Charlie Chen's questions to RLX Technology Inc (RLX) leadership • Q2 2024
Question
Charlie Chen of China Renaissance asked for a broad assessment of the Chinese e-vaping market, including its growth rate, penetration, the market share split between compliant and non-compliant products, and pricing trends. He also questioned the recent volatility in gross margin and its future outlook.
Answer
Sam Tsang, Head of Capital Markets, stated that tracking the market is difficult as non-compliant products dominate, though demand for compliant products is stable. He noted that overall penetration has slightly declined post-regulation. On pricing, the average selling price for compliant products is stable, but new larger-volume products could lower the price per milliliter. Tsang described the gross margin as 'impressively stable' due to supply chain efficiencies and pricing adjustments to offset taxes.