PMI’s 2020-year new tobacco contributed nearly a quarter of its revenue, and IQOS users reached 17.6 million

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Blue Hole New Consumer Report, February 17 news, today, Tianfeng Securities released Philip Morris International (PMI) 2020 new tobacco business analysis report. The report shows that by the end of 2020, the number of IQOS users has reached 17.6 million, an increase of 7.3% from the previous month, and the shipment of heating non-combustion products exceeded 76 billion, an increase of 27.6% from the same period last year. In addition, the global market share of IQOS cartridges has reached 3.0%. The following is the full text: Core view Heat non-combustion products will ship over 76 billion units in 2020, accounting for 23.8% of revenue The company’s total shipments of IQOS cigarettes in 2020 totaled 76.111 billion, a year-on-year increase of 27.6%; from the perspective of sales volume, IQOS cartridges have accounted for 10.8% of the company’s total shipments (including traditional cigarettes) (a year-on-year increase of 3pct); In terms of revenue, the hazard reduction product sector contributed US$6.8 billion in revenue to the company in 2020, accounting for 23.8% of revenue (a year-on-year increase of 5.1pct), continuing to hit the highest level in history; of which, the annual sales revenue of IQOS equipment totaled approximately 476 million US dollars, accounting for about 7% of the revenue of the harm reduction products segment, mainly due to the gradual decrease in the ratio of new users to existing users, longer equipment replacement cycles, and some regions still selling 2.4+ devices with lower prices. Eastern Europe launched lil SOLID brand heating non-combustion products. Among them, 21.709 billion units were shipped in Q4 in 2020, and the single-quarter shipments remained the highest in history, +26.9% year-on-year and +14.46% month-on-month. As of the end of 2020, the number of IQOS users has reached 17.6 million, an increase of 7.3% from the previous month. Among them, the number of users who completely converted to IQOS consumption (that is, stop using traditional cigarettes) reached 12.7 million (72% retention rate); in 2020, The global market share of IQOS cartridges reached 3.0%, a year-on-year increase of 0.8pct. At present, IQOS has been sold in 64 countries and regions around the world. Specific to different regions: European Union: As of the end of 2020, the annual shipment of heat-not-burn cartridges reached 19.842 billion, +57.9% year-on-year; the average market share of heat-not-burn cartridges in the EU in 2020Q4 was 5.0%, +1.8pct year-on-year, MoM +1.1pct, in addition, Q4 retail sales increased 10.8% MoM. Japan: As of the end of 2020, the annual shipment of heat-not-burn cartridges was 28.9 billion, an increase of 11.9% year-on-year; in 2020Q4, benefiting from the rich product line of cartridges, the market share of IQOS cartridges in Japan reached 22.1% , +4.4pct year-on-year, an increase of 1.7pct month-on-month; in addition, in 2020Q4, heat-not-burn products accounted for more than 27% of the Japanese tobacco market. South Korea: As of the end of 2020, the annual shipment of heat-not-burn cartridges was 4.6 billion, a year-on-year decrease of 0.3%; in 2020Q4, the market share of IQOS cartridges in South Korea was 6.7%, +0.4ct year-on-year. Russia: As of the end of 2020, the annual shipment of heat-not-burn cartridges was 13.6 billion, an increase of 48.4% year-on-year, continuing the trend of high growth. Among them, the market share of IQOS cartridges in 2020Q4 was 7.2%, a year-on-year increase. 2.2pct, in addition, Q4 retail sales increased by 9.8% from the previous month. In addition, the company continues to enrich the product line under the IQOS brand, launching the first atomization product IQOS VEEV, which will be launched on pilot sales in New Zealand and the Czech Republic in August and December 2020. The brand is positioned as a mid-to-high-end atomization product. It will be launched in Italy and Finland in 2021. At the same time, the company remains optimistic about the goal of reaching 90-100 billion heat-not-burn cartridges in 2021. Risk warning: sales are less than expected, new tobacco policy risks, new product launches less than expected risks

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