42% [76][78]. - Altria: Focused on the U.S. market, Altria's new oral tobacco brand "On!" has seen a CAGR of 49% from 2021 to 2024 [81]. - British American Tobacco (BAT): Concentrating on the European market, BAT holds a significant share in the new oral tobacco segment, particularly in six core markets [84]. - Haypp Group: A leading online sales platform for nicotine pouches, Haypp is expected to achieve a revenue of 5 billion Swedish Krona in 2025, reflecting the industry's high growth potential [90][93]. 5. Valuation Review - The new oral tobacco segment is becoming a crucial valuation driver for companies in the tobacco industry, with significant investments and acquisitions indicating strong future prospects [3][22].