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.
Some victims of the mysterious vaping-related lung disease that swept through all 50 U.S. states in 2019 were actually Covid-19 patients, according to a group of Chinese scientists and radiologists. After reviewing some 250 chest CT scans from published papers, the group says they are confident in the conclusion that some patients were wrongly diagnosed with e-cigarette or vaping use-associated lung injury (EVALI).
Credit: Kawee
The scientists are now urging U.S. officials to start screening for Covid-19 in patients who in 2019 were diagnosed with EVALI. . According to the Global Times, sources close to the matter said that after studying 250 chest CT scans of 142 EVALI patients selected from some 60 related studies that have been published, the scientists found that 16 EVALI patients were involved in viral infections, which indicates that they could have had Covid-19. Five of the cases were determined as “moderately suspicious.”
The 16 EVALI patients were all from the U.S., and in 12 patients symptoms started before 2020. Researchers concluded that there were viral infection cases among EVALI infections reported in the U.S. in 2019, and the possibility of Covid-19 in the vaping-related lung disease in the U.S. cannot be ruled out, sources said.
Yang Zhanqiu, a virologist at Wuhan University, said that due to the similarity of symptoms between EVALI and Covid-19 patients and since no nucleic acid detection kits were available at the time, it’s highly likely that some Covid-19 patients were actually misdiagnosed as EVALI patients in 2019.
E-cigarette stocks listed on the Stock Exchange of Hong Kong plunged in the afternoon session on Wednesday, following an official warning of that e-cigarettes can cause damage to consumer’s health. Shenzhen-based Smoore International, the world’s largest vaping device manufacturer, saw its shares slump nearly 20 percent on the exchange near the end of the afternoon session, before finishing down 17.1 percent.
Credit: Boonchok
By comparison, the benchmark Hang Seng Index gained 0.88 percent. China Boton Group, an vapor industry manufacturer also based in Shenzhen, lost 17.94 percent in Hong Kong trading, while Hong Kong-based Huabao International Holdings shed 7.69 percent, according to news in China’s Global Times.
The rout was triggered after the National Health Commission (NHC) on Wednesday unveiled a report on the health risks of smoking cigarettes, jointly with the World Health Organization’s (WHO) county office in China, which said that there’s sufficient proof that e-cigarettes are unsafe and harmful to health.
The country’s population of smokers has topped 300 million, with the smoking rate for those aged 15 and above standing at 26.6 percent and the percentage of male smokers hitting 50.5 percent, according to the report. Cigarettes claim the lives of more than 1 million people in the country per year. The annual number is estimated to rise to 2 million by 2030 and then to 3 million by 2050, assuming the absence of effective actions.
In 2016, a groundbreaking 200-page report that supports e-cigarettes as a tool to quit smoking and demolishes several vaping myths in the process was released by one of the world’s most prestigious medical organizations. The Royal College of Physicians (RCP), the most respected medical institution in the United Kingdom, concluded e-cigarettes are 95 percent safer than regular cigarettes and are likely to be hugely beneficial to public health.
Several other studies have found similar conclusions over the last five years since the RCP study was published. The WHO has long refused to see e-cigarettes as a harm reduction product.
Nonetheless, Hong Kong-traded BYD Electronic still posted a massive gain in the final hour of trading, soaring as much as 22.91 percent before ending up 11.73 percent, on reports that the company has finalized patenting its e-cigarette business, which is expected to begin mass production in June. Its parent company BYD closed up 2.39 percent in the Hong Kong market on Wednesday, while edging down 0.2 percent in the Shenzhen market.
It has long been anticipated that the tobacco monopoly in China would one day regulate electronic nicotine-delivery systems (ENDS). On March 22, China’s Ministry of Industry and Information Technology (MIIT) and the State Tobacco Monopoly Administration (STMA) released a draft proposal to overhaul rules governing the ENDS market.
Shares in RLX Technology, parent to China’s market-leading RELX e-cigarette brand, plunged in the wake of the announcement. Just two months after the vapor maker’s billion-dollar debut on the New York Stock Exchange, RLX shares fell by nearly 45 percent to $10.69 per share on March 22, having reached a high of $19.46 per share on March 19.
An online copy of the “Decision on Amending the Implementation Regulations of the Tobacco Monopoly Law of the People’s Republic of China” suggests the government intends to regulate ENDS like ordinary cigarettes. That could mean special licensing requirements and much higher taxes of up to 65 percent instead of the 13 percent value-added rate companies currently pay. The ministry is seeking public comments on the draft regulations until April 22. The implications of the draft regulations could be far-reaching. With an estimated 300 million smokers, China is the world’s largest potential market for vapor products.
“In view of the homogeneity of new tobacco products such as e-cigarettes and traditional cigarettes in terms of core ingredients, product functions and consumption patterns, new tobacco products such as e-cigarettes shall be implemented in accordance with the relevant provisions of the Regulations on Cigarettes,” the draft proposal states. “The implementation … will greatly enhance the effectiveness of e-cigarette supervision, effectively regulate e-cigarette production and operation activities, solve the product quality and safety risks of e-cigarettes, false advertising and other issues, and effectively protect the legitimate rights and interests of consumers.”
While the news will have some impact on the global ENDS market, the Chinese manufacturers producing for international markets will likely continue operations. “Depending on how they regulate and to what extremes, it could be devastating to the companies operating in the consumer market in China,” said a representative of a major China-based ENDS manufacturing company, who asked for anonymity. “We expect that there will be players that remain in the market, possibly working alongside the Chinese government in the promotion and sales of vaping products. Right now, we are just waiting for a better understanding of what this means for China’s domestic market. A worst-case scenario would be an outright ban on all products, but this is unlikely.”
The draft proposal states that the regulations will have three purposes:
To promote the rule of law in the supervision of e-cigarettes;
To conform to the characteristics of e-cigarette products and current international regulatory practices;
To enhance the regulatory effectiveness of e-cigarettes.
There are 350 million smokers in China. The country consumes an estimated 1 trillion cigarettes per year. As the largest cigarette market in the world, it would make sense for China to embrace vapor products as a less risky alternative to combustible tobacco. However, with a state-run tobacco monopoly and billions of dollars of taxes at stake, industry experts say the Chinese vapor market is complicated and slow to implement regulations.
Despite impressive growth, China’s vapor market is still insignificant compared to its tobacco market. As of the end of 2019, an estimated 7.4 million people in China were regular e-cigarette users, according to Cloris Li, a spokesperson for Smoore International, parent to FEELM and the Vaporesso brand.
“That means the electronic cigarette industry in China can still potentially convert a large number of smokers,” said Li. “Considering China’s status as the biggest tobacco market, it has enormous potential to continue the current rapid growth rate. In 2018, Chinese e-cigarettes and auxiliary products had a market size of CNY5.52 billion [$848.38 million], and it is predicted to grow more than double to CNY11.28 billion by 2022.”
Vaping products in China are not considered tobacco products like they are in Europe and the United States. Instead, e-cigarettes are considered a consumer goods product. During the E-Vapor and Tobacco Law Virtual Symposium, sponsored by the law firm Keller and Heckman, two industry experts discussed the current vaping and tobacco market in China. One speaker noted that because e-cigarettes do not fall under the definition of tobacco as defined under the country’s monopoly laws, China, at the time, had yet to implement any major restrictions on vapor products.
With little regulatory guidance, China’s vapor market has been booming both in terms of domestic consumption and manufacturing exports. China, where the modern e-cigarette was invented, has become the manufacturing hub of the fast-growing global vapor industry. This has led to the rise of several major corporations, including the world’s most valuable vapor company, Smoore International.
When Smoore went public in mid-2020, its stock grew by nearly 150 percent on its opening day of trading on the Hong Kong Exchange. Smoore stock did not suffer after the MIIT announcement. The value of Chinese e-cigarette maker RLX Technology, parent to the RELX brand, jumped 146 percent during its trading debut in January 2021 after raising $1.4 billion in its U.S. initial public offering, before dropping drastically after the MIIT announcement.
In its prospectus, RLX stated that vaping products only have a 1.2 percent penetration rate in China compared with 32.4 percent in the U.S. The Electronic Cigarette Industry Committee estimated China’s 2020 e-cigarette sales at CNY14.5 billion, an increase of 30 percent from 2019 (CNY11.2 billion). By comparison, the U.S. e-cigarette market in 2019 was worth $5.34 billion and is expected to reach $6.50 billion in 2020, according to Grandview Research.
RLX is doing its part to accelerate e-cigarette sales in China. In early 2020, the company launched its two flagship RELX vape shops in Shanghai and Beijing. Today, RELX has partnered with 110 authorized distributors to supply its products to over 5,000 RELX-branded partner stores and over 100,000 other retail outlets nationwide, covering over 250 cities in China, according to its prospectus. Revenue for the company nearly doubled in the nine months ended Sept. 30, 2020, to $324 million, with a net income of $16 million.
Along with the Smoore and RLX initial public offerings, China’s vaping industry continues to attract lots of attention from the capital market, according to Li, it is unknown if the proposed regulations will hamper that attention. “This year, in 2021, many more second-tier brands are spearheading efforts to acquire financing to expand the market [in China], especially markets in lower tier cities,” Li said. “For example, MOTI intends to invest cny1 billion to open 10,000 stores. Snow Plus even announced its intent to distribute future stock shares to distributors to open more stores.”
To date, the Chinese government has passed two major pieces of legislation for vapor products. In 2018, it made it a crime to sell a vapor product to anyone under 18 years of age. In November 2019, the government prohibited online sales of vapor products to prevent youth initiation. In 2020, the country passed the Law of the People’s Republic of China on the Protection of Minors. That law is aimed at preventing parents or other guardians from “indulging or instigating minors” to smoke or vape.
The Chinese government wants to avoid the rapid rise in youth vaping that occurred in the U.S. If the U.S. figures replicated domestically in China, it could harden Beijing’s stand on the category, according to a 2021 report from ECigIntelligence. For now, e-cig usage among Chinese youth remains relatively low. A 2019 survey by the Chinese Center for Disease Control and Prevention found that 8.6 percent of high school students aged between 15 years and 18 years in China had used “tobacco” products during the previous 12 months.
Between July and August 2020, authorities collected comments on a bill that would restrict the public use of e-cigarettes nationwide and establish specific areas where vaping would be allowed. “The amendments to the Law on the Protection of Minors would prohibit vape stores from operating near schools, ban e-cigarette sales to minors and vaping in schools, kindergartens and anywhere else where young people are gathered,” the report states. “The bill would also require vendors to ask for an identification document if in doubt about a purchaser’s age while shop owners would be required to put up a prominent ‘no sales to minors’ sign. If the proposals are adopted and e-cigarettes are regulated under the same umbrella as traditional tobacco products, it would be China’s first national law specifically restricting e-cigarettes.”
In 2020, the Chinese government also floated the idea of banning vapor products completely. Another proposal suggested that e-cigarettes should be regulated as tobacco products while prohibiting their promotion as smoking cessation products. The authors of the study point out that Chinese rules can impact a market virtually overnight. Prior to the country’s ban of online sales of vapor products, there were hundreds of thousands of products available on the internet. The day after the announcement, an online search for e-cigarettes would have yielded zero results. “When the authorities do put something in writing and announce something that they want to put into effect, it can happen oftentimes almost immediately,” the report states.
While the Chinese government is yet to release any vapor regulations concerning components and manufacturing, several industry players have come together to self-regulate the industry. In 2017, draft regulation or standards were developed on the industry level. While not mandatory national standards, the rules give a good sense of what the industry considers sensible in terms of specifications, requirements and limitations.
“The same holds true with the group standards concerning the raw materials, about the diluents, the flavorings, and some requirements as it relates to physical, chemical, hazardous substances. They go into some test methods,” a presenter at the Keller and Heckman seminar said. “Not always, but typically, the authorities will look at these group standards, voluntary standards, and start to adopt some of that language when they make mandatory national standards. So, having a good sense of what these [recommended standards] look like … that would be important.”
Further complicating China’s vapor market is the China National Tobacco Company (CNTC), the state-run tobacco monopoly. If the monopoly chooses to enter the vapor market, it could devastate the independent vape shops that proliferate the Chinese market. “The state monopoly has yet to signal clearly how it will regulate e-cigarettes or whether it will sell them. If it does, it has the power to regulate its competitors out of the market,” the report states.
The industry is acutely aware of this risk. In a November 2019 interview with Reuters, one investor in a Chinese e-cigarette startup compared the combined regulatory and competitive threat posed by CNTC as “a knife on the neck.” CNTC is a source of major funding for the Chinese government. Its contribution accounted for an estimated 5.45 percent of the country’s tax revenue in 2018. That amounts to cny10.8 trillion, according to media reports.
If CNTC were to enter the vapor market, the monopoly’s existing 5 million domestic retail outlets could present a major challenge for private vape shop owners. Kate Wang, CEO for RELX, told Reuters (before the draft regulations were announced) that she’s “not worried” about the government’s impact on the sector. The products will continue to remain available, she said, “as long as there’s proof that this is a good solution for smokers.”
Myst Labs, a Chinese e-cigarette maker co-founded in 2019 by Chenyue Xing, a chemist who was part of the team at Juul that invented nicotine salts, recently raised “tens of thousands of dollars” from a Series B funding round. The financing was led by its existing investor, IMO Ventures. Thomas Yao, CEO and another co-founder of Myst, is a founding partner of IMO Ventures.
Credit: Myst
The news comes after of one of China’s top tech policy makers that published a set of draft rules that would bring e-cigarettes under the same regulatory scope as traditional tobacco, which means vaping companies will need licenses for production, wholesale and retail operations in the world’s largest manufacturer and exporter of e-cigarettes.
These changes, announced in March, will deal a blow to small producers with poor quality control, leaving the industry with a handful of established and compliant players, Fang Wang, head of marketing at Myst, told TechCrunch.
For one, standardizing production is costly, Wang said. From ceramic coils, to batteries, to fragrance, every component and ingredient of a vape will need to meet stringent requirements. E-cigarette companies will also need to pay tobacco taxes, an important source of tax revenue for the Chinese government.
The other challenge is how to lower nicotine content. Many current products on the market have a relatively high nicotine concentration at 3-5 percent, so if China is in line with the European Union standard of 1.7 percent, many small brands will be forced out of business because they lack the know-how to produce low-nicotine vapes that still satisfy users’ crave, suggested Wang.
“We’ve received a lot of investor interest in the past few months. Before that, professional, institutional investors often avoided e-cigarette companies, but they are showing more willingness now as regulations take shape,” Wang added.
Myst declined to list its other investors but said they include high-profile individuals involved in the e-bike sharing company Lime, Facebook and the bitcoin industry.
Most of Myst’s current sales are from China, where it has opened 600 stores and plans to reach a footprint of 1,000 stores in the next few quarters. Overseas, the startup has a retail footprint in Malaysia, Russia, Canada and the United Kingdom, where it’s selling in over 30 shopping malls and a few hospitals through its distribution partner, Ecigwizard.
The new funding will allow Myst to further expand its sales network and strengthen its research and development. The company prides itself on its product containing 1.7 percent nicotine, which it claims can deliver the effect of a 3 percent counterpart. At her lab, Xing is currently working on e-liquids with “natural tobacco contents” and without organic acids, additives that allow nicotine salts to vaporize and be absorbed.
Myst is still a relatively small player compared to China’s market dominator Relx, which went public in New York earlier this year and submitted a premarket tobacco product application (PMTA) to the U.S. Food and Drug Administration to sell in the U.S. But Yao is optimistic about Myst’s future. Vaping, he said, is one of the fastest-growing consumer categories in China. Myst’s recent sales are tripling every three months.
“In other consumer areas, you rarely see a top player commanding 60-70 percent of the market, so there is still a lot of room for the top 10 players to grow,” the CEO said.
Research and Markets has published a new report on the world’s largest potential market for heat-not-burn (HNB) products, China.
The report provides an overview of China National Tobacco Corp. (CNTC) subsidiaries’ HNB marketing activities from 2017 to 2020.
The report reviews all HNB products that were officially released in domestic and foreign markets as well as cooperation ties in the Chinese HNB market.
China Tobacco has a market of 300 million smokers with a significant part active HNB users. The domestic HNB sector is dominated by CNTC. It has launched HNB products in Sichuan, Yunnan, Guangdong, Anhui, Hubei, Heilongjiang and other provinces, and has been actively engaged in overseas markets. CNTC HNB brands are presented in many foreign markets, mostly in Asia countries and eastern Europe.
Most HNB devices are promoted with dedicated consumables. HNB devices are either produced at own facilities of CNTC subsidiaries or are OEM versions developed by third-party manufacturers. The CNTC subsidiaries with the largest number of HNB devices in the domestic market are based in Sichuan, Yunnan and Guangdong.
The report includes a brief review of HNB electronic devices produced in cooperation with major Chinese hardware manufacturers. There is also a brief description of companies engaged in the Chinese HNB market, and a complete list of HNB products with release dates and corresponding references in domestic and foreign markets, a map of presence of CNTC HNB brands in foreign markets and a timeline of CNTC HNB products by release date.
Chinese stocks related to the traditional tobacco business rose following suggestions that China would regulate e-cigarettes like tobacco products.
Cigarette packaging provider Letong Chemical and cigarette printing and filter maker Shaanxi Jinye Sci Tech & Education surged by the daily cap of 10 percent, according to the South China Morning Post.
By contrast, vapor companies tanked. Smoore lost HKD106 billion in market cap while RELX Technology shed $14.45 billion on the New York Stock Exchange immediately after the announcement.
On March 22, China’s Ministry of Industry and Information Technology and the State Tobacco Monopoly Administration released a proposed policy that aims to address tobacco product quality issues and false advertising. Without providing details, the agencies indicated that the changes would also apply to vapor products. The changes are currently subject to a public consultation that ends April 22.
Having taken arduous and often herculean steps to remain compliant with all government regulations, Kaival Brands and the leadership at Bidi Vapor hope that additional supervision of e-cigarette manufacturing will help raise standards for the devices worldwide.
With around 300 million smokers, China is the world’s largest tobacco market and the world’s largest potential market for vapor products. iiMedia Research estimates that the Chinese e-cigarette market could reach CNY10 billion ($1.53 billion) in 2021. There were more than 170,000 vapor companies as of February 2021. The market is also expected to grow in the future year.
In 2019, Chinese authorities banned e-cigarettes from online shopping channels. The restrictions prompted e-cigarette companies to invest significantly in developing physical stores across the country. RELX Technology, for example, received 30 percent of its revenues from online sales prior to the ban. In January 2020, the company pledged to invest more than CNY500 million over the three years to open 10,000 authorized sellers in China.
Some vapor companies welcomed the prospect of greater supervision over the e-cigarette sector in China. U.S.-headquartered Kaival Innovations Group, which distributes the Bidi Stick brand, said the announcement would have no effect on its operations.
“Having taken arduous and often herculean steps to remain compliant with all government regulations, Kaival Brands and the leadership at Bidi Vapor hope that additional supervision of e-cigarette manufacturing [in China] will help raise standards for the devices worldwide,” the company wrote in a press release.
Innokin, a major China-based vaping hardware manufacturer, announced its partnership with Fourier Technology in the development of Sensis, the first vaporizer that uses 4th-generation vape technology. The new innovation, alternating current mode (ACM), is inspired by Nikola Tesla, according to an Innokin press release. Earlier generations of vaping hardware used a direct current to power coils in a single direction, while ACM sends electricity through the coil in both directions.
Sensis, Innokin’s 4th generation vaping hardware
The mission behind the development of the ACM technology is to provide vapers with a better experience and to provide the vaping industry with new ways to grow and improve, according to Meredith Zhao, chief technology officer at Fourier Technology.
“We are looking forward to working with experienced users to discover the full potential of this exciting new vape technology in the hope of working together to create a smoke-free future,” said Zhao. “Alternating current mode introduces waveform frequency control to vaping. Vapers can now adjust the hertz frequency waveforms as well as the wattage output.”
The upgraded output provides several advantages over previous generation single-direction current devices. By selecting different types of waveforms and adjusting the frequency, the full spectrum of flavors can be produced from e-liquids and specific flavors are enhanced, according to the release. ACM increases the efficiency of heat transfer between the coil and e-liquid, which also extends coil life. “Alternating Current Mode has been shown to help extend coil life by increasing coil saturation and reducing carbon buildup on coils,” Zhao said.
First-generation vape technology was basic, where direct power output to the coils could not be adjusted. With the push of a button, or by simply inhaling, the battery heated coils, changing the e-liquid into vapor to deliver nicotine and flavors. Second-generation vape technology introduced variable voltage and variable wattage, where adjusting the power output to the coils increases or decreases heat to personal taste. Third-generation technology used temperature control with advanced chipsets and new types of coil materials.
ACM technology allows vapers to customize their vaping experience, according to the Fourier’s website. “ACM equips you with adjustable frequency and selectable AC wave-forms, which create a unique output curve,” the company states. “Power output repeatedly pulses the coil in both directions, heating e-liquid more efficiently, in a way that can be fine-tuned at any time.”
The China Patent Office has approved Next Generation Labs’ (NGL) patent application covering the process for the preparation of R-S [synthetic] nicotine, issue number 201580069647.2.
The approval will give NGL the ability to better enforce its intellectual property rights. NGL is the world’s largest manufacturer of S-isomer, R-S isomer and R-isomer synthetic nicotine sold under the registered brand name TFN.
According to NGL, the U.S. and Korean markets have been inundated with dozens of fake synthetic nicotine products and brands, and many manufacturers have misleadingly labeled bulk pure nicotine, bulk vape liquid mixtures and vaping and oral nicotine products as made with TFN. In many instances, the nicotine contained in these products is not synthetic, tobacco-free or non-tobacco, but is in fact derived from tobacco sources.
For almost a decade, NGL has spent considerable effort establishing a strong global intellectual property portfolio that has become distinctive of the company’s goodwill and of the high-quality adult consumers expect of TFN-branded nicotine.
NGL now intends to fully enforce its rights against many of these so-called synthetic nicotine brands.
NGL has been taking direct action in the United States and through its sole South Korean distribution partner NextEra to limit the misleading claims of unscrupulous sellers of pseudo-synthetic nicotine, and against manufacturers and brand owners who misrepresent that their product contains TFN branded synthetic non-tobacco-nicotine.
“With the assistance of the Chinese authorities, NGL now intends to fully enforce its rights against many of these so-called synthetic nicotine brands at their point of manufacture, and will take the lead with national customs agencies to limit the flow of fake synthetic nicotine products at trade exit and entry points in China, the U.S., EU, UK, South Korea, India, Canada, and Australia,” the company wrote in a press release.
The China-based vapor company RLX Technology Inc. has hired Lu Chao, Citigroup’s top Asia health-care investment banker, as its chief financial officer, according to people with knowledge of the matter.
Credit: RLX Technology
Lu, a managing director and head of Asia health-care investment banking at Citi, is expected to join the U.S.-listed e-cigarette maker as soon as March, the people said. Lu will help RLX Tech to identify expansion and investment opportunities in the health care industry that could apply its vaping technology, said the people, who asked not to be named as the information is private. He will still be based in Hong Kong, they said, according to an article by Bloomberg.
Lu, a Princeton University graduate, joined Citi in December 2013, according to his LinkedIn profile.
The company, which is known for its RELX-branded devices, raised about $1.4 billion in an initial public offering in the U.S. last month, according to data compiled by Bloomberg. Lu was a lead banker on the deal, the people said, as Citi and China Renaissance Holdings Ltd. arranged the offering.
Shares in RLX Tech have risen more than 75 percent since its January debut, giving the company a market value of about $32.7 billion.
Representatives for Citi and RLX Tech declined to comment.
