Australia markets open in 4 hours 15 minutes
  • ALL ORDS

    7,487.70
    -40.10 (-0.53%)
     
  • AUD/USD

    0.6689
    -0.0018 (-0.27%)
     
  • ASX 200

    7,291.30
    -34.30 (-0.47%)
     
  • OIL

    73.49
    -3.44 (-4.47%)
     
  • GOLD

    1,781.40
    +0.10 (+0.01%)
     
  • BTC-AUD

    25,348.29
    -365.74 (-1.42%)
     
  • CMC Crypto 200

    399.33
    -2.47 (-0.61%)
     

RLX Technology Announces Unaudited Second Quarter 2022 Financial Results

BEIJING, Sept. 21, 2022 /PRNewswire/ -- RLX Technology Inc. ("RLX Technology" or the "Company") (NYSE: RLX), a leading branded e-vapor company in China, today announced its unaudited financial results for the second quarter ended June 30, 2022.

Second Quarter 2022 Financial Highlights

  • Net revenues were RMB2,233.9 million (US$333.5 million), compared with RMB2,541.4 million in the same period of 2021.

  • Gross margin was 43.8%, compared with 45.1% in the same period of 2021.

  • U.S. GAAP net income was RMB441.6 million (US$65.9 million), compared with RMB824.3 million in the same period of 2021.

  • Non-GAAP net income[1] was RMB634.7million (US$94.8 million), compared with RMB651.8 million in the same period of 2021.

"Over the past several months, we have made meaningful strides in adapting our business and product development to the new regulatory framework. Specifically, we have obtained the License for Manufacturing Enterprise and received regulatory approvals for some of our new products, demonstrating our operational excellence and industry-leading R&D capabilities," said Ms. Ying (Kate) Wang, Co-founder, Chairperson of the Board of Directors, and CEO of RLX Technology. "Aligned with our efforts to comply with the new requirements, we remained dedicated to our core strategy, continuously investing in research and development. Since 2018, we have partnered with leading research institutions on scientific research and product development, laying a solid foundation for our sustainable future growth. Furthermore, amid the evolving e-vapor market and volatile macro conditions, we continued to streamline our business structure and optimize our operational processes, comprehensively enhancing our agility and efficiency. As always, we remain committed to fulfilling our users' demands for safe, high-quality products in strict compliance with regulatory requirements."

"We are pleased that we recorded net revenues of RMB2.2 billion in the second quarter. We believe this elevated level of revenue in the second quarter was primarily due to frontloading of sales in the downstream value chain in anticipation of the discontinuation of our older products as the industry transition period nears its end in the third quarter. Meanwhile, our ongoing efforts to optimize cost structure and maximize operational efficiency paid off in the second quarter. Non-GAAP expense ratio was down quarter over quarter, leading to improved profitability," said Mr. Chao Lu, Chief Financial Officer of RLX Technology. "In light of the regulatory changes, we are off to a slow start of the sales of our new products that are compliant with the National Standards in the new transaction system mandated by the regulators. Despite the macro headwinds, we will continue to steadily focus on cost optimization while reinforce our product competitiveness under the new regulatory regime to create sustainable, long-term growth for our shareholders."

Second Quarter 2022 Financial Results

Net revenues were RMB2,233.9 million (US$333.5 million) in the second quarter of 2022, compared with RMB2,541.4 million in the same period of 2021. The decrease was primarily due to the suspension of store expansions and new product launches during the transition period to comply with regulatory requirements.

Gross profit was RMB977.9 million (US$146.0 million) in the second quarter of 2022, compared with RMB1,146.5 million in the same period of 2021.

Gross margin was 43.8% in the second quarter of 2022, compared with 45.1% in the same period of 2021. The decrease was primarily due to (i) an unfavorable product mix shift, (ii) an increase in inventory provision, and (iii) an impairment loss recognized for property, plant and equipment to comply with recent regulatory developments.

Operating expenses were RMB530.9 million (US$79.3 million) in the second quarter of 2022, representing an increase of 217.6% from RMB167.2 million in the same period of 2021. The increase in operating expenses was primarily due to the change in share-based compensation expenses, which was RMB193.2 million (US$28.8 million) in the second quarter of 2022 compared with a positive RMB172.5 million in the same period of 2021, consisting of (i) share-based compensation expenses of RMB17.9 million (US$2.7 million) recognized in selling expenses, (ii) share-based compensation expenses of RMB151.1 million (US$22.5 million) recognized in general and administrative expenses, and (iii) share-based compensation expenses of RMB24.2 million (US$3.6 million) recognized in research and development expenses. The increase in share-based compensation expenses was primarily due to the changes in the fair value of the share incentive awards that the Company granted to its employees as affected by the fluctuations of the Company's share price.

Selling expenses decreased by 2.7% to RMB122.6 million (US$18.3 million) in the second quarter of 2022 from RMB126.0 million in the same period of 2021. The decrease was mainly driven by (i) a decrease in salaries and welfare benefits and (ii) a decrease in branding material expenses, partially offset by an increase in share-based compensation expenses.

General and administrative expenses increased by 531.3% to RMB290.7 million (US$43.4 million) in the second quarter of 2022, from RMB46.1 million in the same period of 2021. The increase was mainly driven by (i) an increase in share-based compensation expenses and (ii) an increase in salaries and welfare benefits.

Research and development expenses were RMB117.6 million (US$17.6 million) in the second quarter of 2022, compared with a positive RMB4.9 million in the same period of 2021. The increase was mainly driven by (i) an increase in share-based compensation expenses, (ii) an increase in salaries and welfare benefits, and (iii) an increase in consulting expenses.

Income from operations was RMB446.9million (US$66.7 million) in the second quarter of 2022, compared with RMB979.3 million in the same period of 2021.

Income tax expense was RMB204.3 million (US$30.5 million) in the second quarter of 2022, compared with RMB204.2 million in the same period of 2021.

U.S. GAAP net income was RMB441.6 million (US$65.9 million) in the second quarter of 2022, compared with RMB824.3 million in the same period of 2021.

Non-GAAP net income was RMB634.7 million (US$94.8 million) in the second quarter of 2022, compared with RMB651.8 million in the same period of 2021.

U.S. GAAP basic and diluted net income per American depositary share ("ADS") were RMB0.348 (US$0.052) and RMB0.347 (US$0.052), respectively, in the second quarter of 2022, compared with U.S. GAAP basic and diluted net income per ADS of RMB0.595 and RMB0.591, respectively, in the same period of 2021.

Non-GAAP basic and diluted net income per ADS[2] were RMB0.494 (US$0.074) and RMB0.492 (US$0.073), respectively, in the second quarter of 2022, compared with non-GAAP basic and diluted net income per ADS of RMB0.470 and RMB0.467, respectively, in the same period of 2021.

Balance Sheet and Cash Flow

As of June 30, 2022, the Company had cash and cash equivalents, restricted cash, short-term bank deposits, net, short-term investments, and long-term bank deposits, net of RMB16,831.1 million (US$2,512.8 million), compared with RMB14,880.8 million as of June 30, 2021. For the second quarter ended June 30, 2022, net cash generated from operating activities was RMB1,444.4 million (US$215.6 million).

Regulatory Developments and Updates on Regulatory Approvals

Since the first quarter of 2022, the relevant government authorities in China have issued a series of implementing rules and guiding opinions to strengthen oversight of e-cigarette products and regulate the e-cigarette industry. These rules and opinions set forth that, among others, all e-cigarette manufacturing enterprises must apply with the department of tobacco monopoly administration under the State Council of the People's Republic of China (the "State Tobacco Monopoly Administration") and obtain a License for Manufacturing Enterprise, while e-cigarette products must satisfy various standards and technical requirements prescribed therein, and pass the technical review conducted by professional institutions organized by the State Tobacco Monopoly Administration before being launched for sale. Discussion of the relevant regulatory developments and the corresponding risks, uncertainties and/or factors in a more comprehensive and detailed manner is and will be included in the Company's filings with the U.S. Securities and Exchange Commission, including, but not limited to, the Company's annual report on Form 20-F filed on April 29, 2022.

On June 10, 2022, one of the subsidiaries of the Company obtained a License for Manufacturing Enterprise from the State Tobacco Monopoly Administration to manufacture e-liquid in compliance with China's Administrative Measures for E-Cigarettes.

On July 22, 2022, another subsidiary of the Company obtained a License for Manufacturing Enterprise from the State Tobacco Monopoly Administration to own the RELX brand and manufacture RELX branded e-vapor rechargeable devices, cartridge products, and products sold in combination with e-vapor rechargeable devices and cartridge products in compliance with China's Administrative Measures for E-Cigarettes. The approved manufacturing capacity is 15,050,000 units of e-vapor rechargeable devices per year, 328,700,000 units of cartridge products per year, and 6,100,000 units of disposable e-vapor products per year. The valid term for the License for Manufacturing Enterprise obtained is from July 18, 2022, to July 31, 2023.

[1] Non-GAAP net income is a non-GAAP financial measure. For more information on the Company's non-GAAP financial measures, please see the section "Non-GAAP Financial Measures" and the table captioned "Unaudited Reconciliation of GAAP and Non-GAAP Results" set forth at the end of this press release.

[2] Non-GAAP basic and diluted net income per ADS is a non-GAAP financial measure. For more information on the Company's non-GAAP financial measures, please see the section "Non-GAAP Financial Measures" and the table captioned "Unaudited Reconciliation of GAAP and Non-GAAP Results" set forth at the end of this press release.

Conference Call

The Company's management will host an earnings conference call at 8:00 A.M. U.S. Eastern Time on September 21, 2022 (8:00 P.M. Beijing/Hong Kong Time on September 21, 2022).

Dial-in details for the earnings conference call are as follows:

United States (toll-free):

+1-888-317-6003

International:

+1-412-317-6061

Hong Kong, China (toll-free):

+800-963-976

Hong Kong, China:

+852-5808-1995

Mainland China:

400-120-6115

Participant Code:

3343721

Participants should dial in 10 minutes before the scheduled start time and ask to be connected to the call for "RLX Technology Inc." with the Participant Code as set forth above.

Additionally, a live and archived webcast of the conference call will be available on the Company's investor relations website at https://ir.relxtech.com.

A replay of the conference call will be accessible approximately two hours after the conclusion of the call until September 28, 2022, by dialing the following telephone numbers:

United States:

+1-877-344-7529

International:

+1-412-317-0088

Replay Access Code:

4561200

About RLX Technology Inc.

RLX Technology Inc. (NYSE: RLX) is a leading branded e-vapor company in China. The Company leverages its strong in-house technology, product development capabilities, and in-depth insights into adult smokers' needs to develop superior e-vapor products. RLX Technology Inc. sells its products through an integrated offline distribution and retail model tailored to China's e-vapor market.

For more information, please visit: http://ir.relxtech.com.

Non-GAAP Financial Measures

The Company uses non-GAAP net income and non-GAAP basic and diluted net income per ADS, each a non-GAAP financial measure, in evaluating its operating results and for financial and operational decision-making purposes. Non-GAAP net income represents net income excluding share-based compensation expenses. Non-GAAP basic and diluted net income per ADS is computed using Non-GAAP net income attributable to RLX Technology Inc. and the same number of ADSs used in U.S. GAAP basic and diluted net income per ADS calculation.

The Company presents these non-GAAP financial measures because they are used by the management to evaluate its operating performance and formulate business plans. The Company believes that they help identify underlying trends in its business that could otherwise be distorted by the effect of certain expenses that are included in net income. The Company also believes that the use of the non-GAAP measures facilitates investors' assessment of its operating performance, as they could provide useful information about its operating results, enhances the overall understanding of its past performance and future prospects and allows for greater visibility with respect to key metrics used by the management in its financial and operational decision making.

The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools. They should not be considered in isolation or construed as an alternative to net income, basic and diluted net income per ADS or any other measure of performance or as an indicator of its operating performance. Investors are encouraged to review its historical non-GAAP financial measures to the most directly comparable U.S. GAAP measures. The non-GAAP financial measures here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to our data. The Company encourages investors and others to review its financial information in its entirety and not rely on any single financial measure.

For more information on the non-GAAP financial measures, please see the table captioned "Unaudited Reconciliation of GAAP and non-GAAP Results" set forth at the end of this press release.

Exchange Rate Information

This announcement contains translations of certain RMB amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars and from U.S. dollars to RMB are made at a rate of RMB6.6981 to US$1.00, the exchange rate on June 30, 2022, set forth in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or U.S. dollar amounts referred could be converted into U.S. dollars or RMB, as the case may be, at any particular rate or at all.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "is/are likely to," "potential," "continue" and similar statements. Among other things, quotations from management in this announcement, as well as the Company's strategic and operational plans, contain forward-looking statements. The Company may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including but not limited to statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the Company's growth strategies; its future business development, results of operations and financial condition; trends and competition in China's e-vapor market; changes in its revenues and certain cost or expense items; PRC governmental policies, laws and regulations relating to the Company's industry, and general economic and business conditions globally and in China and assumptions underlying or related to any of the foregoing. Further information regarding these risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided in this press release and in the attachments is current as of the date of this press release, and the Company does not undertake any obligation to update such information, except as required under applicable law.

For more information, please contact:

In China:

RLX Technology Inc.
Head of Investor Relations
Sam Tsang
Email: ir@relxtech.com

The Piacente Group, Inc.
Jenny Cai
Tel: +86-10-6508-0677
Email: RLX@tpg-ir.com

In the United States:

The Piacente Group, Inc.
Brandi Piacente
Tel: +1-212-481-2050
Email: RLX@tpg-ir.com

 

 

 

RLX TECHNOLOGY INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(All amounts in thousands)






As of


December 31,

June 30,

June 30,


2021

2022

2022


RMB

RMB

US$

ASSETS




Current assets: 




Cash and cash equivalents

5,208,967

1,709,115

255,164

Restricted cash

500

500

75

Short-term bank deposits, net

4,022,119

5,314,994

793,508

Receivables from online payment platforms

10,006

2,653

396

Short-term investments

3,621,637

4,320,591

645,047

Accounts and notes receivable, net

14,024

17,144

2,560

Inventories, net  

589,088

133,545

19,938

Amounts due from related parties

1,936

9,012

1,345

Prepayments and other current assets, net

482,659

216,798

32,367

Total current assets

13,950,936

11,724,352

1,750,400

Non-current assets: 




Property, equipment and leasehold improvement, net

143,155

116,335

17,368

Intangible assets, net

8,366

8,178

1,221

Long-term investments, net

12,000

8,000

1,194

Deferred tax assets, net

20,856

20,856

3,114

Right-of-use assets, net

176,258

130,449

19,476

Long-term bank deposits, net

2,004,593

5,485,867

819,018

Other non-current assets

48,961

22,226

3,318

Total non-current assets

2,414,189

5,791,911

864,709

Total assets

16,365,125

17,516,263

2,615,109





LIABILITIES AND SHAREHOLDERS' EQUITY




Current liabilities:




Accounts and notes payable

1,288,845

1,385,027

206,779

Short-term loan

-

100,000

14,930

Contract liabilities

286,651

459,051

68,534

Salary and welfare benefits payable

170,393

141,937

21,191

Taxes payable

597,761

420,582

62,792

Accrued expenses and other current liabilities

313,396

252,513

37,699

Lease liabilities - current portion

80,582

56,944

8,502

Total current liabilities 

2,737,628

2,816,054

420,427






Non-current liabilities:




Deferred tax liabilities

4,513

4,513

674

Lease liabilities - non-current portion

104,232

87,847

13,115

Total non-current liabilities

108,745

92,360

13,789

Total liabilities

2,846,373

2,908,414

434,216





Shareholders' Equity:




Total RLX Technology Inc. shareholders' equity

13,514,952

14,641,773

2,185,958

Noncontrolling interests

3,800

(33,924)

(5,065)

Total shareholders' equity

13,518,752

14,607,849

2,180,893





Total liabilities and shareholders' equity

16,365,125

17,516,263

2,615,109






 

 

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME

(All amounts in thousands, except for share and per share data, or otherwise noted)











For the three months ended


For the six months ended


June 30,

March 31,

June 30,

June 30,


June 30,

June 30,

June 30,


2021

2022

2022

2022


2021

2022

2022


RMB

RMB

RMB

US$


RMB

RMB

US$










Net revenues

2,541,402

1,714,450

2,233,893

333,511


4,939,898

3,948,343

589,472

Cost of revenues

(1,394,916)

(1,057,447)

(1,256,010)

(187,517)


(2,689,339)

(2,313,457)

(345,391)

Gross profit

1,146,486

657,003

977,883

145,994


2,250,559

1,634,886

244,081










Operating expenses:









Selling expenses

(126,005)

(75,947)

(122,634)

(18,309)


(417,540)

(198,581)

(29,647)

General and administrative expenses

(46,056)

66,395

(290,745)

(43,407)


(758,870)

(224,350)

(33,495)

Research and development expenses

4,911

(24,007)

(117,567)

(17,552)


(206,723)

(141,574)

(21,136)

Total operating expenses

(167,150)

(33,559)

(530,946)

(79,268)


(1,383,133)

(564,505)

(84,278)










Income from operations

979,336

623,444

446,937

66,726


867,426

1,070,381

159,803










Other income









Interest income, net

16,069

27,151

42,724

6,379


25,483

69,875

10,432

Investment income  

23,868

32,239

40,631

6,066


38,795

72,870

10,879

Others, net

9,185

116,857

115,586

17,257


6,018

232,443

34,703

Income before income tax

1,028,458

799,691

645,878

96,428


937,722

1,445,569

215,817

Income tax expense  

(204,154)

(112,636)

(204,316)

(30,504)


(380,447)

(316,952)

(47,320)

Net income

824,304

687,055

441,562

65,924


557,275

1,128,617

168,497

Less: net income attributable to noncontrolling
    interests

-

(18,226)

(19,499)

(2,911)


-

(37,725)

(5,632)

Net income attributable to RLX Technology
    Inc.

824,304

705,281

461,061

68,835


557,275

1,166,342

174,129

Other comprehensive (loss)/income:









Foreign currency translation adjustments

(184,772)

(45,824)

580,438

86,657


(9,249)

534,614

79,816

Total other comprehensive (loss)/income

(184,772)

(45,824)

580,438

86,657


(9,249)

534,614

79,816

Total comprehensive income

639,532

641,231

1,022,000

152,581


548,026

1,663,231

248,313

Less: total comprehensive income attributable
    to noncontrolling interests

-

(18,226)

(19,499)

(2,911)


-

(37,725)

(5,632)

Total comprehensive income attributable to
    RLX Technology Inc.

639,532

659,457

1,041,499

155,492


548,026

1,700,956

253,945










Net income per ordinary share/ADS 









 Basic

0.595

0.528

0.348

0.052


0.382

0.877

0.131

 Diluted

0.591

0.521

0.347

0.052


0.381

0.867

0.129










Weighted average number of ordinary
    shares/ADSs









Basic

1,385,410,036

1,336,118,854

1,323,877,777

1,323,877,777


1,457,602,981

1,329,964,500

1,329,964,500

Diluted

1,394,565,595

1,354,294,220

1,330,060,097

1,330,060,097


1,462,159,428

1,345,014,312

1,345,014,312











 

 

 

RLX TECHNOLOGY INC.

UNAUDITED RECONCILIATION OF GAAP AND NON-GAAP RESULTS

(All amounts in thousands, except for share and per share data, or otherwise noted)







For the three months ended


For the six months ended


June 30,

March 31,

June 30,

June 30,


June 30,

June 30,

June 30,


2021

2022

2022

2022


2021

2022

2022


RMB

RMB

RMB

US$


RMB

RMB

US$

Net income

824,304

687,055

441,562

65,924


557,275

1,128,65217

168,497

Add: share-based compensation expenses









       Selling expenses

(51,473)

(41,939)

17,896

2,672


69,230

(24,043)

(3,590)

       General and administrative expenses

(41,404)

(230,087)

151,069

22,554


577,089

(79,018)

(11,797)

       Research and development expenses

(79,666)

(53,211)

24,213

3,615


58,647

(28,998)

(4,329)

Non-GAAP net income

651,761

361,818

634,740

94,765


1,262,241

996,558

148,781










Net income attributable to RLX Technology Inc.

824,304

705,281

461,061

68,835


557,275

1,166,342

174,129

Add: share-based compensation expenses

(172,543)

(325,237)

193,178

28,841


704,966

(132,059)

(19,716)

Non-GAAP net income attributable to RLX Technology Inc.

651,761

380,044

654,239

97,676


1,262,241

1,034,283

154413










Non-GAAP net income per ordinary share/ADS









- Basic

0.470

0.284

0.494

0.074


0.866

0.778

0.116

- Diluted

0.467

0.281

0.492

0.073


0.863

0.769

0.115

Weighted average number of ordinary shares/ADSs









- Basic

1,385,410,036

1,336,118,854

1,323,877,777

1,323,877,777


1,457,602,981

1,329,964,500

1,329,964,500

- Diluted

1,394,565,595

1,354,294,220

1,330,060,097

1,330,060,097


1,462,159,428

1,345,014,312

1,345,014,312

 

 

 

RLX TECHNOLOGY INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(All amounts in thousands)











For the three months ended


For the six months ended



June 30,

March 31,

June 30,

June 30,


June 30,

June 30,

June 30,


2021

2022

2022

2022


2021

2022

2022


RMB

RMB

RMB

US$


RMB

RMB

US$

Net cash generated from operating activities

649,441

308,169

1,444,388

215,640


1,477,006

1,752,557

261,649

Net cash used in investing activities

(3,620,360)

(950,764)

(4,145,885)

(618,964)


(6,434,607)

(5,096,649)

(760,910)

Net cash (used in)/generated from financing
     activities

(6,174)

(161,612)

(145,189)

(21,676)


10,031,248

(306,801)

(45,804)

Effect of foreign exchange rate changes on cash, cash
     equivalents and restricted cash

(146,515)

(20,556)

171,597

25,620


(2,289)

151,041

22,551

Net (decrease)/increase in cash and cash
     equivalents and restricted cash

(3,123,608)

(824,763)

(2,675,089)

(399,380)


5,071,358

(3,499,852)

(522,514)

Cash, cash equivalents and restricted cash at
     the beginning of the period

9,649,767

5,209,467

4,384,704

654,619


1,454,801

5,209,467

777,753

Cash, cash equivalents and restricted cash at
     the end of the period

6,526,159

4,384,704

1,709,615

255,239


6,526,159

1,709,615

255,239





































 

 

 

Cision
Cision

View original content:https://www.prnewswire.com/news-releases/rlx-technology-announces-unaudited-second-quarter-2022-financial-results-301629273.html

SOURCE RLX Technology Inc.