Core Viewpoint - Jefferies has initiated coverage on several leading companies in the tobacco industry, providing a mix of ratings including three "Buy" ratings, one "Hold" rating, and one "Underperform" rating, highlighting the sector's stable growth potential and defensive asset characteristics [1][2] Company Summaries - Philip Morris International (PM.US) received a "Buy" rating, with expectations of high single-digit (HSD) growth in EBITDA driven by its leadership in heated tobacco and oral nicotine pouch segments, despite its stock price being above the industry average [1] - Altria (MO.US) was assigned an "Underperform" rating with a target price of $50, facing risks of high single-digit (HSD) sales decline in combustible tobacco and challenges from consumer price pressures, although its traditional oral nicotine market position partially offsets growth potential in modern oral products [1] - Imperial Brands (IMBBY.US) also received a "Buy" rating, noting improvements in combustible tobacco market share and successful execution of its smoke-free product strategy, particularly in the U.S. modern oral product sector [2] - Japan Tobacco (JAPAY.US) was given a "Hold" rating, with attractive strategic positioning in emerging markets and healthy core combustible tobacco business, supported by global flagship brand growth in developed markets [2] - British American Tobacco (BTI.US) is highlighted as a preferred choice in the tobacco sector, with Philip Morris International also achieving the highest quantitative score on the Seeking Alpha platform, indicating strong market recognition [2]

Investment Rating - The industry rating is "Outperform the Market" (first time) [7] Core Insights - British American Tobacco and Japan Tobacco International are actively capturing the heated tobacco market in Japan and South Korea, with British American Tobacco's new product Glo Hilo set for nationwide launch in Japan on September 1, 2025 [1] - Japan's market for smoke-free products has surpassed traditional cigarettes, with forecasts indicating that Philip Morris International will hold a 69.8% market share in heated tobacco by 2024, while British American Tobacco is expected to maintain a 16.3% share [1] - Japan Tobacco International plans to invest approximately 650 billion yen (about 4.4 billion USD) from 2025 to 2027, aiming for a 10% global market share in heated not burned (HNB) products by 2028 [2] - The market share of heated not burned products in South Korea has increased ninefold over seven years, from 2.2% in 2017 to 18.4% in 2024, indicating significant growth potential [3] - In the first five months of 2025, China's e-cigarette exports amounted to 4.054 billion USD, with May exports reaching 812 million USD, reflecting a year-on-year decline of 19.52% [4] Summary by Sections British American Tobacco - The Glo Hilo product utilizes infrared quartz heating technology, reaching 370 degrees Celsius in five seconds, and is priced at 3,980 yen (approximately 25 USD) [1] - The product's trial in Miyagi Prefecture was successful, leading to a nationwide rollout [1] Japan Tobacco International - The company is focusing on product innovation and channel expansion in South Korea, including the re-launch of Ploom X Advanced and the introduction of limited edition devices [2][3] - The strategy includes enhancing online and offline sales channels and responding to local consumer demands [3] E-Cigarette Market - The e-cigarette export value from China has been affected by US-China trade tensions, with a notable decline in exports to the US [4] - The Middle East market is experiencing rapid growth, with the UAE becoming a significant destination for e-cigarette exports [4] Investment Opportunities - Suggested companies to watch in the vaping supply chain include Smoore International, Jincheng Pharmaceutical, and others [5]

Core Insights - Finding reliable cigarette wholesale manufacturers is challenging due to the overwhelming number of businesses in the market [1] - The article provides various methods to locate these manufacturers' contact information [3][4][5][6][7][8] Group 1: Methods to Find Manufacturers - Industry exhibitions offer excellent opportunities for face-to-face communication with manufacturers, allowing for direct acquisition of contact information [3] - Joining local tobacco industry associations or chambers can provide access to reliable manufacturer lists and contacts [3] - Online platforms, including search engines and B2B sites like Alibaba, are essential tools for finding manufacturer information [4] Group 2: Traditional and Personal Approaches - Traditional media such as industry magazines and newspapers still hold value, often publishing advertisements and contact details of manufacturers [5] - Leveraging personal networks through friends and industry colleagues can yield trustworthy manufacturer contacts [6] - Conducting on-site visits to manufacturers allows for firsthand assessment of their capabilities and direct communication with management [7] Conclusion - The search for cigarette wholesale manufacturers' contact information can be effectively accomplished using various strategies, each with its unique advantages [8]

Core Viewpoint - The World Health Organization (WHO) has launched the "3by35" initiative, aiming to increase the actual prices of tobacco, alcohol, and sugary drinks by at least 50% by 2035 through health taxes, which will help curb chronic diseases and generate significant public revenue [1][2]. Group 1 - The "3by35" initiative is expected to raise $1 trillion by 2035, based on evidence from countries like Colombia and South Africa [1][2]. - WHO emphasizes that health taxes are one of the most effective tools to reduce harmful product consumption and generate revenue for reinvestment in healthcare, education, and social security [1]. - WHO's Director-General highlighted the need for governments to adapt to new realities and strengthen their health systems using the funds raised from these taxes [2]. Group 2 - The initiative is the first to propose a specific price increase target for tobacco, alcohol, and sugary drinks, despite WHO's long-standing support for tobacco taxes and recent calls for taxing alcohol and sugary beverages [2]. - WHO encourages governments to review and avoid tax exemptions for unhealthy industries, which could undermine national health goals [2]. - The initiative has received support from organizations such as Bloomberg Philanthropies, the World Bank, and the OECD, which will assist countries willing to take action [4].

Core Viewpoint - The World Health Organization (WHO) has launched an initiative calling for countries to significantly increase taxes on tobacco, alcohol, and sugary drinks to boost public revenue and reduce chronic diseases [1] Group 1: Initiative Details - The initiative is named "Three Three Five," which aims to implement three health taxes by 2035 [1] - The goal is to raise the actual prices of at least one, two, or all three categories of unhealthy products by at least 50% by 2035 [1] - Specific measures will be tailored to the different national contexts of each country [1] Group 2: Expected Outcomes - The WHO estimates that this initiative could generate an additional $1 trillion in public revenue globally over the next decade while reducing the consumption of unhealthy products [1]

Market Insights - The US ADP employment numbers unexpectedly decreased by 33,000 in June, marking the first negative growth since March 2023, with a prior expectation of an increase of 98,000. The revised May data showed an increase of only 29,000 [1][2] - A group of billionaires from Silicon Valley has applied for a charter bank license in the US, aiming to establish a national bank focused on supporting startups in the cryptocurrency sector [1] - The UN reported that 2023 has seen some of the most extensive and destructive droughts on record, highlighting severe challenges posed by climate change and resource pressures [1] Economic Indicators - Australia's retail sales increased by 0.2% month-on-month in May, recovering from zero growth in the previous month but falling short of the market expectation of 0.5% [3] - South Korea's Consumer Price Index (CPI) rose by 2.2% year-on-year in June, surpassing the market expectation of 2.1% and marking a return to above 2% inflation after two months [4] Commodity Prices - COMEX gold futures rose by 0.56% to $3,368.7 per ounce, while COMEX silver futures increased by 1.08% to $36.79 per ounce [6] - Light crude oil futures for August delivery increased by $2.00 to $67.45 per barrel, a rise of 3.06%, while Brent crude oil futures for September delivery also rose by $2.00 to $69.11 per barrel, up 2.98% [6] Currency Exchange Rates - The US dollar index fell by 0.05% to 96.777, with the euro trading at 1.1800 against the dollar, up from 1.1781, and the British pound at 1.3636, down from 1.3738 [7] - The onshore Chinese yuan closed at 7.1670 against the dollar, down 52 basis points from the previous trading day [7]

Investment Rating - The report maintains an "Overweight" rating for the retail industry [1] Core Insights - The introduction of the new heated non-combustible (HNB) products, Glo Hilo and Glo Hilo Plus, by British American Tobacco (BAT) in Japan is expected to drive growth in the HNB market, which is projected to reach a retail value of $389 billion by 2024 [4][11] - The Hilo product has received positive feedback during its trial phase, indicating a potential for rapid sales growth as it enters the broader Japanese market [10] - The global tobacco industry is nearing a trillion-dollar valuation, with new tobacco products expected to capture a larger market share as companies pivot towards harm reduction strategies [11] Industry Trends - The HNB market is anticipated to grow significantly, with BAT and other major tobacco companies increasing their focus on HNB products to facilitate a transition to smoke-free alternatives [11] - The market share for HNB products is currently dominated by Philip Morris International (71%), followed by British American Tobacco (16%) and Japan Tobacco (6%) [11] - The report suggests monitoring companies linked to BAT's HNB products, such as Smoore International, and other key players in the new tobacco product space [11] Market Performance - The report notes that the retail index increased by 4.56% during the week of June 23 to June 27, 2025, while the overall market indices also showed positive performance [12][14] - Year-to-date performance for the retail index stands at a 9.49% increase, indicating a favorable market environment for the retail sector [12][16] Company Valuation - The report includes a valuation table for various companies within the industry, highlighting their market capitalization, earnings projections, and investment ratings [18] - Notable companies such as Proya (P/E of 21), Betaini (P/E of 37), and Marubi (P/E of 48) are recommended for investment, indicating strong growth potential [18]

Summary of Key Points from Conference Call Records Industry Overview - **Consumer Sector**: The consumer sector in China is currently facing challenges due to a lack of growth engines, but there are signs of recovery driven by export growth and improvements in domestic economic activities. [1][4] - **Retail Sector**: The retail sector is experiencing supply surplus and insufficient demand, necessitating a focus on new demand opportunities, including traditional channel transformations and the rise of instant retail. [1][7] Core Insights and Arguments - **Economic Recovery**: The recovery of exports is expected to positively impact domestic economic activities and consumption, with a notable rebound in personal income tax indicating a gradual recovery in residents' income. [1][4] - **Investment Strategy**: In July, the investment strategy should avoid liquidity-driven assets and focus on service consumption and high-turnover goods that are less affected by liquidity pressures. [1][4] - **New Consumption Trends**: New consumption is identified as a key growth driver for the next two to three years, emphasizing the creation of new consumption scenarios and business models, particularly in high-turnover and low-leverage service consumption. [1][5][6] Specific Areas of Focus - **Service Consumption**: Investment opportunities in the consumer sector are concentrated in emotional value consumption (e.g., trendy toys, pets) and functional value consumption (e.g., AI-related products). [6] - **Cross-Border Trade**: Companies engaged in cross-border trade should focus on supply chain management, brand premium capabilities, and channel premium capabilities due to tightening trade policies. [8] - **E-commerce Performance**: The 2025 618 e-commerce promotion met expectations, with Douyin's growth exceeding forecasts, highlighting a trend of collaboration across platforms. Instant retail channels performed exceptionally well during this event. [9][10] Additional Important Insights - **Tobacco Industry**: The tobacco industry is showing a stable upward trend, with new products like Glohilo from British American Tobacco expected to perform well in Japan. [3][11][12] - **Home Appliances**: The home appliance sector is expected to see double-digit growth driven by national policy support, with leading companies using pricing strategies to enhance market share. [3][22] - **Household Goods**: The household goods sector is stabilizing at the bottom, with a focus on companies that can demonstrate alpha capabilities. [3][13] - **Competition in Cleaning Appliances**: The competition in the cleaning appliance sector is easing, benefiting companies like Roborock and Ecovacs, with expectations of rising industry profit margins. [3][20] Conclusion The conference call highlighted the complexities and opportunities within various sectors of the Chinese economy, particularly in consumer and retail markets. The focus on new consumption trends, service-oriented products, and strategic adjustments in response to economic conditions will be crucial for navigating the current landscape.

Core Viewpoint - The successful issuance of the data property registration certificate to Shandong Yantai Tobacco Co., Ltd. marks a significant advancement in data rights recognition and management within the tobacco industry, facilitating data circulation and transaction [1][2]. Group 1: Data Property Registration - The data property registration certificate is the first of its kind in the tobacco industry, providing authoritative recognition of Yantai Tobacco's legal ownership of specific data resources [1][2]. - The registration process involved multiple institutions, including legal and data judicial appraisal entities, ensuring a comprehensive evaluation of data rights [1]. - The introduction of blockchain technology and electronic data judicial appraisal enhances the legal validity of the data property registration, providing a solid judicial guarantee for market-oriented data circulation [1]. Group 2: Data Resource and Utilization - The "Yantai Tobacco Consumption Domain Data Set" is a high-value, anonymized data resource developed through deep governance, compliant with national standards [2]. - The company has pioneered the "Unified ID" technology, enabling seamless data integration across various sectors, which enhances consumer identification and data sharing [2]. - This data set allows Yantai Tobacco to accurately understand consumption trends, facilitating targeted marketing and the development of a digital retail ecosystem characterized by cross-industry marketing and resource sharing [2].

Core Viewpoint - The Hanyang Tobacco Bureau in Wuhan is committed to enforcing tobacco regulations through innovative approaches, focusing on cutting illegal cigarette circulation while protecting consumer rights [1] Group 1: Logistics and Illegal Circulation - Hanyang Tobacco has established a comprehensive regulatory network to cut off illegal cigarette circulation by leveraging a smart platform that integrates data from various departments [2] - A closed-loop process for identifying and handling high-risk packages has been implemented, involving police, postal services, and traffic departments [2] - Regular training sessions for logistics personnel enhance their ability to identify counterfeit products, integrating legal education into daily operations [2] Group 2: Market Management and Retail Oversight - The introduction of a traceability system using QR codes allows consumers to verify the supply chain and credit ratings of retailers [3] - A grid-based and information-driven management model is employed to monitor over 4,000 retail outlets, with real-time alerts for unusual ordering patterns [3] - The combination of daily inspections and targeted controls has effectively regulated retail operations [3] Group 3: Community Engagement and Law Enforcement - Hanyang Tobacco collaborates with law enforcement to conduct educational campaigns that raise awareness about the dangers of counterfeit cigarettes [4] - A network of community information officers has been established to facilitate legal education and encourage public participation in reporting illegal activities [4] - The dual approach of enforcement and education fosters a community-driven regulatory environment [4] Group 4: Overall Regulatory Framework - The comprehensive governance system integrates technology, collaborative enforcement, and public education to maintain order in the tobacco market [5] - This multi-dimensional approach is leading Hanyang Tobacco's regulatory efforts towards a more standardized, intelligent, and socially integrated model [5]