Why the price has dropped today
- RLX Technology Inc’s (NYSE: RLX) stock price fell more than 8% ahead of the market today. That’s why it happened.
The share price of RLX Technology Inc (NYSE: RLX) – one of the leading branded e-vapor companies in China – fell more than 8% before market today. Investors are reacting negatively to the company’s third quarter results.
Here are the financial highlights for the third quarter of 2021:
– Net income amounted to RMB 1,676.7 million (US $ 260.2 million), a decrease of 34.0% from RMB 2,541.4 million in the second quarter of 2021.
– The gross margin was 39.1%, compared to 45.1% in the second quarter of 2021.
– US GAAP net profit was RMB 976.4 million (US $ 151.5 million), compared to RMB 824.3 million in the second quarter of 2021.
– Non-GAAP net profit amounted to RMB 452.7 million (US $ 70.3 million), compared to RMB 651.8 million in the second quarter of 2021.
âIn the third quarter, we continued to grow our business through concerted efforts by deepening our scientific research capabilities, enriching our differentiated product portfolio and enhancing our sustainability initiatives. We have also strengthened our core capabilities by expanding our talent pool, optimizing our retail network and carrying out digitization upgrades to our operating infrastructure. Looking ahead, with the formal confirmation of the change in the implementation rules of the Tobacco Monopoly Act announced last week incorporating innovative tobacco products, including electronic cigarettes, into the regulatory framework, as well as The draft administrative measures for electronic cigarettes and the draft national electronic cigarette product standards announced earlier this week, we believe that the industry will enter a new era of development, one marked by improved product safety and quality. , increased social responsibilities and better protection of intellectual property. These developments will pave the way for long-term sustainable growth in this sector.
– Ying (Kate) Wang, Co-Founder, Chairman of the Board and CEO of RLX Technology
âDuring the last quarter, we focused even more on investments in R&D, organizational upgrades and improving operational efficiency in existing channels, compared to efforts to expand the distribution network of previous quarters. As a result, we have a richer product portfolio in the pipeline and healthier inventory levels throughout our value chain. “
“We believe the decline in our quarterly revenues was temporary, and the investments we made in products, talent, research and compliance in the third quarter and beyond will put us in an advantageous position under the new regulatory paradigm. We anticipate that these investments will soon produce steady and sustainable growth. “
– Chao Lu, CFO of RLX Technology
Disclaimer: This content is intended for informational purposes. Before you make an investment, you need to do your own analysis.