Chinese vaping giant RLX Technology Inc. has priced its shares above the expected range on Thursday, at $12 apiece, ready to lift off in its initial public offering on the New York Stock Exchange Friday.
The company thus raises $1.4 billion by selling 116.5 million shares. Underwriters on the deal may acquire an additional 17 million shares upon the IPO. Earlier, RLX set the expected price range at $8 to $10 per share.
Lead banks on the deal are Citigroup Global Markets Inc. and China Renaissance Securities (Hong Kong) Ltd.
Based in Beijing, the operator of the RELX brand claims to hold 62.6% of the market share in China in the sales of e-vapor products. 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.
The proceeds from the IPO will fund the company's R&D and scientific research, enhance its distribution network and supply chain. RLX first filed for an IPO in the U.S. confidentially in late October, according to Renaissance Capital.
RLX's IPO shows continued investor interest for Chinese stocks in the United States despite the political skirmishes between Washington and Beijing. While President Joe Biden has yet to demonstrate his position on China, some expect him to continue Trump's legacy as his immediate executive actions made no mention of China.
Last month, ex-President Trump signed the bill that could lead to the delisting of Chinese companies from U.S. stock exchanges in three years if they refuse to submit to U.S. PCAOB auditing standards.
Meanwhile, a number of companies have been blacklisted on alleged ties to the Chinese military and three – China Telecom (HKEX: 0728), China Mobile Ltd (HKEX: 0941) and China Unicom (HKEX: 0762) – have been suspended from the NYSE before a potential delisting. The telecom giants have appealed to the stock exchange immediately after Biden's inauguration and are now waiting on a review.