Goldman Sachs Group “call” electronic cigarette prospects

Tobacco According to the “Tobacco” report compiled on August 7, Goldman Sachs analysts said they continue to call “the tobacco industry has the potential to change” electronic cigarette category development prospects. However, they noted that not all tobacco companies are able to receive the same benefits, because the electronic cigarette growth may also accelerate the decline of traditional cigarettes.

Electronic cigarettes in the United States throughout the tobacco industry’s share of sales of less than 1%. Goldman Sachs believes that by 2020, the electronic cigarette tobacco sales may account for 19% of the entire tobacco industry sales reached 10%, but for growth based on traditional electronic cigarette cigarette as consideration in 2020, the traditional tobacco cigarettes in the whole The share of industry profits in the pool is expected to decline from the current 82% to 63%.

Analysts said that due to the awareness of people on the electronic cigarette continues to grow, together with test marketing of electronic cigarettes and electronic cigarettes used repeatedly in the past two years, the electronic cigarette sales are doubling every year. They also added that the electronic cigarette seems “good profit growth in the tobacco industry to prolong the duration, and even speed up the whole tobacco industry to prepare for profitable growth.”

Analysts say, the equivalent of a pack of traditional cigarettes Electronic Cigarette also has the potential to generate higher profits because they do not pay “Settlement Agreement” settlement payment, and may also be subject to a lower tax rate.

Analysts say they believe Lorillard electronic cigarettes in the most favorable position aspect, because it “has a first-mover advantage”, but also for their role in cigarette replacement is also very limited, and Altria due profits in the cigarette industry has a 55% share, so it suffered the greatest risk.