Release Date: March 14, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points RLX Technology Inc (RLX, Financial) achieved its seventh consecutive quarter of sequential revenue growth, demonstrating resilience and effective global expansion strategies.The company reported a 73.3% year-over-year revenue growth for 2024, driven by successful international market expansion.RLX Technology Inc (RLX) improved its full-year gross profit margin to 26.4% in 2024, marking a 2-percentage-point increase.The company received an AA rating from MSCI, the highest ESG rating in the global tobacco industry, highlighting its commitment to social responsibility.RLX Technology Inc (RLX) returned approximately USD122.9 million to shareholders in 2024 through share repurchase programs and cash dividends, reflecting strong shareholder value commitment. Negative Points RLX Technology Inc (RLX) recorded an operating loss of RMB 107.1 million for 2024, indicating challenges in achieving profitability.The company faces regulatory shifts across multiple international markets, which present challenges and uncertainties.There is a slight slowdown in product innovation as the industry enters a more mature stage, potentially impacting future growth.The macroeconomic environment, political stability, and regulatory landscapes remain unpredictable, affecting expansion plans.Inventory turnover days increased to 25 days in Q4 2024, up from 16 days in Q3 2024, indicating potential inefficiencies in inventory management. Q & A Highlights
Q: What are the new initiatives RLX Technology plans to implement in 2025 to drive market share gains in the overseas market?
A: Sam Tsang, Head of Investor Relations, explained that RLX will align its product portfolio and business strategies with the unique characteristics of each market. This includes developing tailored flavor portfolios and product formats based on local preferences. The company will also adopt dynamic route-to-market strategies, focusing on high-potential sales channels and collaborating with distribution partners who have deep local knowledge. Data-driven insights will guide decision-making to ensure products align with local preferences and purchasing habits.
Q: Can you provide an update on shareholder returns for 2025 and beyond?
A: Sam Tsang stated that RLX has returned a significant portion of its non-GAAP net profit to shareholders through share repurchases and cash dividends. As of December 2024, USD332 million has been returned to shareholders. The company intends to continue these initiatives in 2025, reflecting its commitment to shareholder value.
Q: What are RLX Technology’s detailed expansion plans for 2025, and what is the earnings growth rate target?
A: Sam Tsang mentioned that RLX plans to expand to more countries in 2025, particularly in the Asia Pacific and Europe regions. The company will make informed decisions by midyear based on macroeconomic, political, and regulatory developments. RLX anticipates meaningful market share growth in sales volume and moderate revenue growth, with metrics expected to grow in parallel over the medium term.
Q: How does RLX Technology plan to address regulatory challenges in overseas markets?
A: Sam Tsang highlighted that RLX proactively evaluates its product portfolio and adjusts strategies to ensure compliance with evolving regulations. The company closely monitors inventory and collaborates with business partners to swiftly adapt to regulatory changes. This agility, combined with the ability to anticipate regulatory shifts, strengthens RLX’s competitive advantages and positions it for long-term sustainable growth.
Q: What is RLX Technology’s stance on entering the Heat No Burn (HNB) market, and how competitive are its open system e-cigarette products?
A: Sam Tsang stated that RLX’s open system products, such as Relx Prime and Relx Spin Mini, are designed to address affordability and convenience, positioning the company as a strong competitor in the open system market. Regarding HNB products, RLX observes that the e-vapor industry is growing faster globally and currently has no plans to enter the HNB market, prioritizing e-vapor products where it holds a stronger competitive advantage.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.