RLXTech Earnings 2022 Q2

(RLX) announced its second quarter 2022 financial results on September 21, 2022 at 6:00 ET (18:00 BST).

RLX Earnings

Exclusive highlights compiled by 2firsts:

1. The second quarter net income for 2022 was RMB 2,233.9 million (US$333.5 million), compared to RMB 2,541.4 million for the same period in 2021. This reflects a 12.1% reduction from the previous year.

Decrease as a result of regulatory compliance and the halt of store growth and new product releases during the changeover period.

2. The GAAP-recognized net income for the second quarter of 2022 was RMB441.6 million, a 46.4% reduction from the same time in 2021. 
The non-GAAP net income for the second quarter of 2022 was RMB634.7 million, a reduction of 2.6% from the same time in 2021.

3. Gross margin decreased from 45.1% in the second quarter of 2021 to 43.8% in the second quarter of 2022.

Due to product line revisions, higher inventory, and impairment losses on property, plant, and equipment to meet regulatory requirements, the reduction occurred.

4. The operating expenses for the second quarter of 2022 were RMB530.9 million (US$79.3 million), a 217.6% increase over the same time in 2021 when they were RMB167.2 million. In the second quarter of 2022, equity incentive expenses increased from RMB172.5 million to RMB193.2 million (US$28.8 million).

5. General and administrative expenses for the second quarter of 2022 were RMB290.7 million (US$43.4 million), a 531.3% increase over the same period in 2021 when they were RMB46.1 million. The majority of the increase was attributable to share-based compensation expenses and salaries and benefits.

6.Research & development costs for the second quarter of 2022 were RMB117,6 million ($17,6 million), compared to RMB4,9 million for the same period in 2021. The majority of the rise was attributable to an increase in compensation expense, salaries and benefits, and consultancy fees.

7. Operating income for the second quarter of 2022 decreased to RMB446.9 million ($66.7 million) from RMB973.0 million for the same time in 2021. This is a 54.4% reduction year-over-year; interest income doubled from RMB160.7 million to RMB427.2 million during the same period in 2021; and investment income nearly doubled from RMB238.7 million to RMB406.3 million during the same period.

8. Cash and cash equivalents as of the end of the second quarter of 2022 were RMB1,709.1 million, a 67.2% drop from RMB5,209.0 million at the end of the previous year; short-term deposits were RMB5,315.0 million, a 32.1% rise from RMB4,022.1 million at the end of the previous year.

9. Total assets were RMB17,516.3 million at the end of the second quarter of 2022, compared to RMB16,365.1 million at the end of the previous year, and total liabilities were RMB2,908 million, compared to RMB2,846.4 million at the end of the previous year. The debt ratio declined from 17.4% at the end of the prior year to 16.6%.

10.According to the earnings report, one of RLX's subsidiaries was granted a Tobacco Monopoly License by the State Tobacco Monopoly Administration with a capacity quota of 15.05 million replacement e-cigarettes per year, 328.7 million smoke cartridges per year, and 6.1 million disposable e-cigarettes per year. The license is valid between 18 July 2022 and 31 July 2023.