Qusetion: Today’s stock price has fallen sharply. Is it related to the US FDA’s re-examination of non-tobacco-flavored electronic cigarettes before they can be listed? This is not a direct prohibition, but a post-approval listing. According to the inquiry, the relevant shares of major U.S. e-cig producers and the shares of tobacco companies have not changed, and even a considerable part of the shares have risen. Hope that Eve Battery and Smoore can interpret and analyze the impact of the news on the company’s subsequent operations and profits?.
Answer: Dear investors, hello! We read the full text of the news carefully. The theme of the news was that the FDA reported to President Trump the risks of flavored e-cigarettes and the actions to be taken. President Trump asked the FDA to do a good job. This is a new measure for FDA to consider strengthening the supervision of non-tobacco flavor electronic cigarette.
1. The company contacted Smoore in time to understand the impact on the market. Smoore’s response is based on the current information that
(1) FDA is not prohibiting electronic cigarettes, but is considering temporarily prohibiting the sale of non-tobacco-flavored electronic cigarettes, which can be re-sold after FDA approval.
(2) In the short run, Smoore’s pods products in the United States have some impact, but in the long run, the impact is not significant. American customers are actively preparing to submit FDA applications.
(3) The FDA and the Ministry of Public Health of the United States have defined the attributes of e-cigarette harm reduction, and retained e-cigarettes as a substitute for smoking hazard reduction products. There will be no change in the open policy.
2. The company only produces batteries for electronic atomizers of several large international tobacco companies, not involving the manufacture and sale of electronic cigarettes; the sales of lithium-ion batteries for electronic atomizers of the company accounted for about 8% of the annual sales in January-June 2019, accounting for a small proportion, with limited impact on the company.
3. Smoore manufactures electronic atomizer. The core technology is heating core technology, mainly ODM business model. For those companies with core technology and products that meet the requirements of international and domestic laws and regulations, the implementation of e-cigarette regulatory policy will play a positive role in the long run, which is conducive to the healthy development of Smoore. Thank you for your attention!