Tag: RELX

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
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
RELX International Steps Up Efforts to Curb Youth Use
RELX International recently launched its initiative to boost efforts to prevent youth use of vaping products. The initiative, RELX Pledge, is guided by three key pillars: Guardian program, Golden Shield and Green Shoots, according to a release.
The Guardian program is an initiative that stretches from product development to sales, preventing and discouraging the use of vape products by minors through joint efforts with retailers to step up on-site identification, according to RELX’s head of marketing, Leina Chedid.
“Since our inception, youth prevention has been an integral part of RELX International’s core company values. Our Guardian program applies across all our sales and marketing and supports effective legislation and regulation to prevent the purchase and use of our products by minors,” she said.
The Golden Shield program aims to end the sale of counterfeit products by working closely with investigation firms, e-commerce platforms and local authorities to weed out such products from the market, according to RELX’s global head of external affairs Jonathan Ng. He said that through Golden Shield RELX has assisted in 28 successful cases, removing over 550,000 fake products from the market and over 77,000 websites since 2019.
Green Shoots program is an initiative created to give back to the community, using the brand’s experience to help aspiring entrepreneurs and small business owners get their businesses on the track to growth and success, according to NG
“Startups and small businesses are the economic backbone of societies around the world. As a company that grew from a startup ourselves, we understand the numerous challenges that small businesses encounter daily. Through the Green Shoots program, we hope to share our experience and knowledge to help them get on the right track towards growth and success,” he said. “Protecting minors is an issue we take very seriously, as our pledge commitment shows. We sincerely hope that others in the industry take this lead and also commit to this new era of responsibility.”
Components of the RELX Pledge will be rolled-out globally (excluding Mainland China and the United States) throughout 2021, and will be further enhanced in 2022, according to the release. The RELX Pledge will be localized in countries in which RELX International holds a market presence to account for applicable local customs, cultures and traditions.
July 6, 2021
Plaintiffs Sought in RLX Technology Class-Action Suit
Wolf Haldenstein Adler Freeman & Herz LLP are now seeking additional plaintiffs for a federal securities class action lawsuit that has been filed in the United States District Court for the Southern District of New York on behalf of investors that purchased RLX Technology Inc. The lawsuit was filed by Glancy Prongay & Murray LLP on behalf of investors.
The filed complaint alleges that the Registration Statement misrepresented and omitted, among other things, RLX’s exposure to China’s then-existing campaign to establish a national standard for e-cigarettes that would bring them into line with regular cigarette regulations, according to a press release.
“The truth was revealed when draft regulations were posted by the Ministry of Industry and Information Technology, before the market opened on March 22, 2021, eight weeks after RLX’s IPO, which confirmed e-cigarettes and new tobacco products would be regulated similar to traditional tobacco offerings,” the release states.
Following the news out of China, the price of RLX’s shares suffered an enormous decline. On March 22, 2021, RLX’s ADR closed at $10.15 per share, down nearly 48 percent from its previous close of $19.46 on March 19, 2021, the previous trading day.
June 21, 2021
Myst Raises ‘Tens of Thousands’ in New Funding
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.
May 7, 2021
RELX: Common Coolant Agent Not Toxic to Test Animals

Photo: Tobacco Reporter archive
The WS-23 cooling agent has limited impact on the experiment animals at the tested dose, according to a study performed by RLX Technology and published in the Journal of Applied Toxicology.
The RLX Technology study showed that there were no deaths in any of WS-23 treated groups in the acute and subacute inhalation studies, with no remarkable changes occurred in body weight, organ weight, hematology and serum biochemistry and no toxic effects in the histopathologic analysis.
It was the first study published on the Science Citation Index (SCI) indexed journal conducted by the Chinese e-cigarette industry.
WS-23 is a well-known artificial synthesis cooling agent widely used in foods, medicines and tobaccos. As a common cooling agent in e-cigarette liquids, WS-23 has led to concerns about the inhalation toxicity with the proliferation of e-cigarettes in recent years. The study shows that at the tested dose level, inhalation of WS-23 will not bring toxic side effect to test animals.
“Product safety has always been RLX’s top concern, and it is also the direction and commitment in our research and development,” said Xingtao Jiang, head of RELX Lab, which is part of RLX Technology, in a statement. Before the study was published, RELX Lab conducted vitro tests to prove the aerosol containing WS-23 is safe to use in the products.
April 6, 2021
RELX Launches ‘Infinity and Essential’ E-cigs in Colombia

Photo: RELX International
RELX International will launch its next-generation e-cigarettes, the Infinity and Essential, in Colombia this month. The Infinity features RELX International’s latest innovations in product design, vapor quality, mobility and overall user experience. The Essential allows users to experience key elements of the Infinity’s design at a more accessible price point.
According to RELX, Infinity and Essential feature a full flavor and smooth puff due to the independently-developed Super Smooth Performance technology. With more than a year dedicated to the design process, this data-driven technology was developed by defining five key elements that constitute the perfect puff. This technology was perfected through 76 sensory tests and repeated refinements of the parameters measuring RELX Super Smooth Performance.
RELX International will launch its next-generation e-cigarettes, the Infinity and Essential, in Colombia this month. The Infinity features RELX International’s latest innovations in product design, vapor quality, mobility and overall user experience. The Essential allows users to experience key elements of the Infinity’s design at a more accessible price point.
Our goal is to help smokers who cannot or do not want to quit, to transition to a better alternative with confidence.
Bing Du, CEO, RELX International
RELX International will launch its next-generation e-cigarettes, the Infinity and Essential, in Colombia this month. The Infinity features RELX International’s latest innovations in product design, vapor quality, mobility and overall user experience. The Essential allows users to experience key elements of the Infinity’s design at a more accessible price point.
According to RELX, Infinity and Essential feature a full flavor and smooth puff due to the independently-developed Super Smooth Performance technology. With more than a year dedicated to the design process, this data-driven technology was developed by defining five key elements that constitute the perfect puff. This technology was perfected through 76 sensory tests and repeated refinements of the parameters measuring RELX Super Smooth Performance.
The design of the Infinity device was optimized more than 40 times and more than 12,000 pods were tested to ensure leak resistance and high-quality standards. Patent applications have been submitted for more than 50 innovations used in the device, including its leak-resistant design, e-liquid pods and wireless charging case. In March 2020, the Infinity was awarded the Red Dot Award: Product Design 2020.
“I’m proud of the entire RELX global team for creating this beautifully-designed Infinity device with superior technology, and with a dedication to innovation that we are now known for worldwide,” said RELX International CEO Bing Du in a statement. “Ultimately our goal is to help current smokers who cannot or do not want to quit, to transition to a better alternative with confidence. The more budget-friendly Essential device also allows users to experience RELX’s premium quality features”.
March 30, 2021
China Vows to Regulate Vapor, RLX Stock Tumbles
China’s Ministry of Industry and Information Technology (MIIT) and the State Tobacco Monopoly Administration announced today the Chinese government’s intent to overhaul rules governing the vapor and electronic nicotine-delivery systems (ENDS) market. The news started a swift downfall of shares of RLX Technology, parent to RELX, China’s largest e-cigarette brand, on the New York Stock Exchange. At 2:45pm today, RLX was down nearly 45 percent to $10.69 per share after recent high of $19.46 per share on March 19.
Credit: RLX Technology
Draft regulations posted online by MIIT suggest it will seek to regulate these products similarly to ordinary cigarettes. The ministry is seeking public comments on the draft regulations until April 22. The implications of the draft regulations could be wide-ranging as, with an estimated 300 million smokers, China is considered the world’s largest market for tobacco product.
“In order to implement the decision-making and deployment of the CPC Central Committee and the State Council, further strengthen the supervision of new tobacco products such as e-cigarettes, and safeguard the legitimate rights and interests of consumers, we have drafted the Decision on Amending the Regulations on the Implementation of the Tobacco Monopoly Law of the People’s Republic of China,” the rule states. “The amendment is mainly to implement the requirements of the CPC Central Committee and the State Council on promoting the rule of law in the supervision of e-cigarettes , to clarify the legal basis for the supervision of new tobacco products such as e-cigarettes , and to do a good job in connecting with laws and regulations such as the Law of the People’s Republic of China on the Protection of Minors, so as to play an important role in strengthening the rule of law , stabilizing expectations and promoting the long-term.”
RLX Technology raised $1.4 billion during its initial public offering (IPO) in January this year. It sold 116.5 million shares with a target price of between US$8 and US$10 a share. Its successful market debut turned its 39-year-old founder, Wang Ying, into a billionaire overnight with an estimated net worth of $24.8 billion.
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. According to the China-based Electronic Cigarette Industry Committee, China’s 2020 e-cigarette sales were an estimated 14.5 billion RMB yuan ($2.2 billion), an increase of 30 percent from 2019 (11.2 billion RMB yuan). According to Grandview Research, the US e-cigarette market in 2019 and was valued at $5.34 billion and is expected to reach $6.50 billion in 2020.
RELX recently announced its partnership 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 September 30, 2020 to $324 million, with a net income of $16 million, the latest figures available at the time of this writing.
But tobacco companies are increasingly facing scrutiny from regulators in China. Currently, the only regulatory actions taken by Chinese authorities are in 2018, the country made it a crime to sell a vapor product to anyone under 18 years of age and then, in November 2019, an online sales ban was implemented in order to further 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.
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 10.8 trillion yuan ($1.5 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.
Wang told Reuters in a recent news article 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.”
March 22, 2021
RLX Technology Hires Citigroup Dealmaker as CFO
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.
February 22, 2021
RELX More Than Doubles Value in Opening IPO
Chinese e-cigarette maker RLX Technology, parent to the RELX brand, jumped 146 percent in its trading debut after raising $1.4 billion in its U.S. initial public offering.
Creit: RELX
RLX Technology’s American depositary shares closed at $29.51 Friday, giving the company a market value of about $46 billion. Backed by Sequoia Capital China, the company sold 116.5 million shares for $12 a piece on Thursday after marketing them for $8 to $10.
The IPO was led by Citigroup Inc. and China Renaissance Holdings Ltd. The company’s ADS, each representing one ordinary share, are trading on the New York Stock Exchange under the symbol RLX.
The IPO, the first major U.S. listing this year by a China-based company, signals continuing investor demand, according to Bloomberg.
RLX, founded in 2018, is China’s largest e-cigarette maker with 62.6 percent of the country’s market, according to a report by China Insights Consultancy cited in the company’s IPO prospectus.
China is the world’s largest potential vaping market, with an estimated 286.7 million adult smokers in 2019, RLX said in its prospectus. But vaping products only have a 1.2 percent penetration rate, compared with 32.4 percent in the U.S.
January 25, 2021