How Investors Are Repricing the Global Tobacco Industry as Nicotine Markets Shift
Nicotine pouches may grow 30–50% annually, outpacing vaping and heated tobacco, as regulation reshapes tobacco company valuations, CCB International's Charlie Chen says.Summary
Charlie Chen, Head of Research at CCB International Securities, forecasts annual global growth of 30–50% for nicotine pouches, outpacing vaping and heated tobacco, which he expects to grow at mid- to high-single-digit rates. He estimates the global nicotine pouch market at roughly $5–6 billion in ex-factory sales, with retail sales above $10 billion. For vaping, he sees the compliant segment growing more than 10% as U.S. enforcement against noncompliant products—estimated at 70–80% of the global vaping market—increases, though consumer demand may not automatically shift to authorized alternatives. Regulation enters valuations through adjusted revenue forecasts and valuation multiples, and CCB International applies different methods to different companies: EV/EBITDA for RELX due to its large cash reserves, P/E for BAT, and a sum-of-the-parts approach for Smoore. Multinational tobacco groups benefit from distribution networks and regulatory experience, while Chinese companies excel in technology, manufacturing and flexible business models. Chen highlights three areas to watch: U.S. vaping enforcement, nicotine pouch regulation, and industry consolidation through M&A.
(Source：2Firsts)
