Core Insights - RLX Technology has achieved an "AA" rating in the MSCI ESG rating, upgraded from an "A" rating, solidifying its leadership position in the global e-vapor industry and the highest rating in the global tobacco sector [6][7] - The company emphasizes the integration of ESG principles into its corporate strategy, focusing on sustainable development and corporate social responsibility [8][10] ESG Performance - RLX Technology ranks best-in-class for risk management capabilities in product safety, quality, and chemical safety, and is among the top 1% globally for accounting, business ethics, and tax transparency [2] - The company has established an ESG committee at the Board level and has published ESG reports for four consecutive years, verified by TÜV Rheinland for accuracy and credibility [4] Product Quality and Safety - The RLX Technology quality and safety laboratory was recognized by CNAS in July 2023, providing comprehensive testing services for the e-vapor industry [3] - The company has implemented stringent factory quality controls and established eight laboratories to enhance product innovation capabilities [8] Supply Chain Management - RLX Technology maintains strict internal standards, incorporating ESG criteria into its supplier selection process and conducting annual ESG assessments of core suppliers [9] Future Commitment - The company is committed to implementing its long-term ESG strategy and creating greater value for clients, shareholders, partners, employees, and society [10]

Financial Performance - Net revenues for Q3 2024 were RMB756.3 million (US$107.8 million), a 51.6% increase from RMB498.9 million in Q3 2023[5] - U.S. GAAP net income was RMB169.4 million (US$24.1 million) in Q3 2024, compared to RMB176.6 million in Q3 2023[7] - Non-GAAP net income increased to RMB261.9 million (US$37.3 million) in Q3 2024, up from RMB201.4 million in Q3 2023[11] - Total net revenues for Q3 2023 were RMB 498,929,000, a decrease of 20.4% from RMB 627,176,000 in Q2 2023[31] - Net income attributable to RLX Technology Inc. for Q3 2023 was RMB 175,030,000, compared to RMB 132,314,000 in Q2 2023, an increase of 32.2%[31] - For the three months ended September 30, 2023, net income was RMB 176,609,000, a decrease of 1.8% compared to RMB 169,391,000 for the same period in 2022[33] - Non-GAAP net income for the three months ended September 30, 2023, was RMB 201,399,000, representing a 12.5% increase from RMB 178,800,000 in the previous year[33] - Non-GAAP net income attributable to RLX Technology Inc. for the three months ended September 30, 2023, was RMB 199,820,000, a 5.5% increase from RMB 189,000,000 in the previous year[33] Cost and Expenses - Gross margin improved to 27.2% in Q3 2024, up from 24.1% in Q3 2023, driven by a favorable revenue mix and cost optimization[6] - Operating expenses rose to RMB216.6 million (US$30.9 million) in Q3 2024, primarily due to increased share-based compensation expenses[8] - Research and development expenses decreased to RMB24.4 million (US$3.5 million) in Q3 2024, down from RMB30.8 million in Q3 2023[10] - Research and development expenses for Q3 2023 were RMB 30,783,000, compared to RMB 24,435,000 in Q2 2023, indicating increased investment in innovation[31] - The company incurred general and administrative expenses of RMB 29,771,000 for the three months ended September 30, 2023, a decrease of 68.5% from RMB 93,026,000 in the previous quarter[33] - Research and development expenses for the three months ended September 30, 2023, were RMB (936,000), indicating a significant recovery from RMB (24,074,000) in the previous quarter[33] Cash and Assets - Cash and cash equivalents totaled RMB15,361.7 million (US$2,189.0 million) as of September 30, 2024, an increase from RMB14,930.8 million as of June 30, 2024[14] - Cash and cash equivalents as of December 31, 2023, were RMB 2,390,298,000, down from RMB 3,255,500,000 as of September 30, 2023[30] - Total current assets as of December 31, 2023, were RMB 8,983,843,000, slightly up from RMB 8,873,209,000 as of September 30, 2023[30] - Total assets as of December 31, 2023, were RMB 16,315,097,000, a slight decrease from RMB 16,402,527,000 as of September 30, 2023[30] Dividends and Shareholder Returns - The company announced a cash dividend of US$0.01 per ordinary share, payable on or around December 13, 2024[16] Strategic Focus - The company maintained stable non-GAAP operating expenses while achieving significant revenue growth, indicating strong operational leverage[4] - The management emphasized commitment to innovative product development and market expansion to drive long-term growth[4] Acquisitions - The company acquired various companies on December 13, 2023, which was accounted for as an under common control transaction[32] - The company acquired various companies on December 13, 2023, which was accounted for as an under common control transaction[33]

Earnings Presentation Third Quarter 2024 Disclaimer The following presentation has been prepared by RLX Technology Inc. ("RLX Technology" or the "Company") solely for informational purposes and should not be construed to be, directly or indirectly, in whole or in part, an offer to buy or sell and/or an invitation and/or a recommendation and/or a solicitation of an offer to buy or sell any security or instrument or to participate in any investment or trading strategy, nor shall any part of it form the basis ...

Financial Data and Key Metrics Changes - The company's net revenues for Q3 2024 reached RMB756 million, representing a 52% year-over-year increase from RMB499 million and a 21% quarter-over-quarter increase from RMB627 million [22] - The overall gross profit margin improved to 27.2%, marking a 3.2 percentage point increase year-over-year [24] - Non-GAAP net income for Q3 2024 increased by 30% year-over-year to RMB262 million, with non-GAAP basic net income per ADS at RMB0.211 and diluted net income per ADS at RMB0.200 [26] - Operating cash inflow was RMB157 million, up from RMB83 million in the same quarter of the previous year [26] - Total financial assets stood at RMB15.4 billion as of September 30, 2024 [27] Business Line Data and Key Metrics Changes - Both China and non-China businesses experienced sequential growth, with non-China business revenue accounting for more than half of net revenues in Q3 2024 [23][32] - The company launched a new compliant disposable product line, which received positive feedback from retailers and users [18][19] Market Data and Key Metrics Changes - In China, illegal e-vapor products dominate the market, accounting for 88% to 90% of the total e-vapor market [15] - The company noted that the number of retail stores in the e-vapor industry has declined significantly, from about 50,000 to approximately 10,000 [46] Company Strategy and Development Direction - The company aims to expand into multiple international markets following the termination of its non-competition agreement, with plans to enter new countries in EMEA and Central America in 2025 [33] - An integrated business model has been developed to address diverse market needs, focusing on product development, supply chain management, and user engagement strategies [13][14] - The company is committed to regulatory compliance and in-house product innovation to navigate complex environments and meet rising user expectations [21] Management Comments on Operating Environment and Future Outlook - Management highlighted the importance of adapting to regulatory changes and consumer demands in the evolving e-vapor industry [10][12] - The international e-vapor industry is expected to grow at an annual rate in the double digits over the next few years, with the company confident in capturing incremental market share [14] Other Important Information - The company has successfully passed the certification exam for the Enterprise Intellectual Property Compliance Management System, establishing a robust framework for technology and brand protection [19] - A second cash dividend since the IPO was announced, reaffirming the company's commitment to delivering value to shareholders [28] Q&A Session Summary Question: Plans for overseas expansion in 2025 - The company is considering entering a couple of countries in EMEA and Central America, depending on regulatory stability and internal readiness [33] Question: Strategies for organic growth in existing markets - The company focuses on optimal product development and route-to-market strategies to gain market share, analyzing local market environments and user behavior [34][35] Question: Changes in domestic regulation and illegal market perception - Management supports regulatory actions against illegal products and collaborates with regulators to combat illicit sales [42] Question: Changes in consumer behavior in China - Despite a decline in the number of retail stores, the company's sales and market share have remained stable, indicating resilience in the e-vapor category [46] Question: Future of interest income with potential Fed rate cuts - The company does not expect significant impact on 2024 interest and investment income due to recent Fed rate cuts, but anticipates a slight decline in 2025 [49] Question: Performance of new products and future plans - New product series launched in China have received positive feedback, and the company plans to continue innovating to meet evolving user needs [53]

Core Viewpoint - RLX Technology Inc. reported strong financial results for Q3 2024, highlighting significant revenue growth driven by international expansion and effective cost optimization strategies [1][2]. Financial Performance - Net revenues reached RMB 756.3 million (US$ 107.8 million) in Q3 2024, a 51.6% increase from RMB 498.9 million in Q3 2023 [1][2]. - Gross profit was RMB 206.0 million (US$ 29.4 million) with a gross margin of 27.2%, up from 24.1% in the same period last year [2]. - U.S. GAAP net income was RMB 169.4 million (US$ 24.1 million), slightly down from RMB 176.6 million in Q3 2023 [2]. - Non-GAAP net income increased to RMB 261.9 million (US$ 37.3 million) from RMB 201.4 million in Q3 2023 [1][2]. Operational Highlights - The increase in gross margin was attributed to a favorable revenue mix and cost optimization efforts [2]. - Operating expenses rose to RMB 216.6 million (US$ 30.9 million), primarily due to fluctuations in share-based compensation expenses [2]. - The company maintained stable non-GAAP operating expenses while achieving rapid revenue growth, indicating operational leverage [1]. Shareholder Returns - The Board of Directors approved a cash dividend of US$ 0.01 per ordinary share, payable around December 13, 2024 [3]. Cash Flow and Balance Sheet - As of September 30, 2024, the company had total assets of RMB 16,402.5 million (US$ 2,337.3 million), an increase from RMB 16,315.1 million [8]. - Net cash generated from operating activities was RMB 156.6 million (US$ 22.3 million) in Q3 2024 [2].

Core Viewpoint - RLX Technology Inc. is set to report its unaudited financial results for the third quarter ended September 30, 2024, before the U.S. markets open on November 15, 2024 [1]. Group 1 - The earnings conference call is scheduled for 7:00 AM U.S. Eastern Time on November 15, 2024, which corresponds to 8:00 PM Beijing/Hong Kong Time on the same day [2]. - Dial-in details for the earnings conference call include a toll-free number for the United States at +1-888-317-6003 and an international number at +1-412-317-6061, among others [2]. - Participants are advised to dial in 10 minutes before the scheduled start time and use the Participant Code 6222824 to connect to the call [2]. Group 2 - A live and archived webcast of the conference call will be available on the Company's investor relations website [3]. - A replay of the conference call will be accessible approximately two hours after the conclusion of the call until November 22, 2024, with specific numbers provided for replay access [3]. - RLX Technology Inc. is recognized as a leading global branded e-vapor company, utilizing strong in-house technology and product development capabilities to meet adult smokers' needs [3].

Core Viewpoint - RLX Technology's Q2 2024 financial results fell short of expectations, but there are positive developments in China's regulatory environment and the company's R&D capabilities [1][4]. Financial Performance - RLX's Q2 2024 revenue grew by +65.9% YoY to RMB627.2 million, attributed to international expansion, despite a -1.8% miss against consensus forecasts [2][3]. - The company's normalized EPS increased by +164.5% YoY to RMB0.164, indicating improved supply chain efficiency and strategic workforce management [2]. - RLX's gross margin declined from 26.1% in Q2 2023 and 25.9% in Q1 2024 to 25.2% in Q2 2024, primarily due to changes in revenue composition and the introduction of lower-priced products [3]. Regulatory Environment - The regulatory landscape for e-cigarette product approvals in Mainland China has improved, with nine new flavors approved in the first half of 2024, enhancing RLX's competitive position against illegal products [4]. R&D Capabilities - RLX has filed over a thousand patents globally, with a new product development cycle of less than three months, showcasing its strong R&D capabilities [4]. - The company’s medium-to-long term prospects are favorable due to its R&D strengths and the improved regulatory environment, despite a significant revenue drop in FY 2023 [4]. Valuation and Future Outlook - RLX's P/E ratio and projected earnings growth rate are aligned, with a consensus FY 2023-2026 normalized EPS CAGR forecast of +15.4% and a normalized P/E metric of 15.5 times [5].

Earnings Presentation Second Quarter 2024 Disclaimer The following presentation has been prepared by RLX Technology Inc. ("RLX Technology" or the "Company") solely for informational purposes and should not be construed to be, directly or indirectly, in whole or in part, an offer to buy or sell and/or an invitation and/or a recommendation and/or a solicitation of an offer to buy or sell any security or instrument or to participate in any investment or trading strategy, nor shall any part of it form the basis ...

Financial Data and Key Metrics Changes - The company's net revenues for Q2 2024 reached RMB627 million, representing a 66% year-over-year increase from RMB378 million in Q2 2023 and a 14% quarter-over-quarter increase from RMB552 million in Q1 2024 [13] - The overall gross profit margin for Q2 2024 was 25.2%, slightly down year-over-year due to changes in revenue composition [14] - Non-GAAP net profit for Q2 2024 increased by 147% year-over-year to RMB213 million, with non-GAAP basic net income per ADS at RMB0.171 and diluted net profit per ADS at RMB0.164 [15] - Operating cash inflow was RMB197 million in Q2 2024, a significant increase from RMB41 million in the same quarter of the previous year [16] Business Line Data and Key Metrics Changes - The company launched the mega-sized Phantom series in Mainland China and the RELX series internationally, focusing on enhanced value offerings [7] - The introduction of smart features in products, such as Bluetooth for usage tracking, is becoming standard across various price points [8] Market Data and Key Metrics Changes - The company is experiencing challenges in overseas markets due to regulatory uncertainties, particularly regarding the ban on disposable products in certain countries [20] - The market share of illegal products in China remains significant, although compliance products are gradually stabilizing [27] Company Strategy and Development Direction - The company is focusing on product innovation and R&D to adapt to diverse regulatory environments and consumer preferences in international markets [5] - A commitment to compliance and sustainability is emphasized, with ongoing investments in R&D to maintain a competitive edge [12] Management Comments on Operating Environment and Future Outlook - Management highlighted the importance of adapting product offerings to local market demands and regulatory requirements as a key strategy for international expansion [21] - The company is optimistic about continued revenue growth as international expansion progresses, despite challenges [13] Other Important Information - The company has published its third ESG report, showcasing significant contributions to anti-counterfeit efforts and public health initiatives [10][11] - The company has achieved certification for its quality and safety laboratory, enhancing its credibility in international markets [9] Q&A Session Summary Question: Challenges in overseas expansion and targets for the second half - Management identified regulatory uncertainties and local market adaptation as primary challenges, with a focus on expanding in Asia and gradually entering other continents [21] Question: Competitive advantages in overseas markets - The company emphasized its established brand equity and in-house R&D capabilities as key competitive advantages over brands focused on disposable products [25] Question: Status of new GB products in China and market share of illegal products - Management reported ongoing product approvals, with over 30 flavors approved as of June 2024, while illegal products still dominate the market [26][27] Question: Growth momentum in overseas markets and contribution of disposable products - The company noted strong traction for high e-liquid volume products in markets where disposables are permitted, while pod and open systems are gaining market share in regions anticipating bans [30][32] Question: Overall market size and growth rate in China - Management indicated that the demand for compliance products remains stable, with non-compliance products still dominating the market, and the average selling price for compliance products has remained stable [35][37]