RLX Technology, parent to the RELX brand of vaping products, has filed with the Security Exchange Commission (SEC) in the U.S. to raise up to $100 million in an initial public offering (IPO).
Credit: RELX Technology
The $100 million request is well below the $1 billion the company said it expected to raise when it announced Citigroup as the bank of record for its planned initial public offering in the U.S., people with knowledge of the matter said.
The Shenzhen-based company, which counts Sequoia Capital among its backers, boasts a 62.6 percent market share in China for closed-system vaping products in terms of retail sales, according to a press release.
“The company 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,” the release states.
Revenue for the company nearly doubled in the nine months ended September 30, 2020 to $324 million, with net income of $16 million.
The Beijing, China-based company was founded in 2018 and booked $400 million in sales for the 12 months ended September 30, 2020. It plans to list on the NYSE under the symbol RLX. RLX Technology filed confidentially on October 26, 2020. Citi is the sole bookrunner on the deal. No pricing terms were disclosed.
The IECIE Shanghai Vape Culture Week (IECIE Shanghai) will be held from 18-20 of May, 2021. Hosted by Shenzhen Informa Markets Creativity Exhibition Co., IECIE Shanghai will take place at the Shanghai New International Expo Center. The show will occupy an exhibition area of 12,000 square meters and is expected to attract more than 20,000 visitors and more than 300 exhibitors from around the world.
The IECIE Shenzhen Expo is scheduled for September 3-5 2021. This makes the IECIE Shanghai the first large-scale professional e-cigarette exhibition of 2021 in China. “As a professional e-cigarette exhibition in the domestic vertical field that opens throughout the year, IECIE Shanghai casts irreplaceable influence on the industry,” a press release states. “It will not only provide a trade platform for exhibitors and professional visitors to communicate and reach a deal, but also a booster to promote product technology innovation and industry development.”
IECIE Shanghai will not only meet the needs of e-cigarette companies for new product launches and overseas promotion, but also meet the purpose of vape store purchases and mass consumers to try new products, according to the release. Typically, the IECIE Shenzhen is held in April and is the first trade show for vapor products to provide a platform to new product launches and displays for global e-cigarette brands. April-May has also become the agreed-upon peak season for new product launches in the industry
IECIE Shanghai aims to focus on functional e-cigarettes and heat-not-burn devices. The Shanghai show will include the “World Vape Championship”, “Infinite E-liquid Station”, and “Vape Map Member Day.” For more information, visit https://en.iecie.com/
China’s vapor market has mushroomed offline after the country banned online sales of e-cigarettes about a year ago, reports Bloomberg. Not even the coronavirus has stopped the expansion.
RELX Technology, the country’s largest player, opened more than 1,000 stores in the first half of 2020, and said in January it planned to add 10,000 outlets within the next three years. Its rival, Yooz, has also boosted the number of stores.
Shares in Smoore International Holdings, the world’s largest maker of vaping devices and components for brands, have more than quadrupled in value since the company’s July debut, making it one of Hong Kong’s best-performing initial public offerings of the year. RELX and Yooz are both clients of Smoore.
Smoore founder Chen Zhiping’s net worth has surged to $14.2 billion, according to the Bloomberg Billionaires Index.
While the coronavirus outbreak affected Smoore’s production and operations in the first quarter of the year, it still managed to post a 19 percent increase in revenue to CNY3.9 billion ($592 million) for the first six months, with more than half of its sales coming from mainland China and Hong Kong.
Smoore held one-sixth of the global market share for vaping products by revenue last year, and that pie is poised to grow further, according to Frost & Sullivan data it cited in its prospectus. The $36.7 billion global e-cigarette market will reach $111.5 billion by 2024, increasing at an annual compound rate of 25 percent, projections show.
Mounting restrictions on vapor products globally, including a ban on certain e-cigarette flavor in the world’s largest vapor market, the United States, haven’t scared off investors. Stocks linked to China’s consumer sector have been particularly popular this year as the nation has been among the first to emerge from the pandemic.
The Chinese government may tighten its grip on e-cigarettes, according to a new report from eCigIntelligence.
Legally, the China National Tobacco Co. (CTNC) has a monopoly over both combustible and vapor products, but the organization has not exercised its authority to date. According to the report, that could change in the future.
There are three possible scenarios, according to the market intelligence provider: “One possible scenario is that the government may allow private companies to continue operations but under close observation to ensure their products do not target non-smokers or minors.
“The government could also decide to crack down on the e-cig market, which as the report explains would have a significant negative impact on the growth in sales of tobacco-alternative products in the country. A third scenario would involve the China National Tobacco Company extending its existing control over traditional cigarettes to vaping products.”
Chinese authorities helped Juul Labs close down a manufacturer that allegedly counterfeited Juul brand vaping devices and sold the fake products overseas.
The operation was one of the largest ever broken up by the e-cigarette maker in its efforts to crack down on potentially dangerous counterfeit products that could make their way to underage buyers, company officials say.
According to a story in the New York Post, Shenzhen Kang Erqiang Electronic Technology Co. — which hawked bogus Juul vape devices and flavor pods under the name Sourvape Technology — sold about $324,000 worth of counterfeit items over a 16-month period starting in 2018, Juul said.
“While these are the numbers Chinese authorities used in court during prosecution, actual sales could be far more significant,” said Adrian Punderson, Juul’s vice president of brand enforcement.
The probe led to the August conviction of the Shenzhen factory’s operator, who confessed to his involvement in the scheme and was sentenced to more than three years in prison, Punderson said. Juul said it was informed of the conviction earlier this month.
The operation courted e-cigarette retailers and distributors with email blasts boasting about how perfectly it could produce Juul’s packaging, according to the startup. Juul officials learned about these emails in February 2019 and started an investigation, posing as a buyer to try and identify who was behind the scheme, the company said.
Juul reps ultimately got inside the counterfeiter’s factory in March of last year, where about 15 employees worked to churn out fake Juul products six days a week, according to the company, according to the story.
Juul said the operation was even producing pods in flavors such as mango and cucumber, which the company stopped selling in the US last year amid concerns about teens getting hooked on its e-cigarettes.
Juul passed on its findings to Chinese authorities, who launched their own probe and eventually seized 14,600 bogus items when they raided the factory in April 2019, according to Juul.
Juul says its efforts to crack down on counterfeiters have led to the seizure of more than 600,000 items worth close to $4 million over the past year. The shady manufacturers — who primarily operate in China — sell their products for as much as 65 percent below Juul’s standard wholesale price, but those products could be dangerous because they’re made in unsanitary conditions without proper testing or quality control, according to the company.
“As a leader in vapor technology, it is our obligation to support enforcement against illicit and illegal products as we strive to reset the vapor category and earn a license to operate in society,” Punderson said in a statement.
One of China’s most adamantly anti-smoking cities has vowed to stop selling e-cigarettes near schools and reduce children’s exposure to secondhand smoke at home as part of a new “smoke-free communities” campaign.
In a more focused update to its “smoke-free city” campaign launched in 2018, the southern metropolis of Shenzhen pledged Saturday to strictly prohibit the sale of not only tobacco products but also e-cigarettes within 50 meters of primary and middle schools, according to Sixth Tone’s sister publication The Paper.
The city is also aiming to reduce primary and middle schoolers’ exposure to secondhand smoke at home to below 20% while raising the proportion of “smoke-free families” to at least 50% in three years — though it’s unclear how the success rates will be measured. Some doctors believe that, because secondhand smoke can cause a variety of diseases in children, from asthma and pneumonia to lung cancer and sudden infant death syndrome, it is equivalent to child abuse.
The smoke-free communities campaign, jointly announced by Shenzhen’s civilization and tobacco control offices, will be enforced alongside the city’s official smoking control regulation, last updated in July 2019. While other Chinese cities have also taken steps to curb smoking and vaping, Shenzhen’s are widely regarded as the most comprehensive in the country.
China’s tobacco regulator has just concluded a two-month blitz on the e-cigarette market, which took aim at illicit online marketing and sales to minors.
E-cigarettes have repeatedly come into the regulatory crosshairs in China, as authorities sought to restrict how they can be sold based on concerns over their potential health impact and use by under-18s. Eye-catching designs and flavors have been blamed for a spike in young nonsmokers taking up the devices, according to a story on caixinglobal.com.
The State Tobacco Monopoly Administration (STMA) and the State Administration for Market Regulation jointly said Wednesday they had removed over 23,000 videos and links promoting the products from the internet and shuttered almost 5,000 sales platforms.
Smoore International has raised $918 million in its initial public offering (IPO) at the Hong Kong Stock Exchange, reports Reuters. The deal is the largest IPO in Hong Kong since the start of 2020.
The Shenzhen, China-based firm offered 574 million shares, according to the company’s prospectus, and had indicated the stock would be priced between HKD9.60 ($1.24) and HKD12.40 per share.
The largest investors were Huaneng Trust, which took $80 million worth of stock, and Prime Capital which took $50 million, according to Smoore’s prospectus.
In 2019, Smoore reported a profit of CNY2.17 billion ($307.8 million), up from CNY733.9 million one year earlier.
Smoore is due to start trading on the Hong Kong Stock Exchange on Friday.
Informa Markets Creative has announced it will hold the IECIE Shenzhen e-cigarette expo on August 20-22. The event will also be held virtually, simultaneously as the live event. The cost is $10 before July 20 and $20 after that date.
“This virtual expo is estimated to attract 10,000 vape users across the world, bringing more than 2500 vape exhibitors to go virtually to engage business online through any devices,” a press release states. “It’s especially designed to allow private business video/text chatting, business arrangement with vape brands and new product live showcases and multiple features to audiences.”
Visitors can login to the virtual expo beginning July 20 until August 20 to review all the vape brands profiles and product catalogs, the release states. Meanwhile exhibiting products preview and business meeting arrangements between visitors and exhibitors are also available during this period. All the private business meetings can be directly carried out inside the virtual expo in 3 days during 20-22 August.
IECIE Shenzhen eCig Expo is the largest e-cigarette exhibition in Asia, bringing together upstream industries, battery and power management Chips and Solutions, Battery and Power Management, Heating System, E-juice Flavors and Related Products while mainly displaying some finished products : Disposable pods, atomizer, mods kits, e-liquid (letter nicotine salt e-liquid), heating non-combustion equipment, OEM / ODM / brand , etc, according to the release.
The 2020 IECIE Virtual Expo has several features, including:
An AI buyer recommendation system
Adopting AI EXPO artificial intelligence platform to collect key information from visitor registration form and clicks, recommend products of corresponding exhibitor company to visitors. Once attendees enter the virtual expo, they will be asked to choose from a range of interests from product like mods, pods system to fields like vape businesses and even vape magazines. With these tags, attendees can filter all the exhibitors in the hall to locate their most wanted targets by clicking recommend button on the upside of the floorplan and making their way to the targeted exhibitor.
A Show Room
Multi-platform live broadcasting ensuring smooth and clear video during the exhibition. With a cloud system support, IECIE virtual expo enables visitors to video chat, text chat, voice chat, and even watch the on-site broadcasting from IECIE physical event.
A business matching system
The business matching system will allow for making appointments for business negotiations in advance, multimedia communication with buyers (video, Voice chatting etc.) and efficiently arrange private product demonstration for visitors.
Push notifications for SMS and Email
SMS or email reminder outside the platform will allow attendees to never let go of any message. Once business meeting requirements have been approved, the notification will be sent to an attendee via email or SMS so that they won’t miss any requests, according to the release.
In a first for China, a store owner in Shenzhen has been fined 2,000 yuan ($280) for failing to display required warnings against smoking, according to local news outlet Yangcheng Evening News.
The report said the shop had flouted Shenzhen’s recently updated regulations banning vaping indoors and selling e-cigarettes on WeChat, China’s most widely used social app. In addition, two people who had been vaping inside the store were fined 50 yuan each, according to a story posted on sixthtone.com.
Xiong Jingfan, the manager of Shenzhen’s “smoke-free city” campaign, told Yangcheng Evening News that selling e-cigarettes on social platforms — despite being prevalent across the country — had become illegal under the recent ban.
In 2019, Shenzhen authorities amended the definition of a “cigarette” in the city’s smoking regulation to include e-cigarettes. Under the law’s new interpretation, shops selling such products were required to post two warning signs at visible locations: one stipulating that smoking is harmful to one’s health, and another noting that cigarettes cannot be sold to minors.
The regulation also forbids vaping indoors and in public places.
Despite the city’s stringent ban, Shenzhen is the world’s largest e-cigarette producer, accounting for around 90 percent of the global market share.
This is not the first time China has attempted to crack down on the domestic e-cigarette industry. Last November, the country’s state tobacco monopoly issued a nationwide e-cigarette ban, suspending the online sale and advertisement of such products. The ban, dubbed the “winter of e-cigarette merchants,” was aimed at keeping e-cigarettes out of the hands of minors. In 2018, China Tobacco had prohibited merchants from selling e-cigarettes — collectively referred to as Electronic Nicotine Delivery Systems, or ENDS — to minors.
Shenzhen’s restrictions on e-cigarettes attracted controversy online, however, after many netizens pointed out the authorities’ apparent double standard when it comes to smoking — namely, that regulations on cigarettes, which are sold by the government, are still relatively lax.
