Vape stocks hit setbacks as soon as they debut

The Ministry of Industry and Information Technology released a draft opinion on the revision of the Tobacco Law. Although it is only for comments and no decision has been made, one of the new regulations has caused a huge shock in the vape industry. The original text of this new regulation is: New tobacco products such as vape shall be implemented in accordance with the relevant regulations on cigarettes in this regulation.

This sentence means that vape may be managed like cigarettes in the future, and accordingly, a series of rules and regulations such as vape licenses, quality supervision, and consumer rights will also be introduced. In the follow-up, whether it is a vape manufacturer or an e-liquid manufacturer, it must have a tobacco production license before it can produce and sell it. When purchasing or custom e-liquid, it must also follow the e-liquid with a production license. Only liquid manufacturers can do it. This kind of negative situation, which is still in the savage growth period of the vape market, is simply a thunder in the daytime.

The first one to be frightened by the thunder is Fogcore Technology, which is listed on the US stock market. Its stock price plummeted 47.84% last night, almost cut in half, and its market value evaporated by 14.458 billion US dollars, equivalent to 94.032 billion yuan. Although the vape market is currently a vague field, Fogcore Technology has received an angel round investment of 38 million yuan led by Source Capital, IDG, and Sequoia China at the beginning of its establishment. Everbright Securities once pointed out that York, a subsidiary of Wuxin Technology, is the leading brand of electronic atomization cigarettes in China, with a market share of 62.6% as of September 30, 2020, and more than 5,000 specialty stores. Anyone who has smoked vape should know this brand.

In addition to companies that are positively related to vape, there are also AH-share listed companies that have equity relationships with vape companies, which have also been affected. For example, Aisidi, which previously announced the business cooperation with Wuxin Technology, was sealed at the daily limit today. A smaller international company that also makes vape atomization equipment in Hong Kong stocks also plummeted 27.22% today.

In addition, there is also Yiwei Lithium Energy in the GEM. Today, I felt the fear of 20cm in the market, and I almost ate the limit. Fortunately, it finally pulled back and closed down 15.85%, which was also miserable. Some veterans may ask, can Yiwei Lithium engage in new energy? How did you get "ambiguous" with vape? No, because Yiwei Lithium started to "play" vape ten years ago. In 2014, Yiwei Lithium Energy acquired 50.1% of the equity of Mcwell with a cash consideration of 439 million yuan, and the latter Mcwell is one of the largest vape batch developers and manufacturers in the world, so this wave of vape disturbances, Yiwei Lithium Can or cannot be spared.

Then, I went to check the related funds of the heavyweight Yiwei Lithium Energy, and found that there were 223 funds with a net value of more than 5%, and the fund managed by Liu, the star fund manager of GF, ranked first. Because there are many funds, I will not list them one by one. Those who are interested can read the original text in the lower left corner of the article. I put the query link there.

There is also a self-examination method similar to this mine-stepping incident, that is, you can check your own fund positions to see if Yiwei has lithium energy. If so, just check whether the position is heavy or not, which is faster and more intuitive. At this time, it is estimated that many veterans will ask: If I hold related funds, should I run or stay? How should I say it? In this case, you've already suffered the net loss of bad news, so it's actually a bit late to consider running away. If it is a new energy index fund, then you don't need it at all, because it is relatively scattered. Your main energy should be on the news of the new energy industry.

If active funds hold relevant thundering stocks, it also depends on the market's reaction to this negative follow-up. Under normal circumstances, the introduction of regulatory policies is not good for savagely growing companies in the short term, but it will also raise the threshold for other motley crews. Therefore, in the long run, this industry will become more and more standardized, and some early-running companies that have already occupied the market will also have a certain head advantage, so long-term investors do not need to be too anxious.