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When I lived in Guangzhou I was told the expression came from Hong Kong and stood for "Algebraic Average". That also doesn't sound like something a native English speaker would come up with, however I don't think that's a reason to discount it (or even the other suggestions) if it came from Hong Kong where non-native English speakers come up with all sorts ...

From Chinese wikipedia: “雪茄”这中文译名为徐志摩所译，音译之余，也取其灰白如雪，因以为名。 (Loose!) Translation: The Chinese translation 雪茄 was created by Xu Zhimo. In addition to the similarity of the sounds, the name also comes from the fact that its ash is white like snow. My dictionary confirms that it is a loanword from English. If wikipedia is to believed, it probably ...