RLX RLX Technology Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of August 2023

 

 

Commission File Number: 001-39902

 

 

RLX Technology Inc.

 

19/F, Building 1, Junhao Central Park Plaza

No. 10 South Chaoyang Park Avenue

Chaoyang District, Beijing 100026

People’s Republic of China

(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F x          Form 40-F ¨

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨

 

 

 

EXHIBIT INDEX

 

Exhibit No.		Description
99.1		Press Release

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	RLX Technology Inc.
	By	:	/s/ Chao Lu
	Name:	:	Chao Lu
	Title:	:	Chief Financial Officer

 

Date: August 18, 2023

 

 

Exhibit 99.1

 

RLX Technology Announces Unaudited Second Quarter 2023 Financial Results

 

BEIJING, August 18, 2023 /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 second quarter ended June 30, 2023.

 

Second Quarter 2023 Financial Highlights

 

	●	Net revenues were RMB378.1 million (US$52.1 million) in the second quarter of 2023, compared with RMB2,233.9 million in the same period of 2022.
	●	Gross margin was 26.1% in the second quarter of 2023, compared with 43.8% in the same period of 2022.
	●	U.S. GAAP net income was RMB204.7 million (US$28.2 million) in the second quarter of 2023, compared with U.S. GAAP net income of RMB441.6 million in the same period of 2022.
	●	Non-GAAP net income1 was RMB86.2 million (US$11.9 million) in the second quarter of 2023, compared with RMB634.7 million in the same period of 2022.

 

"During the second quarter of 2023, we continued to firmly execute our core strategy amid the challenging market environment," said Ms. Ying (Kate) Wang, Co-founder, Chairperson of the Board of Directors, and CEO of RLX Technology. "Specifically, we remained dedicated to offering compliant, high-quality products while developing new products to meet users' evolving needs. Though the recent resurgence of illegal products has had a lingering impact on our sales, we believe the impact will be temporary rather than a major trend that could derail our recovery trajectory. As a trusted e-vapor brand for adult smokers, we remain confident that, supported by regulatory oversight, our premium products will continue to win users' trust and gradually supplant inferior and harmful illegal products. Moving forward, we will continue prioritizing product innovation, harm reduction, and quality control initiatives while further enhancing our product portfolio as we strive to create sustainable value for all stakeholders."

 

Mr. Chao Lu, Chief Financial Officer of RLX Technology, commented, "In light of the external challenges, especially the disruptions from illegal products, we deepened our focus on efficiency and profitability improvement during the second quarter. Thanks to our supply chain optimizations and product design enhancements, our topline improved sequentially to RMB378.1 million, and our gross margin rebounded by 1.9 percentage points from the first quarter of 2023. We also strengthened cost control, which helped significantly narrow our non-GAAP operating loss. Notably, our operating cash flow turned positive for the first time since the new regulations were enacted. We believe our strong cash position will continue to support us in navigating the evolving markets, and we will pursue further gains in cost optimization and efficiency improvement to accelerate the pace of recovery."

 

Second Quarter 2023 Financial Results

 

Net revenues were RMB378.1 million (US$52.1 million) in the second quarter of 2023, compared with RMB2,233.9 million in the same period of 2022. The decrease was primarily due to the discontinuation of our older products and the negative impact of illegal products in the market after regulators' special action ended in April, which disrupted users' adoption of our new products that comply with national standards.

 

Gross profit was RMB98.5 million (US$13.6 million) in the second quarter of 2023, compared with RMB977.9 million in the same period of 2022.

 

Gross margin was 26.1% in the second quarter of 2023, compared with 43.8% in the same period of 2022. The decrease was primarily due to the imposition of a 36% excise tax which came into effect on November 1, 2022.

 

¹ Non-GAAP net 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.

 

 

Operating expenses were RMB47.2 million (US$6.5 million) in the second quarter of 2023, compared with RMB530.9 million in the same period of 2022. The decrease was primarily due to the change in share-based compensation expenses, which were positive RMB118.5 million (US$16.3 million) in the second quarter of 2023, compared with RMB193.2 million in the same period of 2022. The change in share-based compensation expenses consisted of (i) positive RMB15.3 million (US$2.1 million) recognized in selling expenses, (ii) positive RMB90.9 million (US$12.5 million) recognized in general and administrative expenses, and (iii) positive RMB12.2 million (US$1.7 million) recognized in research and development expenses. The change in share-based compensation expenses was primarily due to the changes in the fair value of the share incentive awards that the Company granted to its employees affected by the fluctuations of the Company's share price.

 

Selling expenses were RMB45.2 million (US$6.2 million) in the second quarter of 2023, compared with RMB122.6 million in the same period of 2022, primarily due to the decrease in share-based compensation expenses.

 

General and administrative expenses were positive RMB41.4 million (US$5.7 million) in the second quarter of 2023, compared with RMB290.7 million in the same period of 2022, mainly driven by the fluctuation of share-based compensation expenses.

 

Research and development expenses were RMB43.3 million (US$6.0 million) in the second quarter of 2023, compared with RMB117.6 million in the same period of 2022, mainly driven by the decrease in share-based compensation expenses.

 

Income from operations was RMB51.4 million (US$7.1 million) in the second quarter of 2023, compared with RMB446.9 million in the same period of 2022.

 

Income tax expense was RMB51.5 million (US$7.1 million) in the second quarter of 2023, compared with RMB204.3 million in the same period of 2022.

 

U.S. GAAP net income was RMB204.7 million (US$28.2 million) in the second quarter of 2023, compared with RMB441.6 million in the same period of 2022.

 

Non-GAAP net income was RMB86.2 million (US$11.9 million) in the second quarter of 2023, compared with RMB634.7 million in the same period of 2022.

 

U.S. GAAP basic and diluted net income per American depositary share ("ADS") were RMB0.154 (US$0.021) and RMB0.150 (US$0.021) in the second quarter of 2023, compared with U.S. GAAP basic and diluted net income per ADS of RMB0.348 and RMB0.347, respectively, in the same period of 2022.

 

Non-GAAP basic and diluted net income per ADS² were RMB0.064 (US$0.009) and RMB0.062 (US$0.009), respectively, in the second quarter of 2023, compared with non-GAAP basic and diluted net income per ADS of RMB0.494 and RMB0.492, respectively, in the same period of 2022.

 

Balance Sheet and Cash Flow

 

As of June 30, 2023, the Company had cash and cash equivalents, restricted cash, short-term bank deposits, net, short-term investments, long-term bank deposits, net and long-term investment securities, net of RMB15,786.6 million (US$2,177.1 million), compared with RMB15,369.2 million as of March 31, 2023. For the second quarter ended June 30, 2023, net cash generated from operating activities was RMB41.3 million (US$5.7 million).

 

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.

 

 

Conference Call

 

The Company's management will host an earnings conference call at 8:00 AM U.S. Eastern Time on August 18, 2023 (8:00 PM Beijing/Hong Kong Time on August 18, 2023).

 

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:	3325354

 

Participants should dial in 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 August 25, 2023, by dialing the following telephone numbers:

 

United States:	+1-877-344-7529
International:	+1-412-317-0088
Replay Access Code:	5550144

 

 

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, 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.

 

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 attributable to RLX Technology Inc. and the same number of ADSs used in U.S. GAAP basic and diluted net income 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. 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, basic and diluted net income 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 U.S. 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 RMB7.2513 to US$1.00, the exchange rate on June 30, 2023, set forth in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or U.S. dollar amounts referred could be converted into U.S. dollars or RMB, as the case may be, at any particular rate or at all.

 

 

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

 

 

 RLX TECHNOLOGY INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(All amounts in thousands)

 

		As of
		December 31,				June 30,				June 30,
		2022				2023				2023
		RMB				RMB				US$
ASSETS
Current assets:
Cash and cash equivalents			1,268,512				1,761,694				242,949
Restricted cash			20,574				15,750				2,172
Short-term bank deposits, net			7,084,879				5,221,295				720,049
Receivables from online payment platforms			3,000				4,948				682
Short-term investments			2,434,864				2,210,005				304,774
Accounts and notes receivable, net			51,381				87,412				12,055
Inventories			130,901				90,178				12,436
Amounts due from related parties			5,112				38,352				5,289
Prepayments and other current assets, net			198,932				397,337				54,795
Total current assets			11,198,155				9,826,971				1,355,201
Non-current assets:
Property, equipment and leasehold improvement, net			87,871				78,755				10,861
Intangible assets, net			7,552				6,977				962
Long-term investments, net			8,000				8,000				1,103
Deferred tax assets, net			63,894				63,894				8,812
Right-of-use assets, net			75,008				79,710				10,993
Long-term bank deposits, net			1,515,428				2,306,679				318,106
Long-term investment securities, net			3,409,458				4,271,197				589,025
Other non-current assets, net			13,458				8,029				1,107
Total non-current assets			5,180,669				6,823,241				940,969
Total assets			16,378,824				16,650,212				2,296,170
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts and notes payable			269,346				132,193				18,230
Contract liabilities			75,226				94,531				13,036
Salary and welfare benefits payable			127,749				94,050				12,970
Taxes payable			109,676				82,290				11,348
Amounts due to related parties			423				-				-
Accrued expenses and other current liabilities			161,455				120,058				16,557
Lease liabilities - current portion			45,955				49,286				6,797
Total current liabilities			789,830				572,408				78,938
Non-current liabilities:
Deferred tax liabilities			8,653				8,653				1,193
Lease liabilities - non-current portion			39,968				38,878				5,361
Total non-current liabilities			48,621				47,531				6,554
Total liabilities			838,451				619,939				85,492
Shareholders' Equity:
Total RLX Technology Inc. shareholders' equity			15,569,060				16,056,370				2,214,279
Noncontrolling interests			(28,687	)			(26,097	)			(3,601	)
Total shareholders' equity			15,540,373				16,030,273				2,210,678
Total liabilities and shareholders' equity			16,378,824				16,650,212				2,296,170

 

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME/(LOSS)

(All amounts in thousands, except for share and per share data)

 

		For the three months ended																For the six months ended
		June 30,				March 31,				June 30,				June 30,				June 30,				June 30,				June 30,
		2022				2023				2023				2023				2022				2023				2023
		RMB				RMB				RMB				US$				RMB				RMB				US$
Net revenues			2,233,893				188,877				378,123				52,146				3,948,343				567,000				78,193
Cost of revenues			(1,256,010	)			(78,693	)			(171,733	)			(23,683	)			(2,313,457	)			(250,426	)			(34,535	)
Excise tax on products			-				(64,458	)			(107,853	)			(14,874	)			-				(172,311	)			(23,763	)
Gross profit			977,883				45,726				98,537				13,589				1,634,886				144,263				19,895
Operating expenses:
Selling expenses			(122,634	)			(85,761	)			(45,226	)			(6,237	)			(198,581	)			(130,987	)			(18,064	)
General and administrative expenses			(290,745	)			(256,504	)			41,368				5,705				(224,350	)			(215,136	)			(29,669	)
Research and development expenses			(117,567	)			(76,682	)			(43,317	)			(5,974	)			(141,574	)			(119,999	)			(16,549	)
Total operating expenses			(530,946	)			(418,947	)			(47,175	)			(6,506	)			(564,505	)			(466,122	)			(64,282	)
Income/(loss) from operations			446,937				(373,221	)			51,362				7,083				1,070,381				(321,859	)			(44,387	)
Other income：
Interest income, net			42,724				148,803				162,888				22,463				69,875				311,691				42,984
Investment income			40,631				21,385				20,588				2,839				72,870				41,973				5,788
Others, net			115,586				129,157				21,380				2,948				232,443				150,537				20,760
Income/(loss) before income tax			645,878				(73,876	)			256,218				35,333				1,445,569				182,342				25,145
Income tax (expense)/benefit			(204,316	)			17,571				(51,502	)			(7,102	)			(316,952	)			(33,931	)			(4,679	)
Net income/(loss)			441,562				(56,305	)			204,716				28,231				1,128,617				148,411				20,466
Less: net (loss)/income attributable to noncontrolling interests			(19,499	)			661				1,929				266				(37,725	)			2,590				357
Net income/(loss) attributable to RLX Technology Inc.			461,061				(56,966	)			202,787				27,965				1,166,342				145,821				20,109
Other comprehensive loss:
Foreign currency translation adjustments			580,438				(148,096	)			563,078				77,652				534,614				414,982				57,229
Unrealized income on long-term investment securities			-				2,873				5,539				764				-				8,412				1,160
Total other comprehensive income/(loss)			580,438				(145,223	)			568,617				78,416				534,614				423,394				58,389
Total comprehensive income/(loss)			1,022,000				(201,528	)			773,333				106,647				1,663,231				571,805				78,855
Less: total comprehensive (loss)/income attributable to noncontrolling interests			(19,499	)			661				1,929				266				(37,725	)			2,590				357
Total comprehensive income/(loss) attributable to RLX Technology Inc.			1,041,499				(202,189	)			771,404				106,381				1,700,956				569,215				78,498
Net income/(loss) per ordinary share/ADS
Basic			0.348				(0.043	)			0.154				0.021				0.877				0.111				0.015
Diluted			0.347				(0.043	)			0.150				0.021				0.867				0.108				0.015
Weighted average number of ordinary shares/ADSs
Basic			1,323,877,777				1,316,798,713				1,318,628,588				1,318,628,588				1,329,964,500				1,317,718,705				1,317,718,705
Diluted			1,330,060,097				1,316,798,713				1,353,296,802				1,353,296,802				1,345,014,312				1,348,021,483				1,348,021,483

 

 

RLX TECHNOLOGY INC.

UNAUDITED RECONCILIATION OF GAAP AND NON-GAAP RESULTS

(All amounts in thousands, except for share and per share data)  

 

		For the three months ended																For the six months ended
		June 30,				March 31,				June 30,				June 30,				June 30,				June 30,				June 30,
		2022				2023				2023				2023				2022				2023				2023
		RMB				RMB				RMB				US$				RMB				RMB				US$
Net income/(loss)			441,562				(56,305	)			204,716				28,231				1,128,617				148,411				20,466
Add: share-based compensation expenses
Selling expenses			17,896				23,955				(15,338	)			(2,115	)			(24,043	)			8,617				1,188
General and administrative expenses			151,069				201,343				(90,923	)			(12,539	)			(79,018	)			110,420				15,228
Research and development expenses			24,213				14,654				(12,229	)			(1,686	)			(28,998	)			2,425				334
Non-GAAP net income			634,740				183,647				86,226				11,891				996,558				269,873				37,216
Net income/(loss) attributable to RLX Technology Inc.			461,061				(56,966	)			202,787				27,965				1,166,342				145,821				20,109
Add: share-based compensation expenses			193,178				239,952				(118,490	)			(16,340	)			(132,059	)			121,462				16,750
Non-GAAP net income attributable to RLX Technology Inc.			654,239				182,986				84,297				11,625				1,034,283				267,283				36,859
Non-GAAP net income per ordinary share/ADS
- Basic			0.494				0.139				0.064				0.009				0.778				0.203				0.028
- Diluted			0.492				0.136				0.062				0.009				0.769				0.198				0.027
Weighted average number of ordinary shares/ADSs
- Basic			1,323,877,777				1,316,798,713				1,318,628,588				1,318,628,588				1,329,964,500				1,317,718,705				1,317,718,705
- Diluted			1,330,060,097				1,345,828,279				1,353,296,802				1,353,296,802				1,345,014,312				1,348,021,483				1,348,021,483

 

 

RLX TECHNOLOGY INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(All amounts in thousands)

 

		For the three months ended																For the six months ended
		June 30,				March 31,				June 30,				June 30,				June 30,				June 30,				June 30,
		2022				2023				2023				2023				2022				2023				2023
		RMB				RMB				RMB				US$				RMB				RMB				US$
Net cash generated from/(used in) operating activities			1,444,388				(230,686	)			41,339				5,701				1,752,557				(189,347	)			(26,112	)
Net cash (used in)/generated from investing activities			(4,145,885	)			381,954				431,683				59,532				(5,096,649	)			813,637				112,206
Net cash (used in)/generated from financing activities			(145,189	)			4,346				(199,080	)			(27,454	)			(306,801	)			(194,734	)			(26,855	)
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash			171,597				10,409				48,393				6,673				151,041				58,802				8,109
Net (decrease)/increase in cash and cash equivalents and restricted cash			(2,675,089	)			166,023				322,335				44,452				(3,499,852	)			488,358				67,348
Cash, cash equivalents and restricted cash at the beginning of the period			4,384,704				1,289,086				1,455,109				200,669				5,209,467				1,289,086				177,773
Cash, cash equivalents and restricted cash at the end of the period			1,709,615				1,455,109				1,777,444				245,121				1,709,615				1,777,444				245,121

 

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