RLX Technology, Chinese Vaping Giant, Seeks New York IPO

The electronic cigarette maker prepares to start off 2021 with a public offering rumored to be worth $1 billion.
Anna VodJan 03,2021,15:19

E-vapor company RLX Technology Inc., one of China’s largest, has filed for an initial public offering on the New York Stock Exchange.

Based in Beijing, operator of the RELX brand claims to hold 62.6% of the market share in China in the sales of e-vapor products for the nine months through September 2020. Citing research by China Insights Consultancy, RLX said it held 48% of the market in 2019.

For the nine months through September, RLX reported its revenue nearly doubled year-over-year to $324.2 million. Net income in the same period increased 11% to $16 million. For the full year 2019 it scored revenue of $228.2 million on income of $7 million.

Again citing CIC, the e-vapor market in China is expected to grow at a CAGR of 65.9% from 2019 to reach $11.3 billion in 2023. The dominance of the closed-system products in the market is projected to grow from 74.1% to 97.1%. “With approximately 286.7 million adult combustible tobacco product users in China in 2019, China is the largest potential market for e-vapor products.”

Following a series of vaping lung injuries in the United States in 2019, RLX positions itself as a company with high quality control standards and ethical principles. Its prospectus, filed Thursday with the SEC, states, “We have designed and implemented rigorous and standardized systems of quality assurance and control […]. We strictly uphold our extensive internal standards for various aspects of our products, and conduct thorough quality assurance and control practices throughout the entire production cycle. We have also adopted an integrated approach to managing our third-party manufacturers and suppliers and monitoring the quality of a variety of production resources.”

The company also operates RELX Physiochemistry Lab for the assessment and research of e-liquid and aerosol and RELX Bioscience Lab to minimize health risks associated with e-vapor products, it said in the filing.

The proceeds from the U.S. public listing would fund the company’s R&D and scientific research, enhance its distribution network and supply chain. As of September 2020, RLX partnered with 110 distributors to supply to over 5,000 RELX branded stores and over 100,000 retail outlets in 250 cities in China, the prospectus said.

RLX filed for an IPO in the U.S. confidentially in late October, according to Renaissance Capital. The prospectus stated $100 million as a placeholder for the size of the offering; however, the deal has been rumored to be worth as much as $1 billion.

Citigroup and China Renaissance are securing the IPO.

The company seeks to become publicly traded under the symbol "RLX."

Topics:relx, juuls, graff, vaping, pmta