Investment 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].

Investment Rating - Industry rating is maintained as "Outperform the Market" [9] Core Insights - The new tobacco market continues to grow, with heated tobacco products leading in market size and nicotine pouches experiencing the fastest growth [2][3] - The global tobacco market is undergoing significant changes, with Japan's tobacco business expanding rapidly [4] - The global supply of tobacco leaves is facing shortages, leading to widespread price increases across the industry [14] Summary by Sections Electronic Cigarettes - In 2024, global e-cigarette sales are projected to reach $23.04 billion, a year-on-year increase of 9.5% [3] - Sales of disposable e-cigarettes grew by 18.9% to 840 million units, generating $6.42 billion in revenue, up 19.6% [3] - Open system e-cigarettes saw sales of 85.16 million devices and 12.23 million liters of e-liquid, with revenues of $2.62 billion and $5.49 billion respectively [3] Traditional Tobacco Products - Traditional oral tobacco products, including chewing and snuff tobacco, are experiencing a decline, with 2024 sales expected to drop by 0.8% to 115,000 tons [3] - Revenue from traditional oral tobacco is projected to decrease by 0.1% to $13.82 billion [3] Nicotine Pouches - Nicotine pouch sales are expected to grow by 36.9% to 21.23 billion pouches in 2024, with revenue reaching $11.25 billion, a 51.0% increase [3] - The United States leads in nicotine pouch sales with 13.88 billion pouches sold [3] Heated Tobacco Products - Sales of heated tobacco products are projected to grow by 12.7% to $38.85 billion in 2024 [3] - The volume of heated tobacco devices sold is expected to increase by 11.7% to 45.26 million units, with revenue rising by 14.7% to $2.44 billion [3] Company Performance - Philip Morris International reported a net income of $14.66 billion from its smoke-free products, a 14.2% increase, accounting for 38.7% of total revenue [5] - British American Tobacco's Vuse e-cigarette sales declined by 5.9% to 616 million units, impacted by illegal disposable e-cigarettes in the U.S. [6] - Japan Tobacco's Ploom brand heated tobacco sales grew by 24.2% to 218,000 boxes, primarily driven by the Ploom X model [7] Market Dynamics - The global tobacco market is experiencing intense competition, with multinational companies showing divergent growth patterns [4] - The supply chain for tobacco is under pressure due to climate-related shortages and rising prices [14]