RLX Technology Announces First Quarter 2021 Unaudited Financial Results
RLX Technology (NYSE: RLX) reported its Q1 2021 financial results, with net revenues of RMB2,398.5 million (US$366.1 million), up 48.2% from Q4 2020. Gross margin improved to 46.0%, compared to 42.9% in the previous quarter, while GAAP net loss was RMB267.0 million (US$40.8 million). In contrast, non-GAAP net income rose by 45.6% to RMB610.5 million (US$93.2 million). The company maintains a positive outlook, projecting Q2 2021 revenues to exceed RMB2,850 million and non-GAAP net income over RMB720 million, amidst increasing distribution network expansion.
- Net revenues increased by 48.2% to RMB2,398.5 million (US$366.1 million) in Q1 2021.
- Gross margin improved to 46.0%, up from 42.9% in Q4 2020.
- Non-GAAP net income increased by 45.6% to RMB610.5 million (US$93.2 million).
- Strong balance sheet with cash and equivalents of RMB14,437.8 million (US$2,203.6 million) as of March 31, 2021.
- GAAP net loss of RMB267.0 million (US$40.8 million) in Q1 2021, up from RMB236.7 million in Q4 2020.
- Operating expenses rose by 42.6% to RMB1,216.0 million (US$185.6 million) in Q1 2021.
BEIJING, June 2, 2021 /PRNewswire/ -- RLX Technology Inc. ("RLX Technology" or the "Company") (NYSE: RLX), a leading branded e-vapor company in China, today announced its unaudited financial results for the first quarter ended March 31, 2021.
First Quarter 2021 Financial Highlights
- Net revenues were RMB2,398.5 million (US
$366.1 million ), representing an increase of48.2% from RMB1,618.5 million in the fourth quarter of 2020. - Gross margin was
46.0% , compared to42.9% in the fourth quarter of 2020. - GAAP net loss was RMB267.0 million (US
$40.8 million ), compared with RMB236.7 million in the fourth quarter of 2020. - Non-GAAP net income[1] was RMB610.5 million (US
$93.2 million ), representing an increase of45.6% from RMB419.3 million in the fourth quarter of 2020.
"2021 began, on a solid note, with strong growth in key performance metrics of our business," said Ms. Ying (Kate) Wang, Co-founder, Chairperson of the Board of Directors and Chief Executive Officer of RLX Technology. "Specifically, our expansion in distribution network fueled a strong sequential growth, further demonstrating sustained user demand for our e-vapor product portfolio."
"As the go-to brand of e-vapor products in China, we remain dedicated to investing in deepening our scientific research, improving our technology and product development, expanding our distribution network and retail outlets as well as enhancing supply chain and production capabilities. In the first quarter, we opened our Quality Lab to further strengthen our quality assurance and control capabilities, and started developing our second and third exclusive production plants to enhance our production capabilities. We believe we are well positioned to further capture the growth potential in the e-vapor industry in China," Ms. Wang concluded.
"Our robust results in the first quarter of 2021 exemplify our strong capabilities in meeting user demands for reliable, innovative and trustworthy products," said Mr. Chao Lu, Chief Financial Officer. "Building on rapid revenue growth and continued efforts in improving operating leverage, our gross margin and non-GAAP net margin have remained steady in the first quarter. We will continue to pursue user value creation by enhancing our suite of product offerings and strengthening our brand leadership in the market."
First Quarter 2021 Unaudited Financial Results
Net revenues increased by
Gross profit increased by
Gross margin increased to
Operating expenses were RMB1,216.0 million (US
Selling expenses increased by
General and administrative expenses increased by
Research and development expenses increased by
Share-based compensation expenses recognized in selling expenses, general and administrative expenses and research and development expenses in total were RMB877.5 million (US
Loss from operations was RMB111.9 million (US
Income tax expense was RMB176.3 million (US
GAAP net loss was RMB267.0 million (US
Non-GAAP net income was RMB610.5 million (US
GAAP basic and diluted net loss per American depositary share ("ADS") were both RMB0.174 (US
Non-GAAP basic and diluted net income per ADS[2] were both RMB0.398 (US
Balance Sheet
As of March 31, 2021, the Company had cash and cash equivalents, restricted cash, short-term bank deposits, short-term investments and long-term bank deposits of RMB14,437.8 million (US
Business Outlook
For the second quarter of 2021, the Company currently expects net revenues to exceed RMB2,850 million, and expects non-GAAP net income to exceed RMB720 million. The Company's expected GAAP net income will include share-based compensation expenses which depend on the Company's share price and are not available without unreasonable efforts. The Company currently also expects gross margin to remain steady.
The above outlook is based on the current market conditions, including those related to the COVID-19 pandemic, and reflects the Company's preliminary estimates of market and operating conditions, and users' demand, which are all subject to change. Please refer to "Safe Harbor Statement" in this press release for risks associated with forward-looking statements.
Conference Call
The Company's management will host an earnings conference call at 8:00 A.M. U.S. Eastern Time on June 2, 2021 (8:00 P.M. Beijing/Hong Kong Time on June 2, 2021).
Dial-in details for the earnings conference call are as follows:
United States (toll free): | +1-888-317-6003 |
International: | +1-412-317-6061 |
Hong Kong, China (toll free): | +800-963-976 |
Hong Kong, China: | +852-5808-1995 |
Mainland China: | 400-120-6115 |
Participant Code: | 1755332 |
Participants should dial-in at least 10 minutes before the scheduled start time and ask to be connected to the call for "RLX Technology Inc." with the Participant Code as set forth above.
Additionally, 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 June 9, 2021, by dialing the following telephone numbers:
United States: | +1-877-344-7529 |
International: | +1-412-317-0088 |
Replay Access Code: | 10156044 |
About RLX Technology Inc.
RLX Technology Inc. (NYSE: RLX) is a leading branded e-vapor company in China. The Company leverages its strong in-house technology and product development capabilities and in-depth insights into adult smokers' needs to develop superior e-vapor products. RLX Technology Inc. sells its products through an integrated offline distribution and "branded store plus" retail model tailored to China's e-vapor market.
For more information, please visit: http://ir.relxtech.com.
Non-GAAP Financial Measures
The Company uses Non-GAAP net income and Non-GAAP basic and diluted net income per ADS, each a non-GAAP financial measure, in evaluating its operating results and for financial and operational decision-making purposes. Non-GAAP net income represents net income excluding share-based compensation expenses. Non-GAAP basic and diluted net income per ADS is computed using Non-GAAP net income and the same number of ADSs used in GAAP basic and diluted net income/(loss) per ADS calculation.
The Company presents these non-GAAP financial measures because they are used by the management to evaluate its operating performance and formulate business plans. The Company believes that they help identify underlying trends in its business that could otherwise be distorted by the effect of certain expenses that are included in net income/(loss). The Company also believes that the use of the non-GAAP measures facilitates investors' assessment of its operating performance, as they could provide useful information about its operating results, enhances the overall understanding of its past performance and future prospects and allows for greater visibility with respect to key metrics used by the management in its financial and operational decision making.
The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools. They should not be considered in isolation or construed as an alternative to net income/(loss), basic and diluted net income/(loss) per ADS or any other measure of performance or as an indicator of its operating performance. Investors are encouraged to review its historical non-GAAP financial measures to the most directly comparable GAAP measures. The non-GAAP financial measures here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to our data. The Company encourages investors and others to review its financial information in its entirety and not rely on any single financial measure.
For more information on the non-GAAP financial measures, please see the table captioned "Unaudited Reconciliation of GAAP and non-GAAP Results" set forth at the end of this press release.
Exchange Rate Information
This announcement contains translations of certain RMB amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars and from U.S. dollars to RMB are made at a rate of RMB6.5518 to US
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "is/are likely to," "potential," "continue" and similar statements. Among other things, business outlook and quotations from management in this announcement, as well as the Company's strategic and operational plans, contain forward-looking statements. The Company may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including but not limited to statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the Company's growth strategies; its future business development, results of operations and financial condition; trends and competition in China's e-vapor market; changes in its revenues and certain cost or expense items; PRC governmental policies, laws and regulations relating to the Company's industry, and general economic and business conditions globally and in China and assumptions underlying or related to any of the foregoing. Further information regarding these risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided in this press release and in the attachments is current as of the date of this press release, and the Company does not undertake any obligation to update such information, except as required under applicable law.
For more information, please contact:
In China:
RLX Technology Inc.
Head of Investor Relations
Sam Tsang
Email: ir@relxtech.com
The Piacente Group, Inc.
Jenny Cai
Tel: +86-10-6508-0677
Email: RLX@tpg-ir.com
In the United States:
The Piacente Group, Inc.
Brandi Piacente
Tel: +1-212-481-2050
Email: RLX@tpg-ir.com
[1] Non-GAAP net (loss)/income is a non-GAAP financial measure. For more information on the Company's non-GAAP financial measures, please see the section "Non-GAAP Financial Measures" and the table captioned "Unaudited Reconciliation of GAAP and Non-GAAP Results" set forth at the end of this press release.
[2] Non-GAAP basic and diluted net income per ADS is a non-GAAP financial measure. For more information on the Company's non-GAAP financial measures, please see the section "Non-GAAP Financial Measures" and the table captioned "Unaudited Reconciliation of GAAP and Non-GAAP Results" set forth at the end of this press release.
RLX TECHNOLOGY INC. | |||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | |||
(All amounts in thousands, except for share and per share data, or otherwise noted) | |||
As of | |||
December 31 | March 31, | March 31, | |
2020 | 2021 | 2021 | |
RMB | RMB | US$ | |
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | 1,113,988 | 9,649,767 | 1,472,842 |
Restricted cash | 340,813 | - | - |
Short-term bank deposits | 493,282 | 250,000 | 38,157 |
Receivables from online payment platforms | 862 | 5,843 | 892 |
Short-term investment | 1,473,349 | 2,646,036 | 403,864 |
Accounts and notes receivable | 20,089 | 33,492 | 5,112 |
Inventories, net | 329,123 | 197,473 | 30,140 |
Amounts due from related parties | 21,006 | - | - |
Prepayments and other current assets | 74,383 | 129,112 | 19,706 |
Total current assets | 3,866,895 | 12,911,723 | 1,970,713 |
Non-current assets: | |||
Property, equipment and leasehold improvement, net | 74,500 | 80,610 | 12,303 |
Intangible assets, net | 5,393 | 4,858 | 741 |
Long-term investments | 4,000 | 12,000 | 1,832 |
Deferred tax assets | 6,000 | 817 | 125 |
Right-of-use assets, net | 91,743 | 97,634 | 14,902 |
Long-term bank deposits | - | 1,892,009 | 288,777 |
Other non-current assets | 11,354 | 25,691 | 3,921 |
Total non-current assets | 192,990 | 2,113,619 | 322,601 |
Total assets | 4,059,885 | 15,025,342 | 2,293,314 |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
Current liabilities: | |||
Accounts and notes payable | 1,459,782 | 1,561,471 | 238,327 |
Contract liabilities | 320,434 | 90,430 | 13,802 |
Salary and welfare benefits payable | 179,558 | 251,822 | 38,435 |
Taxes payable | 363,644 | 499,564 | 76,248 |
Accrued expenses and other current liabilities | 116,929 | 179,966 | 27,468 |
Amounts due to related parties | 11,174 | 6,174 | 942 |
Lease liabilities - current portion | 45,073 | 51,403 | 7,846 |
Total current liabilities | 2,496,594 | 2,640,830 | 403,068 |
Non-current liabilities: | |||
Deferred tax liabilities | 5,210 | 5,210 | 795 |
Lease liabilities - non-current portion | 49,448 | 49,701 | 7,586 |
Total non-current liabilities | 54,658 | 54,911 | 8,381 |
Total liabilities | 2,551,252 | 2,695,741 | 411,449 |
Shareholders' equity: | |||
Ordinary shares (US |
94 | 103 | 16 |
Additional paid in capital | 1,589,857 | 12,502,322 | 1,908,227 |
Statutory reserves | 1,000 | 1,000 | 153 |
Accumulated deficit | (81,640) | (348,669) | (53,218) |
Accumulated other comprehensive (loss)/income | (678) | 174,845 | 26,687 |
Total shareholders' equity | 1,508,633 | 12,329,601 | 1,881,865 |
Total liabilities and shareholders' equity | 4,059,885 | 15,025,342 | 2,293,314 |
RLX TECHNOLOGY INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) (All amounts in thousands, except for share and per share data, or otherwise noted)
| ||||
For the three months ended | ||||
March 31, | December 31, | March 31, | March 31, | |
2020 | 2020 | 2021 | 2021 | |
RMB | RMB | RMB | US$ | |
Net revenues | 368,602 | 1,618,451 | 2,398,496 | 366,082 |
Cost of revenues | (235,152) | (924,315) | (1,294,423) | (197,567) |
Gross profit | 133,450 | 694,136 | 1,104,073 | 168,515 |
Operating expenses: | ||||
Selling expenses | (74,065) | (196,683) | (291,535) | (44,497) |
General and administrative expenses | (33,685) | (447,045) | (712,814) | (108,797) |
Research and development expenses | (24,277) | (208,889) | (211,634) | (32,301) |
Total operating expenses | (132,027) | (852,617) | (1,215,983) | (185,595) |
Income/(loss) from operations | 1,423 | (158,481) | (111,910) | (17,080) |
Other income/(expense): | ||||
Interest income, net | 4,652 | 7,678 | 9,414 | 1,437 |
Investment income | 1,522 | 11,621 | 14,927 | 2,278 |
Others, net | 12,639 | 13,062 | (3,167) | (483) |
Income/(loss) before income tax | 20,236 | (126,120) | (90,736) | (13,848) |
Income tax expense | (8,137) | (110,625) | (176,293) | (26,908) |
Net income/(loss) | 12,099 | (236,745) | (267,029) | (40,756) |
Other comprehensive income/(loss): | ||||
Foreign currency translation adjustments | 722 | (14) | 175,523 | 26,790 |
Total other comprehensive income/(loss) | 722 | (14) | 175,523 | 26,790 |
Total comprehensive income/(loss) | 12,821 | (236,759) | (91,506) | (13,966) |
Net income/(loss) per ordinary share/ADS | ||||
- Basic | 0.008 | (0.165) | (0.174) | (0.027) |
- Diluted | 0.008 | (0.165) | (0.174) | (0.027) |
Weighted average number of ordinary shares/ADSs | ||||
- Basic | 1,436,815,570 | 1,436,815,570 | 1,532,086,681 | 1,532,086,681 |
- Diluted | 1,436,815,570 | 1,436,815,570 | 1,532,086,681 | 1,532,086,681 |
RLX TECHNOLOGY INC. UNAUDITED RECONCILIATION OF GAAP AND NON-GAAP RESULTS (All amounts in thousands, except for share and per share data, or otherwise noted)
| ||||
For the three months ended | ||||
March 31, | December 31, | March 31, | March 31, | |
2020 | 2020 | 2021 | 2021 | |
RMB | RMB | RMB | US$ | |
Net income/(loss) | 12,099 | (236,745) | (267,029) | (40,756) |
Add: share-based compensation expenses | ||||
Selling expenses | 3,626 | 123,270 | 120,703 | 18,423 |
General and administrative expenses | 4,922 | 367,426 | 618,493 | 94,401 |
Research and development expenses | 5,255 | 165,395 | 138,313 | 21,111 |
Non-GAAP net income | 25,902 | 419,346 | 610,480 | 93,179 |
Non-GAAP net income per ordinary share/ADS | ||||
- Basic | 0.018 | 0.292 | 0.398 | 0.061 |
- Diluted | 0.018 | 0.292 | 0.398 | 0.061 |
Weighted average number of ordinary shares/ADSs | ||||
- Basic | 1,436,815,570 | 1,436,815,570 | 1,532,086,681 | 1,532,086,681 |
- Diluted | 1,436,815,570 | 1,436,815,570 | 1,532,086,681 | 1,532,086,681 |
RLX TECHNOLOGY INC. | |||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||
(All amounts in thousands, except for share and per share data, or otherwise noted) | |||||
For the three months ended | |||||
March 31, | December 31, | March 31, | March 31, | ||
2020 | 2020 | 2021 | 2021 | ||
RMB | RMB | RMB | US$ | ||
Net cash (used in)/generated from operating activities | (70,091) | 1,290,121 | 827,565 | 126,311 | |
Net cash (used in)/generated from investing activities | (1,067,102) | 829,504 | (2,814,247) | (429,538) | |
Net cash generated from/(used in) financing activities | 816,320 | (1,200,659) | 10,037,422 | 1,532,010 | |
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | 7,665 | (10,666) | 144,226 | 22,013 | |
Net (decrease)/increase in cash and cash equivalents and restricted cash | (313,208) | 908,300 | 8,194,966 | 1,250,796 | |
Cash, cash equivalents and restricted cash at the beginning of the period | 484,092 | 546,501 | 1,454,801 | 222,046 | |
Cash, cash equivalents and restricted cash at the end of the period | 170,884 | 1,454,801 | 9,649,767 | 1,472,842 | |
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SOURCE RLX Technology Inc.
