RLX Technology Extends US$500 Million Share Repurchase Program

Rhea-AI Summary

RLX Technology Inc. (NYSE: RLX) extends share repurchase program, authorizing up to US$500 million for additional 24 months. As of December 28, 2023, the Company had repurchased approximately US$193.5 million of its ordinary shares represented by ADSs.

Insights

Financial Analyst

The extension of RLX Technology's share repurchase program represents a significant commitment to shareholder value. The company's decision to continue repurchasing shares up to US$500 million underscores a confidence in its financial stability and a surplus of liquid assets. By reducing the number of shares outstanding, the earnings per share (EPS) metric, a key indicator of corporate profitability, could potentially increase, making the stock more attractive to investors.

However, the market often views buybacks with caution, as they can sometimes signal a lack of profitable investment opportunities within the company. In this case, it's crucial to assess RLX Technology's growth prospects and operational performance to determine if this capital allocation is the most effective use of its cash reserves. The company's future earnings reports and strategic announcements will be pivotal in evaluating the impact of this decision.

Market Research Analyst

The e-vapor industry is subject to regulatory scrutiny and consumer trends that can significantly impact companies like RLX Technology. The repurchase program could be a strategic move to bolster investor sentiment amidst such uncertainties. This action might indicate that the company believes its stock is undervalued and it's seizing the opportunity to buy back shares at a lower price.

It's also important to note that share repurchase programs can affect market liquidity and volatility of the stock. The reduced share supply can lead to price stabilization or even appreciation, which may benefit current shareholders. However, investors should also consider the industry's competitive landscape and regulatory environment, as these factors will continue to influence RLX Technology's market performance.

Economist

RLX Technology's repurchase plan can be seen as a microeconomic decision with macroeconomic implications. From a broader economic perspective, such corporate behavior might reflect on the company's perspective of the economy. If the firm anticipates an economic downturn, a buyback could be a defensive strategy to shore up the stock price.

Furthermore, the funding of repurchases from existing cash balances suggests a strong liquidity position, which can be reassuring for investors during volatile economic periods. Nevertheless, the opportunity cost of not investing in expansion or research and development must be considered, as it could potentially hinder long-term growth in favor of short-term stock performance.

BEIJING, Dec. 29, 2023 /PRNewswire/ -- RLX Technology Inc. ("RLX Technology" or the "Company") (NYSE: RLX), a leading global branded e-vapor company, today announced that its board of directors has authorized the extension of its existing share repurchase program established in December 2021 for an additional 24-month period through December 31, 2025. Under the existing share repurchase program, the Company may repurchase up to US$500 million of its ordinary shares represented by ADSs until December 31, 2023. As of December 28, 2023, the Company had repurchased approximately US$193.5 million of its ordinary shares represented by ADSs. 

The Company's proposed repurchases may be made from time to time on the open market at prevailing market prices, in privately negotiated transactions, in block trades, through structured or derivative transactions and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations. The Company's board of directors will review the share repurchase program periodically, and may authorize adjustment of its terms and size. The Company expects to fund the repurchases out of its existing cash balance.

About RLX Technology Inc.

RLX Technology Inc. (NYSE: RLX) is a leading global branded e-vapor company. The Company leverages its strong in-house technology, product development capabilities, and in-depth insights into adult smokers' needs to develop superior e-vapor products.

For more information, please visit: http://ir.relxtech.com.

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, 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 Capital Markets
Sam Tsang
Email: ir@relxtech.com 

Piacente Financial Communications
Jenny Cai
Tel: +86-10-6508-0677
Email: RLX@tpg-ir.com 

In the United States:

Piacente Financial Communications
Brandi Piacente
Tel: +1-212-481-2050
Email: RLX@tpg-ir.com

View original content:https://www.prnewswire.com/news-releases/rlx-technology-extends-us500-million-share-repurchase-program-302023621.html

SOURCE RLX Technology Inc.

FAQ

What is the news about RLX Technology Inc. (NYSE: RLX)?

RLX Technology Inc. (NYSE: RLX) has extended its existing share repurchase program for an additional 24-month period through December 31, 2025, authorizing up to US$500 million.

How much has RLX Technology Inc. (NYSE: RLX) repurchased as of December 28, 2023?

As of December 28, 2023, the Company had repurchased approximately US$193.5 million of its ordinary shares represented by ADSs.

How will RLX Technology Inc. (NYSE: RLX) fund the repurchases?

The Company expects to fund the repurchases out of its existing cash balance.

What are the methods through which RLX Technology Inc. (NYSE: RLX) may make the proposed repurchases?

The Company's proposed repurchases may be made from time to time on the open market at prevailing market prices, in privately negotiated transactions, in block trades, through structured or derivative transactions and/or through other legally permissible means.

What actions may the board of directors of RLX Technology Inc. (NYSE: RLX) take regarding the share repurchase program?

The Company's board of directors will review the share repurchase program periodically, and may authorize adjustment of its terms and size.