Tag: China

  • Vaporesso Licensed to Sell Open Systems in UAE

    Vaporesso Licensed to Sell Open Systems in UAE

    The United Arab Emirates Ministry of Industry and Advanced Technology (MoIAT) has licensed Vaporesso to sell in the country, the company announced in a press release.

    After nearly a year of strategic planning and application, Vaporesso received MoIAT certification for over 10 models of its products, including the Luxe XR, XROS 3 Mini, XROS 2, XROS 3, XROS Mini, XROS Nano, Zero S, Luxe X, Luxe QS, OSMALL 2, and GEN PT 60.

    “As the first open-system vaping device brand licensed by the MoIAT, we will continue our commitment to providing market-leading vaping products with unmatched quality and functionality,” said Jimmy Hu, vice president of Vaporesso.

    The first batch of MoIAT-certified products with compliant packaging has now arrived in the UAE and gone through taxation. This allows distributors, retailers and consumers to legally sell, stock and buy Vaporesso products with assured quality. Meanwhile, all future Vaporesso products will undergo MoIAT registration, ensuring quality and innovation for partners and consumers.

    The UAE government has enforced strict regulations to govern all nicotine-containing components used in e-cigarettes, refill packages, e-liquids and tobacco products sold in the country. The regulations demand that manufacturers and companies of vaping devices must meet Emirates Authority for Standardization and Metrology standards, which set out strict quality and safety requirements for e-cigarettes and related products before placing them on the market.

  • Net Revenues for 2Q 2023 Fall for RLX Technology

    Net Revenues for 2Q 2023 Fall for RLX Technology

    Kate Wang / Credit: RELX

    RLX Technology announced its unaudited financial results for the second quarter ended June 30, 2023.

    Net revenues were RMB378.1 million ($52.1 million) in the second quarter of 2023 compared with RMB2.2 billion in the same period of 2022.

    The decrease was primarily due to the discontinuation of its older products and the negative impact of illegal products in the market after regulators’ special action ended in April, which disrupted users’ adoption of our new products that comply with national standards, according to the company.

    Gross margin was 26.1 percent in the second quarter of 2023 compared with 43.8 percent in the same period of 2022. The decrease was primarily due to the imposition of a 36 percent excise tax, which came into effect on Nov. 1, 2022.

    U.S. GAAP net income was RMB204.7 million in the second quarter of 2023 compared with U.S. GAAP net income of RMB441.6 million in the same period of 2022.

    Non-GAAP net income was RMB86.2 million in the second quarter of 2023 compared with RMB634.7 million in the same period of 2022.

    “During the second quarter of 2023, we continued to firmly execute our core strategy amid the challenging market environment,” said Ying (Kate) Wang, co-founder, chairperson of the board of directors and CEO of RLX Technology, in a statement. “Specifically, we remained dedicated to offering compliant, high-quality products while developing new products to meet users’ evolving needs.

    “Though the recent resurgence of illegal products has had a lingering impact on our sales, we believe the impact will be temporary rather than a major trend that could derail our recovery trajectory. As a trusted e-vapor brand for adult smokers, we remain confident that, supported by regulatory oversight, our premium products will continue to win users’ trust and gradually supplant inferior and harmful illegal products. Moving forward, we will continue prioritizing product innovation, harm reduction and quality control initiatives while further enhancing our product portfolio as we strive to create sustainable value for all stakeholders.”

    Chao Lu, chief financial officer of RLX Technology, added that the external challenges, especially the disruptions from illegal products, helped to deepen the company’s focus on efficiency and profitability improvement during the second quarter.

    “Thanks to our supply chain optimizations and product design enhancements, our topline improved sequentially to RMB378.1 million, and our gross margin rebounded by 1.9 percentage points from the first quarter of 2023. We also strengthened cost control, which helped significantly narrow our non-GAAP operating loss,” said Chao. “Notably, our operating cash flow turned positive for the first time since the new regulations were enacted. We believe our strong cash position will continue to support us in navigating the evolving markets, and we will pursue further gains in cost optimization and efficiency improvement to accelerate the pace of recovery.”

    The company hosted an earnings conference call at 8:00 a.m. U.S. Eastern Time on Aug. 18, 2023 (8:00 p.m. Beijing/Hong Kong Time on Aug. 18, 2023).

    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 Aug. 25, 2023.

  • China-Based Ispire Appoints New CEO and CFO

    China-Based Ispire Appoints New CEO and CFO

    Ispire Technology has appointed Michael Wang as its co-chief executive officer. Wang previously served as chief financial officer. Concurrently, Daniel J. Machock was appointed as the new chief financial officer.

    Wang has assumed the role of co-chief executive officer alongside Tuanfang Liu. This strengthened leadership structure is designed to refine Ispire’s strategic direction and spearhead the company’s future growth. Ispire’s decision to elevate Wang stems from his record in strategic and financial leadership.

    “Having been deeply involved with Ispire’s progress, I look forward to partnering with Tuanfang to further the company’s growth and expansion,” said Wang in a statement. “Together, we share a mutual vision of global development and pioneering innovation within the company.”

    With extensive 25-year experience in financial strategy, including at Appetize Technologies and Chrome River Technologies, Ispire expects Machock to bolster its financial footing.

    “I am honored to take on the role of CFO at Ispire,” said Machock. “Eager to harness my financial expertise, I deeply value the company’s unwavering dedication to innovation in the cannabis vaping arena and am committed to contributing to its continued success.”

  • China’s Boton Group Divests 51% Stake in Bubblemon

    China’s Boton Group Divests 51% Stake in Bubblemon

    Kate Wang / Credit: RELX

    China Boton has sold its Bubblemon Vape Brand to the founder of RELX vaping products, Kate Wang.

    According to an announcement, the company has signed a sale agreement with the Han Holding SPV.

    Han Holding is an investment holding limited company registered under the laws of the British Virgin Islands and a wholly-owned subsidiary of Sunnyheart Inc.

    Sunnyheart Inc. is a limited liability company registered under the laws of the Cayman Islands, primarily engaged in the sale of e-cigarettes.

    According to the directors, based on the information provided by Sunnyheart Inc., the ultimate beneficial owner of Sunnyheart Inc. is Wang Ying (also known as Kate Wang, CEO and founder of Relx Technology), who holds 50 percent voting rights of Sunnyheart Inc. and is the sole director of Sunnyheart Inc.

    Upon completion of the transaction, the buyer and Han Holding SPV will respectively hold 81 percent and 19 percent of the target company’s equity.

    After the reorganization, Boton Holding SPV and Han Holding SPV will respectively hold 51 percent and 49 percent of the target company’s equity, making the Korean target company a wholly-owned subsidiary of the target company, according to 2FIRSTS.

    China Boton is an investment holding limited company registered in the Cayman Islands, mainly engaged in the research and development, production, trading, and sale of extracts, essences, and spices. The company is also involved in the design and manufacture of high-quality e-cigarettes and related products.

  • China Vape Exports Top $3.36 Billion for First Half of 2023

    China Vape Exports Top $3.36 Billion for First Half of 2023

    Credit: Nikolay N. Antonov

    A Shenzhen Special Zone Newspaper’s official X (formerly Twitter) account reported that Shenzhen, China exported Yuan 26.2 billion ($3.36 billion) of e-cigarettes in the first half of 2023, up 35.8 percent year over year.

    “We check the data of the General Administration of Customs of China that the export of e-cigarettes in the first half of 2023 is Yuan 37.78 billion, that is to say, the export of e-cigarettes in Shenzhen in the first half of this year accounted for 69.3 percent of the country,” the account states.

    Total exports were Yuan 1.05 trillion, an increase of 14.4 percent; Total imports were Yuan 628.49 billion.

    On the whole, Shenzhen’s imports and exports maintained a steady growth trend in the first half of the year.

  • Smoore International Issues 2023 Profits Warning

    Smoore International Issues 2023 Profits Warning

    Smoore International Holdings issued a profit warning for the six months ended June 30, 2023.

    The company’s board of directors expects the group’s comprehensive income for the period to be between RMB717.3 million ($100.1 million) and RMB792.8 million, representing a decrease of between 42.7 percent and 48.2 percent from the income reported for the comparable period in 2022.

    The adjusted net profit will be approximately RMB741.4 million to RMB816.9 million, representing a decrease of approximately 43.1 percent to 48.4 percent from the prior-year period.

    Smoore attributed the decline to a decrease in revenue of 9.4 percent. Revenue from the Mainland China market for the period dropped approximately 96.3 percent, and its proportion to total revenue decreased from approximately 30 percent in the 2022 period to approximately 1.2 percent in the most recent six months.

    Although the revenue from Mainland China in the second quarter of 2023 has significantly increased compared with the first quarter of 2023, it is still far below the same period last year.

    During the period, the group’s revenue from overseas markets was approximately RMB5.06 billion, representing a steady growth of approximately 28 percent year-on-year. Among them, the revenue from the U.S. market was approximately RMB2.22 billion, representing a year-on-year increase of approximately 26.9 percent.

    With the strengthening of supervision and enforcement of noncompliant products, compliant products are expected to gain more room for sustainable growth in the U.S. market.

    Revenue from Europe and other markets was approximately RMB2.85 billion, representing a year-on-year increase of approximately 28.8 percent. The group launched disposable products with a better experience under the compliance framework in this market, which were well received by clients and users, and the revenue from this market continued to grow.

    The increase in revenue from overseas were insufficient to offset the declines in Mainland China.

  • RLX Reeling From Illicit Flavored Vape Products

    RLX Reeling From Illicit Flavored Vape Products

    relx vaping products
    Creit: RELX

    RLX Technology reported net revenues of RMB188.9 million ($27.5 million) for the first quarter of 2023, down from RMB1.71 billion in the same period of 2022. Gross margin was 24.2 percent during the quarter, compared with 38.3 percent in the comparable 2022 period. GAAP net loss was RMB56.3 million, compared with GAAP net income of RMB687.1 million in the same period of 2022. Non-GAAP net income totaled RMB183.6 million, down from RMB361.8 million in the same period of 2022.

    RLX Technology attributed its struggles to fierce competition from illicit products. “We experienced an incredibly challenging first quarter as illegal-flavored products caused users’ slow shift to products that meet the national standards and drove our total revenues down to RMB188.9 million. Our gross margin declined as we incurred the full effect of the new excise tax in the first quarter,” said RLX Technology Chief Financial Officer Chao Lu in a statement.

    “We are pleased that market conditions have improved, following the regulators’ strict actions to combat illegal products since March 2023. As a result, our sales are showing signs of recovery. Looking ahead, we will continue improving our operational efficiency and believe our profitability will gradually recover. Our resilient business model and solid cash position will support us as we navigate the market dynamics, enabling us to deliver sustainable value to our stakeholders as the industry regains momentum.”

    According to RLX Technology co-founder, CEO and Board Chair Ying (Kate) Wang, the company remained focused on optimizing its product offerings under the new regulatory framework during the first quarter.

    “While we strive to develop diversified, new, approved products that cater to users’ various demands, the prevalence of illegal products has posed near-term challenges to our sales and disrupted the recovery pace of the industry as a whole.

    “The increasing efforts put forth by the regulators to crack down on illegal products have been encouraging, and we are hopeful that these will be effective in supporting the creation of fair and orderly market conditions, prompting a return to sustainable growth for law-abiding companies such as RLX Technology.

    “If illegal products can be pushed out of the market, we believe adult users will gradually adapt to products that meet national standards. As a trusted e-vapor brand for adult smokers, we remain committed to providing compliant, superior products that meet our users’ needs as we continue exploring growth opportunities in the evolving industry.”

     

  • Russia’s Vape Market Growing With Boost From China

    Russia’s Vape Market Growing With Boost From China

    A vape shop in Vladikavkaz, Russia in 2019. (Credit: irinabal18)

    The withdrawal of European and American tobacco manufacturers and the gradual reduction of foreign e-cigarette brands doing business in Russia due to its war with Ukraine has allowed for the growth of Chinese e-cigarettes in Russia.

    As Russia’s tobacco industry relies heavily on the support and investment of foreign brands, the withdrawal of international tobacco companies will cause a large shortage in the Russian tobacco market, which will lead to a sharp increase in the price of tobacco products sold in Russia, according to iGeekPhone.

    By the end of 2021, there were more than 5,000 stores selling e-cigarettes in Russia, including more than 1,100 in the Moscow region.

    According to real estate platform DNA REALTY, the number of tobacco shops in Russia grew by at least 20 percent in 2022, with the bulk of their profits coming from e-cigarette sales.

    BAT announced it will withdraw from the Russian and Belarusian tobacco markets in 2023. Philip Morris International (PMI) and its subsidiary Fimo International, are also considering retaining their business in Russia because Russia is the seventh-largest tobacco market for PMI.

    Japan Tobacco suspended investments in Russia and Imperial Brands transferred its Russian operations to a successor in Russia.

    “E-cigarettes have great potential as alternatives to the tobacco market in Russia, where e-cigarette consumers account for 6.8 percent of the total number of smokers,” the article states. “After the United States and Europe, Russia is the world’s third-largest importer of electronic nicotine delivery systems (ENDS).

    “China accounts for 90 percent of the global market. In 2021, China’s exports to Russia reached 82.5 billion rubles. This year it could increase by 35 percent to 111 billion rubles.”

  • Regulations Hurt RLX Technology’s 2022 Revenues

    Regulations Hurt RLX Technology’s 2022 Revenues

    Kate Wang / Credit: RELX

    RLX Technology’s 2022 financial performance was heavily impacted by new industry regulations and e-cigarette taxes, along with Covid-related disruptions, in China.  

    The company reported net revenues of RMB340 million ($49.3 million) in the fourth quarter of 2022, down from RMB1.9 billion in the same period of 2021. Its GAAP net loss was RMB225.1 million, compared with GAAP net income of RMB494.4 million in the comparable 2021 quarter.

    For the full fiscal year, net revenues declined to RMB5.33 billion in 2022 from RMB8.52 billion in 2021. U.S. GAAP net income was RMB1.41 billion, down from RMB2.03 billion in the prior year.

    “2022 was a year full of unprecedented challenges,” said RLX Technology co-founder, chairperson and CEO Ying Wang in a statement. “A combination of Covid-related disruptions and the introduction of a substantial package of industry regulations and policy updates throughout the year impacted the e-vapor sector and our operations.

    “We retained our core strategy in this volatile operating environment while proactively adapting our business to the new regulations. In the fourth quarter, we continued to invest in R&D and product innovation and development, offering superior products to adult smokers. We believe our core competencies will enable us to attract continued support from users.

    “Looking ahead, given the benefits of the clearer regulatory framework and China’s reopening, we remain confident in the long-term growth of our industry. We are well-positioned to adapt to these shifting market forces and capture new opportunities while further deepening our commitment to honoring our social responsibilities.”

    RLX Technology was particularly affected by the vast wave of coronavirus infections as China suddenly relaxed its zero-Covid policy toward the end of 2022. In addition, its gross margin in the fourth quarter suffered as a result of the imposition on Nov. 1, 2022, of a 36 percent excise tax on e-cigarettes in China.

    “Despite the headwinds, we strove to improve operational efficiency to mitigate the adverse impact on our business,” said RLX Technology Chief Financial Officer Chao Lu. “As a result, we maintained a healthy level of profitability during 2022. We believe our company’s resilience will enable us to overcome near-term obstacles, and we remain dedicated to creating long-term sustainable value for our stakeholders.”

  • FastTech Falls as China’s Vape Rules Slow Sales

    FastTech Falls as China’s Vape Rules Slow Sales

    Credit: Nikolay N. Antonov

    Chinese online retailer FastTech is closing in the wake of strict new vaping regulations, reports Vaping360.

    In a Dec. 5 post on its customer forum, the discounter blames restrictions introduced after the State Tobacco Monopoly Administration took control of China’s vaping business. The new measures have increased uncertainty, preventing the company from remaining competitive, according to firm.

    China outlawed domestic online vape sales in 2019. The measure was followed by a licensing and sales regulations, along with the new tax scheme. Hong Kong’s ban on importing Chinese vape products for air shipping to export destinations—which is currently being reconsidered—may also have affected FastTech, which shipped many of its products through the city.

    FastTech sold Chinese-made vape products, including many semi-legal clones and copies of well-known products, to overseas customers at sometimes near-wholesale prices, and shipped them inexpensively

    According to Vaping360, there remain a number of FastTech competitors in China operating on a similar business model.

    In October, a reporter from Beijing Youth Daily claimed many businesses closed because of the implementation of China’s National Standard for Electronic Cigarettes have begun.