RLX Technology Inc, a leading branded e-vapor company in China, today announced its unaudited financial results for the first quarter ended March 31, 2021.

First Quarter 2021 Financial Highlights

• Net revenues were RMB2,398.5 million (US$366.1 million), representing an increase of 48.2% from RMB1,618.5 million in the fourth quarter of 2020.

• Gross margin was 46.0%, compared to 42.9% in the fourth quarter of 2020.

• GAAP net loss was RMB267.0 million (US$40.8 million), compared with RMB236.7 million in the fourth quarter of 2020.

• Non-GAAP net income was RMB610.5 million (US$93.2 million), representing an increase of 45.6% from RMB419.3 million in the fourth quarter of 2020.

"2021 began, on a solid note, with strong growth in key performance metrics of our business," said Ms. Ying (Kate) Wang, Co-founder, Chairperson of the Board of Directors and Chief Executive Officer of RLX Technology. "Specifically, our expansion in distribution network fueled a strong sequential growth, further demonstrating sustained user demand for our e-vapor product portfolio."

"As the go-to brand of e-vapor products in China, we remain dedicated to investing in deepening our scientific research, improving our technology and product development, expanding our distribution network and retail outlets as well as enhancing supply chain and production capabilities. In the first quarter, we opened our Quality Lab to further strengthen our quality assurance and control capabilities, and started developing our second and third exclusive production plants to enhance our production capabilities. We believe we are well positioned to further capture the growth potential in the e-vapor industry in China," Ms. Wang concluded.

"Our robust results in the first quarter of 2021 exemplify our strong capabilities in meeting user demands for reliable, innovative and trustworthy products," said Mr. Chao Lu, Chief Financial Officer. "Building on rapid revenue growth and continued efforts in improving operating leverage, our gross margin and non-GAAP net margin have remained steady in the first quarter. We will continue to pursue user value creation by enhancing our suite of product offerings and strengthening our brand leadership in the market."

First Quarter 2021 Unaudited Financial Results

Net revenues increased by 48.2% to RMB2,398.5 million (US$366.1 million) in the first quarter of 2021 from RMB1,618.5 million in the fourth quarter of 2020. The increase was primarily due to an increase in net revenues from sales to offline distributors, which was mainly attributable to the expansion of the Company's distribution and retail network. 

Gross profit increased by 59.1% to RMB1,104.1 million (US$168.5 million) in the first quarter of 2021 from RMB694.1 million in the fourth quarter of 2020.

Gross margin increased to 46.0% in the first quarter of 2021, compared to 42.9% in the fourth quarter of 2020.

Operating expenses were RMB1,216.0 million (US$185.6 million) in the first quarter of 2021, representing an increase of 42.6% from RMB852.6 million in the fourth quarter of 2020.

Selling expenses increased by 48.2% to RMB291.5 million (US$44.5 million) in the first quarter of 2021 from RMB196.7 million in the fourth quarter of 2020. The increase was mainly driven by (i) an increase in salaries and welfare benefits, (ii) an increase in branding material expenses, and (iii) an increase in shipping expenses.

General and administrative expenses increased by 59.5% to RMB712.8 million (US$108.8 million) in the first quarter of 2021 from RMB447.0 million in the fourth quarter of 2020. The increase was primarily due to (i) an increase in salaries and welfare benefits, and (ii) an increase in share-based compensation expenses, partially offset by a decrease in legal and other consulting fees.

Research and development expenses increased by 1.3% to RMB211.6 million (US$32.3 million) in the first quarter of 2021 from RMB208.9 million in the fourth quarter of 2020. The increase was primarily driven by an increase in salaries and welfare benefits, partially offset by (i) a decrease in share-based compensation expenses, and (ii) a decrease in material expenses.

Share-based compensation expenses recognized in selling expenses, general and administrative expenses and research and development expenses in total were RMB877.5 million (US$133.9 million) in the first quarter of 2021 and RMB656.1 million in the fourth quarter of 2020.

Loss from operations was RMB111.9 million (US$17.1 million) in the first quarter of 2021, compared with RMB158.5 million in the fourth quarter of 2020.

Income tax expense was RMB176.3 million (US$26.9 million) in the first quarter of 2021, compared with RMB110.6 million in the fourth quarter of 2020, primarily due to an increase in taxable income.

GAAP net loss was RMB267.0 million (US$40.8 million) in the first quarter of 2021, compared with RMB236.7 million in the fourth quarter of 2020.

Non-GAAP net income was RMB610.5 million (US$93.2 million) in the first quarter of 2021, representing an increase of 45.6% from RMB419.3 million in the fourth quarter of 2020.

GAAP basic and diluted net loss per American depositary share ("ADS") were both RMB0.174 (US$0.027) in the first quarter of 2021, compared to RMB0.165 in the fourth quarter of 2020.

Non-GAAP basic and diluted net income per ADS[2] were both RMB0.398 (US$0.061) in the first quarter of 2021, compared to RMB0.292 in the fourth quarter of 2020.

Balance Sheet

As of March 31, 2021, the Company had cash and cash equivalents, restricted cash, short-term bank deposits, short-term investments and long-term bank deposits of RMB14,437.8 million (US$2,203.6 million), compared to RMB3,421.4 million as of December 31, 2020. The increase was primarily due to net proceeds raised in the Company's initial public offering in January 2021. As of March 31, 2021, approximately US$1,647.2 million (RMB10,792.2 million) was denominated in U.S. dollars.