Saturday, June 22, 2024

Trillion-level capital group Zhongzhi Enterprise Group enters vape industry


The most low-key capital faction, Zhongzhi Enterprise Group (ZEG), has been running in the capital market for nearly 30 years. Its members are as many as 1000 companies. It has repeatedly operated over 100 listed companies and managed more than a trillion yuan of assets through multiple capital platforms.

Zhongzhi Enterprise Group already has trust, wealth company, merger and acquisition fund, new finance, new energy and mining sector. The non-controlling style company ZEG began to move from behind the scenes to the front desk since 2015, and participate in the operation of listed companies. ZEG, which is good at investing in listed companies by means of capital operation such as surprise acquisition of the target and participating in project matching financing, has changed its usual routine and frequently appeared in front of the world. First, it took over the voting rights of major shareholders, took over the stumbling * ST Yushun (002289.SZ), and then invested 168 million yuan to subscribe for new shares of Zhuoya Capital (08295.HK), becoming the company’s largest shareholder.

Recently, it has been accurately reported that ZEG has established a brand management company, and the brand management company will be involved in the brand capital operation of new tobacco categories, which means that the capital giants will also start to enter the vape industry chain.

Data show that from 2010 to 2018, global sales of e-cigarettes increased by nearly 20 times, with more than 35 million users of e-cigarettes. China produced more than 90% of total e-cigarettes in the world, but domestic market consumption only reached 6%, far less than the United States and the European Union market, even so, domestic e-cigarettes still have more than 50 billion markets!

Behind the concern of capital is the favorable development prospects of electronic cigarette industry. On the one hand, electronic cigarettes are becoming the synonym of fashion. They are similar to cigarettes in flavor and use, and have safer and healthier components. On the other hand, the world’s cigarette production is declining, while the sub-areas such as electronic cigarettes are facing high growth.

The production and manufacture of electronic cigarettes in China has formed a mature industrial chain system with broad prospects. E-cigarettes have attracted more and more attention from capitals. A large number of investment institutions in the consumer sector in the primary market are following the e-cigarettes field closely. Why such a trillion-level asset management group Zhongzhi Enterprise Group entered the market at this time? It should be attracted by the big cake as well apparently. But how will Zhongzhi Enterprise Group enter the vape market?

Judging from the way in which Zhongzhi Enterprise Group has been used by becoming the second major shareholder in recent years while participating the operation of listed companies, will ZEG join the operation of a domestic electronic cigarette brand by means of capital investment? If so, which brand will it be?

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