RELX Parent RLX Technology Reports Q2 Revenue of RMB 380 Million, Up 100.2% Quarter on Quarter

On the evening of August 18, RELX<\/strong>'s parent company RLX Technology<\/strong> (RLX Technology Inc.) disclosed its unaudited financial report for the second quarter of 2023.<\/p>

The report shows that RLX Technology's net revenue for the second quarter of 2023 was RMB 380 million (USD 52.15 million), a quarter-on-quarter increase of 100.2% and a year-on-year decrease of 83.1%. The gross margin for the second quarter of 2023 under non-GAAP was 26.1%. The adjusted net profit for the second quarter was RMB 86.23 million (USD 11.89 million).<\/p>

As of June 30, 2023, RLX Technology had cash and cash equivalents, restricted cash, short-term bank deposits, short-term investments, long-term bank deposits, and long-term investment securities totaling RMB 15.79 billion (USD 2.18 billion).<\/p>

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RLX Technology's revenue surged quarter-on-quarter but decreased year-on-year<\/strong><\/p>

    Industry insiders believe that the financial report of the leading e-cigarette<\/strong> company serves as a barometer for the industry. The significant year-on-year decline for RLX Technology reflects that the e-cigarette industry chain is still in a painful transition period, while the substantial quarter-on-quarter increase indicates that the industry is becoming more regulated under the new national standards.<\/p>

"In the second quarter of 2023, despite the external environment remaining severe, we remain committed to providing high-quality compliant products for adult smokers and continue to invest in new product development to meet the ever-changing needs of users," stated Wang Ying, founder, chairman, and CEO of RLX Technology.<\/p>

She mentioned, "The recent resurgence of illegal products has affected the pace of industry recovery, but we believe these disruptions are only temporary, and national standard products will gradually replace inferior illegal products and gain user trust. The company will continue to prioritize product innovation and quality control in its future work, further enriching and optimizing the product portfolio to create value for all stakeholders."<\/p>

RLX Technology's CFO Lu Chao also mentioned: "In the face of external challenges, especially the interference of illegal products, the company remains focused on improving operational efficiency and profitability. The company's operating cash flow has also turned to net inflow for the first time since the implementation of the new industry regulations. We believe that the company's ample cash reserves will continue to support us in navigating the changing market."<\/p>

The repair of the e-cigarette market<\/strong> under the new national standards is still ongoing.<\/p>

    Recently, Zhang Jianmin, Secretary of the Party Leadership Group and Director of the National Tobacco Monopoly Bureau, conducted research on the legalization and regulation of the e-cigarette industry in Shenzhen, pointing out that the Shenzhen Municipal Bureau's Party Leadership Group fully implements the deployment requirements of the National Bureau, closely combines with the actual situation of the Shenzhen e-cigarette industry, insists on strengthening e-cigarette regulation according to law, actively guides e-cigarette companies<\/strong> to operate legally, and strives to standardize the order of the e-cigarette market, promoting the comprehensive legalization and regulation of the Shenzhen e-cigarette industry.<\/p>

At the same time, the guidelines formulated by the National Tobacco Monopoly Bureau regarding the promotion of the construction of a quality assurance system for exported e-cigarette products<\/strong> indicate that enterprises are to be clearly identified as the main body responsible for the construction of the quality assurance management system for exported e-cigarette products; the main content of the quality assurance management system for exported e-cigarette products includes quality safety standards, sorting process flows, equipping production resources, improving various systems, standardizing product packaging, tracing logistics transportation, and export declaration and filing; and specific requirements for the construction of the quality assurance management system for exported e-cigarette products are to be clarified.<\/p>

"The gradual implementation of e-cigarette regulatory policies actually brings new hope to the e-cigarette industry<\/strong>." Financial commentator Wang Chikun stated in an interview with Dahe Caijing reporters, indicating that the strengthening of regulation signifies that the industry is moving towards maturity. As the e-cigarette market gradually becomes more regulated, self-discipline within the e-cigarette market will also gradually form, and relevant laws and regulations will clarify the responsibilities and obligations of enterprises.<\/p>

Industry insiders also noted that the entire e-cigarette industry is returning to normal. Although there are certain difficulties in investigating small-scale illegal products, the overall trend of the industry will not change. With the further repair of the market, large-scale enterprises still have the possibility of returning to the mean. "Bidding farewell to the era of reckless growth is essential to complete the transition from chaos to order, and this transformation is worth looking forward to."<\/p>