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Rlx Technology, Inc. (RLX)
:RLX
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RLX Technology
(NYSE:RLX)
Rating:73Outperform
Price Target:
$2.50
▲(11.61% Upside)
Positive Factors
Market Strategy
The company is focusing on optimization of product portfolio and localized distribution approach to gain market share overseas.
Revenue Growth
Revenue grew by 56% year-on-year or 8% quarter-on-quarter to Rmb813m, with sequential improvement in non-China business.
Negative Factors
Market Conditions
The market size of the e-vapor industry is shrinking due to much lower average selling prices of 'Big Puff' products.
Pricing Pressure
The shift towards 'Big Puff' products is expected to sustain pricing pressure in the industry and decelerate the growth of the company's overseas business.
Regulatory Challenges
Regulatory uncertainty in the global e-vapor industry could impact the company, with stringent regulations and delayed product approvals in certain regions.
RLX Technology (RLX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.72B
Dividend Yield0.36%
Average Volume (3M)2.56M
Price to Earnings (P/E)30.9
Beta (1Y)0.69
Revenue Growth75.72%
EPS Growth-6.45%
CountryUS
Employees381
SectorConsumer Defensive
Sector Strength52
IndustryTobacco
Share Statistics
EPS (TTM)0.02
Shares Outstanding962,886,800
10 Day Avg. Volume1,938,262
30 Day Avg. Volume2,561,669
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap0.49
Enterprise Value/Revenue0.49
Enterprise Value/Gross Profit1.63
Enterprise Value/Ebitda39.51
Forecast
1Y Price Target
$2.25Price Target Upside0.45% Upside
Rating ConsensusHold
Number of Analyst Covering1
RLX Technology Business Overview & Revenue Model
Company DescriptionRLX Technology (RLX) is a leading Chinese e-vapor company that focuses on the design, development, and sale of e-vapor products. The company operates primarily within the consumer electronics sector, with a strong emphasis on innovation and technology. RLX's core products include a range of electronic nicotine delivery systems, marketed under the brand name RELX, which are known for their sleek design, advanced features, and user-friendly experience.
How the Company Makes MoneyRLX Technology generates revenue primarily through the sale of its e-vapor products. The company's revenue model is centered on direct sales to distributors and retailers, who then sell these products to end consumers. Key revenue streams include the sale of vaping devices, pre-filled flavor pods, and other related accessories. RLX Technology benefits from partnerships with retail chains and specialty stores, ensuring widespread distribution and availability of its products. Additionally, the company invests in research and development to continually enhance its product offerings, which helps maintain consumer interest and drive sales. Regulatory compliance and market expansion also play significant roles in the company's ability to generate revenue.
RLX Technology Earnings Call Summary
Earnings Call Date:May 16, 2025
(Q1-2025)
| % Change Since: 14.87%|
Next Earnings Date:Aug 22, 2025
Earnings Call Sentiment Neutral
RLX Technology demonstrated strong revenue growth and improved profitability despite facing significant regulatory challenges that impacted the industry. Their innovative product offerings and strategic market expansion have contributed positively, although industry-wide revenue growth is expected to be negative this year due to regulatory pressures and changing user trends.Q1-2025 Updates
Positive Updates
Significant Revenue Growth
RLX Technology reported a 47% year-over-year increase in net revenues to RMB808 million in Q1 2025, driven by international market expansion.
Improved Profitability
The company's gross profit margin improved to 28.6%, a 2.7 percentage point increase year-over-year, and achieved a non-GAAP operating profit of RMB106 million.
Strong Cash Flow
RLX Technology achieved an operating cash inflow of RMB207 million in Q1 2025, up from RMB4 million in the same quarter of the previous year, reflecting improved working capital efficiency.
Successful Product Innovation
The launch of Big Puff products, which offer larger e-liquid capacity, has gained global popularity and attracted numerous former disposable users.
Negative Updates
Regulatory Challenges
The e-vapor industry faces growing global scrutiny with bans on disposable e-vapor products in major markets like the U.K., New Zealand, and additional taxes in Spain, impacting exports from China.
Industry Revenue Decline
Despite increased e-liquid consumption, the lower per milliliter average selling price of Big Puff products has stunted revenue growth across the industry.
Seasonal Revenue Stagnation
Quarter-over-quarter revenue growth remained subdued due to seasonal factors, with net revenues largely consistent with the previous quarter.
Company Guidance
During RLX Technology Inc's First Quarter 2025 Earnings Conference Call, the company reported a 47% year-over-year increase in net revenues, reaching RMB808 million, with a non-GAAP operating profit of RMB106 million. The gross profit margin improved to 28.6%, representing a 2.7 percentage point increase year-over-year. The company achieved an operating cash inflow of RMB207 million, significantly up from RMB4 million the previous year, and maintained a solid cash position of RMB16.2 billion as of March 31, 2025. Despite challenges from new regulatory changes in the e-vapor industry, including bans on disposable products in the U.K. and New Zealand, RLX is leveraging its in-house product development capabilities to stay ahead of trends and anticipate a return to normal industry growth in 2026. The company's strategic emphasis on international markets contributed to a 46.5% year-over-year revenue increase, and they remain focused on expanding globally while managing regulatory risks and adapting to market dynamics.RLX Technology Financial Statement Overview
Summary
RLX Technology shows a mixed financial performance with a strong balance sheet indicating financial stability and low leverage. However, the income statement reveals volatility with fluctuations in revenue and profit margins. Cash flow is positive but inconsistent, highlighting potential volatility.Income Statement
RLX Technology shows a volatile income statement with significant fluctuations in revenue and profit margins. The Gross Profit Margin has been relatively stable, but a negative EBIT Margin in recent years indicates operational inefficiencies. Revenue growth showed a positive trend from 2023 to 2024, but the significant drop from 2022 to 2023 suggests instability. Positive Net Profit Margin in the latest year reflects improved net income, but overall profitability remains inconsistent.60
Neutral
Balance Sheet
The balance sheet of RLX Technology is strong, with a healthy Equity Ratio indicating financial stability and low leverage. The Debt-to-Equity Ratio is low, reflecting minimal reliance on debt financing. However, the Return on Equity has been fluctuating, suggesting potential issues with generating returns on equity capital. Overall, the balance sheet indicates a solid financial position with adequate equity to cover liabilities.75
Positive
Cash Flow
RLX Technology's cash flow statement shows a mixed performance. Free Cash Flow remains positive, indicating the company can fund its operations and investments without external financing. However, the Free Cash Flow Growth Rate has been inconsistent, reflecting potential volatility in cash-generating ability. The Operating Cash Flow to Net Income Ratio is robust, suggesting strong cash conversion, but fluctuations in free cash flow growth pose some concerns.70
Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.44B | 1.24B | 5.33B | 8.52B | 3.82B |
| Gross Profit | 726.52M | 387.71M | 2.31B | 3.67B | 1.53B |
| EBITDA | -60.63M | -400.11M | 1.06B | 2.30B | 13.15M |
| Net Income | 551.84M | 534.33M | 1.44B | 2.02B | -128.10M |
Balance Sheet | |||||
| Total Assets | 16.87B | 16.32B | 16.38B | 16.37B | 4.06B |
| Cash, Cash Equivalents and Short-Term Investments | 8.49B | 8.11B | 10.79B | 12.85B | 3.08B |
| Total Debt | 58.50M | 53.85M | 85.92M | 184.81M | 94.52M |
| Total Liabilities | 881.10M | 716.68M | 838.45M | 2.85B | 2.55B |
| Stockholders Equity | 15.99B | 15.61B | 15.57B | 13.51B | 1.51B |
Cash Flow | |||||
| Free Cash Flow | 842.09M | 166.29M | 448.19M | 1.66B | 2.57B |
| Operating Cash Flow | 854.35M | 198.70M | 486.83M | 1.80B | 2.59B |
| Investing Cash Flow | 3.02B | 2.09B | -4.13B | -7.87B | -1.81B |
| Financing Cash Flow | -678.03M | -1.19B | -477.27M | 9.90B | 174.88M |
RLX Technology Technical Analysis
Neutral
2.24
Price Trends
2.21
Positive
2.05
Positive
2.03
Positive
Market Momentum
<0.01
Positive
47.75
Neutral
26.67
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RLX, the sentiment is Neutral. The current price of 2.24 is below the 20-day moving average (MA) of 2.27, above the 50-day MA of 2.21, and above the 200-day MA of 2.03, indicating a neutral trend. The MACD of <0.01 indicates Positive momentum. The RSI at 47.75 is Neutral, neither overbought nor oversold. The STOCH value of 26.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for RLX.
RLX Technology Risk Analysis
RLX Technology disclosed 91 risk factors in its most recent earnings report. RLX Technology reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 3 New Risks
1.
We may engage in acquisitions, investments or strategic alliances, which could require significant management attention and materially and adversely affect our business and results of operations. Q4, 2023
2.
Failure to respond to changes in the regulatory environment in China could materially and adversely affect us. Q4, 2023
3.
Our business is subject to a large number of laws across many jurisdictions, many of which are evolving. Q4, 2023
RLX Technology Peers Comparison
Overall Rating
UnderperformOutperform
Sector (53)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $1.45B | 35.83 | 27.53% | 0.36% | 3.17% | -2.23% | |
73 Outperform | $2.72B | 30.90 | 4.07% | 0.36% | 75.72% | -6.45% | |
71 Outperform | $105.03B | 11.97 | -503.31% | 6.60% | -0.18% | -10.69% | |
68 Neutral | $0.00 | 30.93 | -37142.11% | 3.29% | 7.44% | -6.72% | |
63 Neutral | $1.34B | 14.12 | 6.56% | 6.02% | 7.23% | -20.91% | |
62 Neutral | $122.52B | 30.91 | 5.97% | 5.34% | 0.48% | ― | |
53 Neutral | C$5.27B | 4.60 | -2.52% | 3.54% | 18.40% | 3.10% |
* Consumer Defensive Sector Average
Performance Comparison
RLX
RLX Technology
2.23
0.66
42.04%
MO
Altria Group
62.52
15.66
33.42%
BTI
British American Tobacco
55.84
22.53
67.64%
PM
Philip Morris
164.14
52.24
46.68%
UVV
Universal
53.99
4.90
9.98%
TPB
Turning Point Brands
81.14
44.60
122.06%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.