Sinolink Securities released a research report stating that, based on the 2025 development plans of global tobacco giants, the decline in traditional cigarette sales has become an irreversible trend. Major tobacco companies are pivoting toward next-generation products (NGPs) as their core growth driver. Countries like the UK and France have fully banned disposable vapes, while the European market is transitioning toward pod-based, hybrid, and open-system products, reopening opportunities for compliant players.
In the heated tobacco (HNB) segment, tobacco giants are aggressively expanding. The U.S. market is expected to officially open in 2026, further boosting global penetration and creating significant expansion potential. With BAT’s Hilo demonstrating strong product performance and refined marketing strategies, it may reshape the current HNB competitive landscape. Key insights include:
**Philip Morris International (PMI):** - Q1-Q3 2025 NGP revenue reached $12.5 billion (+16.0% YoY), accounting for 41.3% of total revenue (+3.0pct YoY). Q3 revenue rose 18.9% YoY to $4.4 billion. - HNB shipment volume hit 116.7 billion units (+12.2% YoY), with Q3 shipments up 15.5% to 40.8 billion units. - IQOS’s global market share rose 0.5pct YoY to 5.8%, with gains in Japan (+1.7pct to 31.7%), Italy (+1.6pct to 18.2%), Poland (+0.9pct to 9.5%), and Germany (+0.6pct to 6.5%). - IQOS Iluma’s PMTA submission for U.S. approval is underway, with a potential 2026 launch offering substantial incremental growth. - Nicotine pouch sales grew 44.0% YoY to 660 million cans in Q1-Q3, with ZYN maintaining a dominant 66.8% U.S. market share.
**British American Tobacco (BAT):** - H1 2025 NGP revenue fell 1.2% YoY to £1.689 billion, driven by a 15.0% drop in vaping (to £756 million) and a 3.2% decline in HNB (to £454 million), offset by 36.5% growth in oral tobacco (to £479 million). - U.S. vaping sales dropped 13.4% YoY to 123 million units due to competition, illicit products, and inventory adjustments. - Glo’s HNB market share grew 0.4pct to 16.8% in key markets. Hilo’s rollout in Japan, Poland, and Italy since September 2025, backed by strong marketing, signals global expansion momentum.
**Altria:** - Q1-Q3 2025 oral tobacco revenue edged up 0.6% YoY to $2.096 billion, though Q3 fell 4.6% to $689 million due to volume declines and mix shifts toward lower-priced On! pouches. - On! sales rose 14.8% YoY to 134 million cans, with U.S. market share up 0.4pct to 8.7%. - NJOY ACE’s redesigned version, addressing patent disputes, may re-enter the U.S. market pending regulatory clearance.
**Imperial Brands:** - FY2025 NGP revenue grew 11.9% YoY to £368 million, led by Europe (+7.7% to £280 million). New blu kits (UK/France), Pulze 3.0 (Italy/Greece), and Zone upgrades drove stable growth.
**Japan Tobacco (JT):** - Q1-Q3 2025 NGP revenue surged 20.7% YoY to ¥91.3 billion, with volume up 27.0% to 10.1 billion units. Q3 revenue jumped 42.6% YoY to ¥35.5 billion. - Ploom Aura’s global launch (200K units sold by August) and ¥650 billion investment (2025–2027) underscore JT’s HNB focus.
**Investment Recommendations:**
- Top pick:
**Risks:** Regulatory crackdowns on illicit products, FX volatility, and PMTA rejections.
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