Category: Financial

RLX Revenue Growth Slows Amid Regulatory Uncertainty

Photo: RLX Technology
RLX Technology revenue slowed in the second quarter of 2020 amid uncertainty about the regulatory environment in China.
Net revenues were RMB2.54 billion ($393.6 million), representing an increase of 6 percent from RMB2.4 billion in the first quarter of 2021. The improvement was due primarily to an increase in net revenues from sales to offline distributors, which was mainly attributable to the expansion of the company’s distribution and retail network.
The company believes that the slowdown in quarterly sequential revenue growth was due primarily to external factors, including negative publicity on the vapor industry in the latter half of the second quarter, coupled with the fact that the draft new rules for vapor products announced by China on March 22, 2021, have not been formally confirmed and no new implementation details had been revealed, which had an adverse impact on sales.
The company is also target of a lawsuit by investors who claim RLX Technology overstated its financials and misrepresented potential regulatory risks when it filed the paperwork for its initial public offering in the U.S.
Gross margin was 45.1 percent compared to 46 percent in the first quarter of 2021.
“In the second quarter of 2021, our business continued to develop as we increased our efforts to further improve underage protection and product safety,” said Ying (Kate) Wang, co-founder, chairperson of the board of directors and CEO of RLX Technology, in a statement. “With our strategic focus on technology investment and brand building, we strive to make RELX a trusted brand for adult smokers with state-of-the-art products, industry-leading technologies and scientific advances. Going forward, we will further enhance investments in scientific research, strengthen our distribution and retail network, and improve our supply chain and production capabilities to create more value for our users and shareholders alike.”
RLX hosted an earnings conference call on Aug. 20, 2021. A live and archived webcast of the conference call is available on the company’s investor relations website. A replay of the conference call will be accessible until Aug. 27, 2021.
August 23, 2021
VPR Brands Reports ‘Turnaround’ in Second Quarter

Photo: snowing12
VPR Brands, a supplier of vaporizers, reported revenues of $1.7 million for the second quarter of 2021, up from $1.2 million in the comparable 2020 quarter.
The increase was a result of the Covid-19 pandemic, which hampered sales significantly in 2020 and increased direct on-line sales in 2021.
Operating expenses for the three months ended June 30, 2021, were $457,895, compared to $372,652 for the three months ended June 30, 2020. The increase in expenses is primarily due to increased sales activity in 2021.
Revenue for the six months ended June 30, 2021, was $2.96 million, compared with $1.8 million in the second quarter of 2020.
Operating expenses for the six months ended June 30, 2021, were $995,798, compared to $849,476 for the six months ended June 30, 2020. The increase in expenses is primarily due to increased sales activity in 2021.
Net income for the six months ended June 30, 2021, was $163,135 compared to a net loss of $471,944 for the six months ended June 30, 2020.
Net income for the three months ended June 30, 2021, was $264,786 compared to a net loss of $50,354 for the three months ended June 30, 2020.
“The company has finally put the pandemic and other extenuating circumstances behind us and is back on track,” said Kevin Frija, CEO of VPR Brands, in a statement. “The numbers, which show a tremendous turnaround from last year, speak for themselves as our team is focused on maintaining not only steady growth but most importantly profitability.”
August 23, 2021
Media Report Triggers Sell-off of Vapor Stocks

Photo: Cozyta
E-cigarette stocks fell on Aug. 5 after Chinese state media ran reports about the risks of vaping, reports Reuters.
Huabao International Holdings tumbled 8 percent in Hong Kong morning trade while China Boton Group Co. fell 4 percent. Market leader Relx Technology closed almost 5 percent lower in New York after the Xinhua news agency published a report saying that minors were gaining easy access to e-cigarettes.
Xinhua said its reporters made unannounced visits to e-cigarette shops in the northern cities of Tianjin and Shenyang and found that while all had signs stating sales to minors were prohibited, enforcement of the law varied in practice.
The sell-off demonstrated how investors remain on edge and on the hunt for clues about which companies might be vulnerable to state intervention after the property, education and technology sectors were hit by Beijing regulators in recent months with unprecedented sweeping rules.
Similar market sentiment took hold of liquor-related stocks after the Ministry of Science and Technology posted an article citing a study that linked alcohol consumption to cancer.
Investors in Chinese companies often scrutinize state media reports for hints about regulators’ thinking.
China is the world’s largest consumer of tobacco products, with more than 300 million smokers, according to the World Health Organization.
August 6, 2021
Significant Growth in New Category Sales for BAT

Photo: BAT
BAT reported revenue of £12.18 billion ($16.89 billion) for the six months that ended June 30, down 0.8 percent (up 8.1 percent on an adjusted basis) from the comparable 2020 period. Revenue from new categories increased by more than 50 percent to £883 million. Profit from operations totaled £4.91 billion, down 3.7 percent (up 5.4 percent on an adjusted basis) from the comparable six months a year earlier.
“This has been an exciting period of growth in New Categories, with New Category constant currency revenue up by 50 percent in the first half,” said BAT CEO Jack Bowles in a statement. “We added 2.6 million consumers—our highest ever increase—to our noncombustible product consumer base, to reach 16.1 million. This demonstrates our accelerating transformation driven by our multi-category portfolio, with continued key market share gains in all three New Categories.
“We are building strong, global brands of the future with Vuse, Velo and Glo. These are underpinned by industry leading multi-category consumer insights and science, with increasing digitalization. We have invested a further incremental £346 million in the first half, funded by continued value growth from combustibles and expect to reach our £1 billion Quantum savings target 12 months early. We have now increased our savings target to £1.5 billion by 2022.
“Our rapid growth in New Categories is driving significant scale benefits and 2021 is shaping up to be a pivotal year in our journey towards ‘A Better Tomorrow.’”
July 28, 2021
Bidi Vapor Parent, Kaival Brands to Trade on NASDAQ

Image: immimagery
Kaival Brands Innovations Group, the exclusive global distributor of products manufactured by Bidi Vapor, has been approved to list the company’s common stock on the Nasdaq Capital Market. The ticker symbol will remain unchanged, as “KAVL,” and the stock will begin trading on Nasdaq at the opening of the market on July 29, 2021.
“I am pleased to announce that the company has been approved to begin trading on Nasdaq,” said Niraj Patel, Kaival’s founder and CEO, in a statement. “This event represents another monumental milestone in our company’s short history.”
“We have worked diligently to achieve this goal and are humbled and grateful on the inclusion to the Nasdaq,” said Patel. “We are more enthusiastic than ever about being able to harness Kaival’s exciting potential.”
“Step by step, we continue our work to build a world-class, global organization—our elevation to Nasdaq represents a very large strategic evolution for the company,” noted Eric Mosser, chief operating officer of Kaival Brands.
July 28, 2021
Supreme’s 88Vape Sales Jump 36 Percent Amid Lockdown
The parent company behind the 88Vape brand, Supreme, announced revenues rose 36 percent as U.K. smokers attempted to quit smoking combustible cigarettes during Covid-19 lockdowns. The company’s total revenue was up 33 per cent at £122.3 million ($166 million) as of March 31, 2021. This is up from £92.3 million in same period of 2020.
Gross profits jumped to £33 million, which helped the company to slash its debt by 64 percent, ending the financial year with a just £7.6 million burden compared with £21.3 million in 2020, according to City A.M. The strongest sales growth was found in vaping and its sports nutrition and wellness branch, the company said in a statement.
Supreme’s partnership with convenience store chain McColl’s to supply shops with vaping products marked the company’s growth in the vaping sphere. The rollout of 88Vape products was completed in March 2021, adding an additional 1,180 retail convenience stores nationwide to Supreme’s portfolio.
“There are clear and very exciting opportunities that exist for our business, particularly in categories like sports nutrition and wellness and vaping, and I look forward to providing further updates in due course as we capitalise on these,” Supreme CEO Sandy Chadha said. “We have made a good start to the current financial year and look to the future with confidence.”
July 20, 2021
China-based Aspire Sets Terms for $120 Million U.S. IPO
The Chinese vaping company Aspire Global announced terms for its U.S. IPO on Friday. The company plans to raise $120 million by offering 15 million shares at a price range of $7 to $9. At the midpoint of the proposed range, the Shenzhen company would command a market value of $1.3 billion.
“Aspire is a vertically integrated provider of e-cigarette vaporizing technology. Its tobacco vaping products are sold through a distribution network of more than 150 distributors in 30 countries,” according to a release. “In December 2020, the company also commenced the marketing of cannabis vaping technology products in the US.”
Aspire Global was founded in 2010 and earned $82 million in sales for the 12 months ended December 31, 2020, according to its prospectus. It plans to list on the Nasdaq under the symbol ASPG. Tiger Brokers, EF Hutton, TF International, and China Merchants Securities are the joint bookrunners on the deal.
Aspire Global would be the second Chinese vaping company to list on the New York Stock Exchange. Unlike RLX Technology, that recently had a class action filed against for its stock tanking after China announc3ed it would regulate vaping products like traditional cigarettes, Aspire sells most of its products outside the Chinese market.
July 18, 2021
Kaival to Reverse Split Stock Ahead of NASDAQ Listing

Photo: Randy Harris
Kaival Brands, the exclusive global distributor of all products manufactured by Bidi Vapor, has implemented a 1-for-12 reverse split of its common stock, effective prior to the opening of the market on July 20, 2021. The reverse stock split was implemented by the company in support of its application to list on the NASDAQ Capital Market.
As a result of the reverse split at the 1-for-12 ratio, every 12 shares will be exchanged for one share of the common stock.
“We are excited for the new phase of Kaival’s capital markets development as we progress to listing on the NASDAQ,” said Niraj Patel, CEO of Kaival Brands, in a statement.
“Our board carefully considered the decision to effect the reverse split of our shares, which is critical for us to list on NASDAQ based on our current stock price. A reverse split is designed as an economically neutral, mathematical event that does not affect the intrinsic value of the company. While many companies execute reverse splits to avoid being delisted, our reverse split is in fact being done for just the opposite reason: to become qualified to list on the NASDAQ, which we believe will have many benefits for our company and shareholders.”
The reverse split is intended to increase the per share stock price of the company’s common stock in order to meet NASDAQ’s requirement that the company’s common stock be $4 or higher as of the listing date. Prior to listing its common stock on NASDAQ, the company’s application must be approved.
The company does not intend to issue fractional shares in connection with the reverse stock split. In order to avoid fractional shares of common stock, the number of shares issued to each stockholder will be rounded up to the nearest whole number in the event a stockholder would be entitled to receive less than one share of common stock as a result of the split. The reverse split will not affect any holder of the company’s common stock’s proportionate voting power, and all shares of common stock will remain fully paid and nonassessable.
July 15, 2021
Smoore Makes Forbes 2021 Global 2000 List
Smoore International Holdings is the only vaping technology company to make the Forbes 2021 Global 2000 list. The list ranks the world’s largest 2000 public companies. Smoore’s placement on the list confirms the legitimacy of the entire industry as a fast-growing and better alternative to cigarettes, with an expected compound annual growth rate (CAGR) of 28.1% from 2021 to 2028, according to Grandview Research.
Recognition on the list is a reflection of the company’s performance throughout 2020 and growth in market share from 16.5 percent in 2019 to 18.9 percent. The parent company to the Vaporesso brand, Smoore has over 1000 technology patents and more employees in R&D than sales, leading the vaping industry since 2009, according to a press release.
“These cutting-edge innovations are then worked into marketable products by Smoore’s sub-brands including Vaporesso, FEELM Lab and CCELL to be distributed around the world,” the release states. “Also, Smoore is proactively promoting atomization technology to other industries around the world. Vaporesso has been setting new industry standards and further driving innovation in this emerging industry with many more to come.”
Taking a snapshot of the world of business, the Forbes Global 2000 list measures companies using four equally weighted metrics: assets, market value, sales, and profits. Under Smoore, Vaporesso is committed to helping its vast network of international partners abroad and, driven by a strong sense of social responsibility, launched a series of campaigns aimed at helping those most affected, according to the release.
“Under the umbrella of Vaporesso Care, these campaigns helped affected communities in Indonesia where Vaporesso donated over 70 million rupiah and France where Vaporesso worked with local partners to distribute food to needy people over Christmas,” according to the release.
July 6, 2021
Pyxus Releases Fourth Quarter, Year End Results

Photo: snowing12
Pyxus International announced results for its quarter and fiscal year ended March 31, 2021.
Combined sales and other operating revenues were $1.33 billion, down 12.8 percent from the prior fiscal year. Combined gross profit as a percent of sales was 12.1 percent, which decreased 2.6 percent from the prior fiscal year.
Combined selling, general and administrative expenses were $197.9 million, which decreased $1.1 million or 0.6 percent from the prior fiscal year.
Combined net loss attributable to Pyxus International was $117.7 million, which decreased $147 million, or 55.5 percent, from the prior fiscal year.
Combined adjusted EBITDA was $93.5 million. Total long-term debt was substantially reduced when compared to the prior fiscal year. Year-end uncommitted inventory was the lowest it has been since fiscal 2016.
“In what was an unprecedented and challenging year, our company adapted to constant change as we navigated the Covid-19 pandemic,” said Pieter Sikkel, Pyxus’ president and CEO, in a statement. “During fiscal 2021, we implemented a series of restructurings and process changes that allowed our business to continue to operate through the Covid-19 pandemic while also positioning us for success in fiscal 2022 and beyond. Through these actions, we substantially reduced our debt and costs throughout our supply chain. We also made the strategic decision to exit our cash flow negative Canadian cannabis businesses, which further supports our SG&A cost containment efforts.

Based on expected first quarter results, we are optimistic about fiscal 2022
Pieter Sikkel, president and CEO, Pyxus International
“Although our production facilities continued to operate through the pandemic, certain facilities experienced lower production levels than planned due to smaller crop sizes in Africa and the implementation of social distancing requirements and safety practices to reduce the spread of Covid-19 and protect our employees. In addition, the Covid-19 pandemic-related shipping delays of leaf tobacco for certain customer orders resulted in a shift of between $170 million and $180 million of expected revenue and $30 million and $34 million of expected EBITDA from fiscal 2021 into fiscal 2022. However, the impact of Covid-19 on our business yielded innovative changes that will enable us to be more flexible in the future and accelerate certain activities in the crop cycle. Covid-19 has also pushed the tobacco industry to continue to look for ways to reduce supply chain complexity in a responsible manner.
“For the full year, we are expecting fiscal 2022 sales to be between $1.65 billion and $1.8 billion, SG&A expense to be between $140 million and $145 million (excluding nonrecurring items and potential changes in foreign currency exchange rates) and adjusted EBITDA to be between $150 million and $170 million. Based on expected first quarter results, we are optimistic about fiscal 2022. Lastly, we are also excited about sharing more information about our enhanced global environmental, social and governance strategy, which supports our ability to deliver on our expected results for fiscal 2022.”
June 30, 2021