Group 1: Company Updates - RLX Technology (RLX.US) shares rose over 3% to $2.37 following the announcement of an extension of its existing stock repurchase plan until December 31, 2027 [1] - The current stock repurchase plan, initially established in December 2021, was extended in December 2023, allowing the company to repurchase up to $500 million of its American Depositary Shares (ADS) by December 31, 2025 [1] - As of December 31, 2025, the company has repurchased approximately 170 million ADS, totaling around $330 million, leaving a remaining unused quota of approximately $170 million [1] Group 2: Industry Regulations - The National Tobacco Monopoly Administration has solicited opinions on a draft notice regarding the implementation of electronic cigarette industry policies to further promote supply-demand balance [2] - The draft notice emphasizes the need for capacity regulation in the electronic cigarette industry, advocating for supply-side structural reforms driven by market demand [2] - It outlines that electronic cigarette production enterprises must operate within their approved capacity and prohibits production beyond this limit, with provisions for capacity adjustment through formal application processes [2]

Investment Rating - The investment rating for Smoore International (06969) is maintained as "Buy" [7] Core Views - The report highlights the gradual improvement in electronic cigarette regulations, emphasizing the bottom value of Smoore International as a compliant market leader poised to benefit from the changing supply landscape [2][3] - The report anticipates significant revenue growth for Smoore International, projecting revenues of HK$141.32 billion, HK$163.76 billion, and HK$195.88 billion for 2025, 2026, and 2027 respectively, with year-on-year growth rates of +19.78%, +15.88%, and +19.62% [11] Summary by Sections Regulatory Environment - Recent regulatory developments include a comprehensive crackdown on illegal electronic cigarette activities, with the government emphasizing the need for stricter oversight and compliance in production and sales [2] - The National Tobacco Monopoly Administration has initiated measures to curb excessive competition and prevent overcapacity in the electronic cigarette industry [2] Market Performance - British American Tobacco's Hilo brand is expected to see positive growth, with new product launches in various countries contributing to revenue increases [3] - The report notes a recovery in the vaping segment, with improved sales for the Vuse brand in the U.S. due to enforcement actions against illegal products [4] Financial Highlights - Smoore International executed significant share buybacks totaling approximately HK$1.99 billion, reflecting confidence in its long-term growth prospects [5] - The forecasted net profit for Smoore International is projected to be HK$9.13 billion, HK$18.46 billion, and HK$26.75 billion for 2025, 2026, and 2027, with respective growth rates of -29.94%, +102.23%, and +44.87% [11]

Investment Rating - The report maintains a "Positive" investment rating for the new tobacco industry [9]. Core Insights - The National Tobacco Monopoly Administration has issued a notice to implement electronic cigarette industry policies, aiming to regulate industry operations, curb excessive competition, prevent overcapacity risks, and enhance compliance among electronic cigarette manufacturers [2][6]. - The notice emphasizes the need for investment behavior regulation among electronic cigarette manufacturers, including requirements for new projects, technological renovations, relocations, and resuming construction [7]. - Key changes and impacts include: 1. Support for the exit of outdated and excess production capacity, benefiting large-scale electronic cigarette enterprises. As of January 2025, there are approximately 583 licensed electronic cigarette manufacturers in China, and the notice aims to facilitate the exit of inefficient capacity, allowing leading companies to consolidate and enhance their market position [7]. 2. Implementation of capacity quota management and increased compliance requirements for exports. The notice specifies that production capacity must be regulated, and companies focusing on exports must ensure that their products comply with the laws and regulations of the destination countries or regions [7]. 3. Separation of management for heated tobacco products and electronic cigarettes, indicating potential future changes in the new tobacco industry [7]. Summary by Sections - **Investment Opportunities**: The acceleration of globalization in the new tobacco sector presents investment opportunities for companies with core barriers or resource advantages. Key companies to watch include Smoore International (leading in electronic vaporization devices), China Tobacco Hong Kong (supporting China Tobacco's international mission), Hengfeng Paper (an undervalued player in the heated tobacco industry), and others involved in heated tobacco solutions or manufacturing [8]. - **Market Dynamics**: The notice aims to balance supply and demand in the electronic cigarette market, clarifying production scale requirements and adjustments, while also addressing the need to prevent overcapacity risks [12].

2025年12月25日，国家烟草专卖局发布《关于落实电子烟产业政策 进一步推动供需动态平衡的通知 （征求意见稿）》（以下简称《通知》），以产能调控、供需平衡、合规升级为核心，旨在解决行业问 题。这一政策将强化政府对电子烟行业的调控能力，通过禁止新建项目和配额管理等手段规范行业发 展。 从政策导向来看，此次调控属于供给侧结构性改革，一方面通过总量控制遏制行业内卷，另一方面为合 规企业的产能优化预留发展空间。产能利用率低、缺乏技术优势的小作坊，或将面临淘汰或被整合的命 运。 此外，出口企业的合规成本将显著提升。新政要求出口企业证明产品符合目的地监管规则，同时严打虚 假报关、出口回流等违法违规行为。这将倒逼企业加大海外合规投入，搭建覆盖生产、报关、销售的全 链条合规体系；部分缺乏海外合规能力的出口企业可能被淘汰，将加速向合规化转型。国内市场监管此 前对出口部分管理并不严格，以企业根据海外市场情况自由发展居多，但是海外电子烟市场监管也日渐 严格，对一次性电子烟采取禁止措施成为主流，电子烟出口有不少灰色地带。 《通知》专设"打击出口回流"章节，将有效保护国内市场，缓解出口回流带来的竞争压力。此前，出口 海外的果味电子烟 ...

Core Viewpoint - The report from the National Tobacco Monopoly Administration highlights the regulatory status of e-cigarettes in China, indicating significant enforcement actions and the establishment of a comprehensive regulatory framework for the e-cigarette industry [1][2][3][4] Group 1: Regulatory Overview - Since the inclusion of e-cigarettes in regulation, a total of 19,896 administrative cases and 5,539 criminal cases have been handled, with 63.145 million illegal e-cigarette products seized and over 15 billion yuan involved in these cases [1][3] - The regulatory framework for e-cigarettes is based on the revised Tobacco Monopoly Law and includes the "1+2+N" system, which consists of the Tobacco Monopoly Law, the E-cigarette Management Measures, and mandatory national standards [1][2] Group 2: Market and Industry Dynamics - The e-cigarette market in China has seen a significant improvement in order, with key enterprises accounting for over 80% of domestic sales and nearly 60% of exports, indicating a rise in industry concentration and capacity utilization [4] - The introduction of a consumption tax on e-cigarettes since November 2022 aims to further regulate the industry and promote the exit of outdated production capacity [2] Group 3: Enforcement and Compliance - A comprehensive enforcement system has been established, focusing on online and offline control, resulting in the seizure of 63.145 million illegal products and the prosecution of 3,834 individuals [3] - The regulatory measures include a ban on the sale of flavored e-cigarettes and the inclusion of non-nicotine e-cigarettes under regulatory oversight, ensuring a broad scope of control [2] Group 4: International Cooperation - China is actively participating in the formulation of international e-cigarette standards, with experts involved in international standardization efforts and cooperation with countries like Australia and the EU to combat e-cigarette smuggling [3]

格隆汇12月27日｜国家烟草专卖局电子烟监督管理司发布《电子烟监督管理状况》，在执法打击方面， 累计查处电子烟行政案件19896起、刑事案件5539起，查获非法产品6314.5万个，涉案金额超150亿元， 3834人被追究刑事责任。针对"奶茶杯""可乐罐"等变异产品，持续开展专项整治，有效遏制非法产品蔓 延势头。 ...

Core Viewpoint - The National Tobacco Monopoly Administration has implemented multiple rounds of special governance actions to regulate the electronic cigarette industry, focusing on protecting minors and combating illegal activities related to e-cigarettes [1] Group 1: Regulatory Actions - In 2021, the "Guarding Growth" special action was launched, followed by a crackdown on sales of e-cigarettes to minors in 2022 [1] - From 2022 to 2023, special governance actions targeting flavored e-cigarettes, such as "Milk Tea Cup" and "Cola Can," were conducted [1] - In 2024, a new initiative will focus on protecting minors from e-cigarette harm and addressing the online sale of mutated e-cigarette products [1] Group 2: Enforcement Statistics - Over the course of these governance actions, more than 25,000 e-cigarette retail outlets near primary and secondary schools and kindergartens have been cleared [1] - More than 1,200 cases of selling e-cigarettes to minors have been investigated [1] - A total of 19,896 administrative cases and 5,539 criminal cases related to e-cigarettes have been handled, with 63.145 million illegal e-cigarette products seized and over 15 billion yuan involved in the cases [1]

Group 1: Industry Overview - The report highlights that domestic discrete device manufacturers, such as Shenzhen Hekaitai, are increasing prices for thick film chip resistors by 8%-20% and semiconductor devices by 5%-20% due to significant rises in global metal raw material prices, particularly copper, silver, palladium, ruthenium, nickel, and tin [2] - The electronic cigarette industry is facing stricter regulations as the National Tobacco Monopoly Administration has proposed a notice to regulate production investments, limiting new projects and capacity increases, which is expected to intensify competition within the industry [2] Group 2: Advanced Manufacturing - Hualian Holdings has acquired a high-quality salt lake resource project in Argentina, with approximately 4.122 million tons of lithium carbonate equivalent (LCE) resources, positioning it among the top tier globally. The project's disclosed production cost is about 38,000 yuan per ton, making it highly competitive [5] - The report notes a shift in the competitive landscape for lithium resources, with salt lake lithium extraction emerging as the most profitable and advantageous method, especially as high-cost resources are phased out [5] Group 3: Consumer Sector - The film market is experiencing a significant recovery, with total box office revenue reaching 51.074 billion yuan as of December 23, 2025, surpassing the same period in 2024. The holiday season is identified as a key growth driver, with a diverse range of films catering to various audience preferences [7] - Several major films are set to release at the end of December 2025, which is expected to further boost box office performance and benefit film production and cinema sectors, highlighting the strategic importance of upcoming releases [8]

Report Summary 1. Report Industry Investment Rating - Not mentioned in the report. 2. Core Viewpoints - The upstream prices are showing a differentiated trend, with nickel prices rising, egg prices falling, and oil and liquefied natural gas prices dropping. The mid - stream has a low - season for chemical product production, increased coal consumption in power plants, and low asphalt construction rates. The downstream real - estate market is warming up, while domestic flight frequencies are decreasing [1][2][3]. 3. Summary by Related Catalogs Upstream - **Non - ferrous Metals**: Nickel prices have rebounded significantly, with the price on December 25th at 127,383.3 yuan/ton, a year - on - year increase of 5.79% [2][37]. - **Agriculture**: Egg prices declined on the previous day, with the spot price on December 25th at 6.3 yuan/kg, a year - on - year decrease of 5.02% [2][37]. - **Energy**: Crude oil prices have corrected, and liquefied natural gas prices have continued to decline. The spot price of WTI crude oil on December 25th was 58.4 dollars/barrel, a year - on - year increase of 4.55%, and the spot price of liquefied natural gas was 3,356 yuan/ton, a year - on - year increase of 7.34% [2][37]. Mid - stream - **Chemical Industry**: It is the off - season for chemical product production [3]. - **Energy**: Coal consumption in power plants has increased [3]. - **Infrastructure**: Asphalt construction rates are at a low level [3]. Downstream - **Real Estate**: The sales of commercial housing in first, second, and third - tier cities have continued to pick up [3]. - **Services**: The number of domestic flights has decreased [3]. Industry Events - **Production Industry**: On the afternoon of December 25th, four leading silicon wafer companies jointly raised their prices significantly, with an average increase of 12%. The average price increase of various silicon wafer models this week is between 3.3% - 9.8%, mainly due to the large increase in upstream silicon material prices. The National Tobacco Monopoly Administration is soliciting opinions on promoting the supply - demand balance of the e - cigarette market [1]. - **Service Industry**: The People's Bank of China and seven other departments have issued a document to support the construction of the New Western Land - Sea Corridor, including exploring digital financial international cooperation and promoting cross - border payments using central bank digital currencies [1].

Market Overview - The three major indices showed mixed performance, with the liquor sector experiencing significant declines. As of the market opening, the Shanghai Composite Index was at 3957.83, down 0.05%; the Shenzhen Component Index was at 13539.05, up 0.06%; and the ChiNext Index was at 3232.41, down 0.21% [1] Industry News - The Ministry of Commerce spokesperson stated that China is actively promoting and facilitating compliant trade regarding rare earth magnets [1] - The Ministry of Commerce also noted that China has lodged a serious representation to the U.S. regarding the announcement of additional 301 tariffs on certain Chinese semiconductor products [1] - The National Tobacco Monopoly Administration is soliciting opinions on a draft notice aimed at balancing supply and demand in the e-cigarette market and preventing disorderly competition [1] - Guangzhou has released measures to support the gaming and e-sports industry, with individual enterprises eligible for up to 10 million yuan in fiscal support annually [1] Company Announcements - Four leading silicon wafer companies have jointly raised their prices significantly, attributed to substantial increases in upstream silicon material costs [2] - Guotou Silver LOF announced a temporary suspension of trading on December 26 until 10:30 AM [3] - Water Well announced a clarification stating that reports of a potential acquisition by another liquor company are untrue [4] - Victory Energy announced delays in some fundraising projects, with expected usable status pushed to the end of 2027 [5] - Baichuan Qiancheng announced plans to acquire 100% of Zhonglian Century, which is expected to constitute a major asset restructuring [5] - The Central Bank of Egypt has lowered its benchmark interest rate by 100 basis points to 20%, against a market expectation of 21% [6] Economic Indicators - The Russian ruble has appreciated over 40% against the U.S. dollar since the beginning of the year, with the current exchange rate nearing 1 USD to 78 rubles, marking the strongest annual performance in 30 years [7] - Spot silver prices opened higher, breaking through $73 per ounce, reaching a new historical high [8] Analyst Insights - Analysts from Huashan Securities indicated that the market's core driving force will shift from liquidity-driven valuation expansion to a profit recovery cycle led by fundamentals, with structural changes in consumption, precise policy support, and widespread profit recovery as key pillars for navigating the market in 2026 [9] - Guotai Junan Securities reported on the speech by the CSRC Chairman at the 2025 Financial Street Forum, discussing key initiatives for high-quality development in the capital market, including the launch of the ChiNext reform and optimization of the North Exchange system [9] - Guotai Junan expects a new phase of rebalancing in investment and financing, with leading brokerages benefiting from enhanced client resources, professional service capabilities, and cross-border service capabilities [10]