Exhibit 99.1 

RLX Technology Announces Unaudited Second Quarter 2021 Financial Results

BEIJING, August 20, 2021 /PRNEWSWIRE/ - RLX Technology Inc. (“RLX Technology” or the “Company”) (NYSE: RLX), a leading branded e-vapor company in China, today announced its unaudited financial results for the second quarter ended June 30, 2021.

Second Quarter 2021 Financial Highlights

· Net revenues were RMB2,541.4 million (US$393.6 million), representing an increase of 6.0% from RMB2,398.5 million in the first quarter of 2021.

· Gross margin was 45.1%, compared to 46.0% in the first quarter of 2021.

· U.S. GAAP net income was RMB824.3 million (US$127.7 million), compared with U.S. GAAP net loss of RMB267.0 million in the first quarter of 2021.

· Non-GAAP net income¹ was RMB651.8 million (US$100.9 million), representing an increase of 6.8% from RMB610.5 million in the first quarter of 2021.

“In the second quarter of 2021, our business continued to develop as we increased our efforts to further improve underage protection and product safety,” said Ms. Ying (Kate) Wang, Co-founder, Chairperson of the Board of Directors and Chief Executive Officer of RLX Technology. “With our strategic focus on technology investment and brand building, we strive to make RELX a trusted brand for adult smokers with state-of-the-art products, industry-leading technologies and scientific advances. Going forward, we will further enhance investments in scientific research, strengthen our distribution and retail network, and improve our supply chain and production capabilities, to create more value for our users and shareholders alike.”

Second Quarter 2021 Unaudited Financial Results

Net revenues increased by 6.0% to RMB2,541.4 million (US$393.6 million) in the second quarter of 2021 from RMB2,398.5 million in the first quarter of 2021. The increase was primarily due to an increase in net revenues from sales to offline distributors, which was mainly attributable to the expansion of the Company’s distribution and retail network. The Company believes that the slowdown in Q2 quarterly sequential revenue growth was primarily due to external factors including the negative publicity on the e-vapor industry in the latter half of the second quarter, coupled with the fact that the draft new rules announced on March 22, 2021 had not been formally confirmed and no new implementation details had been revealed, which had an adverse impact on our sales. Impacts from such external factors, along with recent extreme weather in several provinces of China and tightened social restrictions on a national level due to delta outbreaks, may persist after the second quarter and be difficult to predict.

Gross profit increased by 3.8% to RMB1,146.5 million (US$177.6 million) in the second quarter of 2021 from RMB1,104.1 million in the first quarter of 2021.

Gross margin was 45.1% in the second quarter of 2021, compared to 46.0% in the first quarter of 2021.

Operating expenses were RMB167.2 million (US$25.9 million) in the second quarter of 2021, representing a decrease of 86.3% from RMB1,216.0 million in the first quarter of 2021. The significant decrease in operating expenses was primarily due to the recognition of share-based compensation expenses of positive RMB172.5 million (US$26.7 million), consisting of (i) share-based compensation expenses of positive RMB51.5 million (US$8.0 million) recognized in selling expenses, (ii) share-based compensation expenses of positive RMB41.4 million (US$6.4 million) recognized in general and administrative expenses, and (iii) share-based compensation expenses of positive RMB79.7 million (US$12.3 million) recognized in research and development expenses. The significant fluctuations in share-based compensation expenses were primarily due to the changes in the fair value of the share incentive awards that the Company granted to its employees as affected by the significant fluctuations of the share price of the Company.

¹ Non-GAAP net (loss)/income is a non-GAAP financial measure. For more information on the Company's non-GAAP financial measures, please see the section “Non-GAAP Financial Measures” and the table captioned "Unaudited Reconciliation of GAAP and Non-GAAP Results" set forth at the end of this press release.

Selling expenses decreased by 56.8% to RMB126.0 million (US$19.5 million) in the second quarter of 2021 from RMB291.5 million in the first quarter of 2021. The decrease was mainly driven by (i) the fluctuation of share-based compensation expenses, and (ii) a decrease in salaries and welfare benefits, partially offset by an increase in branding material expenses.

General and administrative expenses decreased by 93.5% to RMB46.1 million (US$7.1 million) in the second quarter of 2021 from RMB712.8 million in the first quarter of 2021. The decrease was mainly driven by (i) the fluctuation of the share-based compensation expenses, and (ii) a decrease in salaries and welfare benefits, partially offset by an increase in legal and other consulting fees.

Research and development expenses decreased by 102.3% to positive RMB4.9 million (US$0.8 million) in the second quarter of 2021 from RMB211.6 million in the first quarter of 2021. The decrease was mainly driven by (i) the fluctuation of the share-based compensation expenses, (ii) a decrease in salaries and welfare benefits, partially offset by an increase in depreciation and amortization expenses.

Income from operations was RMB979.3 million (US$151.7 million) in the second quarter of 2021, compared with loss from operations of RMB111.9 million in the first quarter of 2021.

Income tax expense was RMB204.2 million (US$31.6 million) in the second quarter of 2021, compared with RMB176.3 million in the first quarter of 2021. The increase was primarily due to an increase in taxable income.

U.S. GAAP net income was RMB824.3 million (US$127.7 million) in the second quarter of 2021, compared with U.S. GAAP net loss of RMB267.0 million in the first quarter of 2021.

Non-GAAP net income was RMB651.8 million (US$100.9 million) in the second quarter of 2021, representing an increase of 6.8% from RMB610.5 million in the first quarter of 2021.

U.S. GAAP basic and diluted net income per American depositary share (“ADS”) were RMB0.595 (US$0.092) and RMB0.591 (US$0.092), respectively, in the second quarter of 2021, compared to U.S. GAAP basic and diluted net loss per ADS of both RMB0.174 in the first quarter of 2021.

Non-GAAP basic and diluted net income per ADS² were RMB0.470 (US$0.073) and RMB0.467 (US$0.072), respectively, in the second quarter of 2021, compared to non-GAAP basic and diluted net income per ADS of both RMB0.398 in the first quarter of 2021.

Balance Sheet

As of June 30, 2021, the Company had cash and cash equivalents, restricted cash, short-term bank deposits, short-term investments and long-term bank deposits of RMB14,880.8 million (US$2,304.7 million), compared to RMB14,437.8 million as of March 31, 2021. As of June 30, 2021, approximately US$1,642.9 million (RMB10,610.1 million) was denominated in U.S. dollars.

² Non-GAAP basic and diluted net income per ADS is a non-GAAP financial measure. For more information on the Company's non-GAAP financial measures, please see the section “Non-GAAP Financial Measures” and the table captioned "Unaudited Reconciliation of GAAP and Non-GAAP Results" set forth at the end of this press release.

Conference Call

The Company’s management will host an earnings conference call at 8:00 A.M. U.S. Eastern Time on August 20, 2021 (8:00 P.M. Beijing/Hong Kong Time on August 20, 2021).

Dial-in details for the earnings conference call are as follows:

United States (toll free):	+1-888-317-6003
International:	+1-412-317-6061
Hong Kong, China (toll free):	+800-963-976
Hong Kong, China:	+852-5808-1995
Mainland China:	400-120-6115
Participant Code:	3064741

Participants should dial-in at least 10 minutes before the scheduled start time and ask to be connected to the call for “RLX Technology Inc.” with the Participant Code as set forth above.

Additionally, a live and archived webcast of the conference call will be available on the Company's investor relations website at https://ir.relxtech.com.

A replay of the conference call will be accessible approximately two hours after the conclusion of the call until August 27, 2021, by dialing the following telephone numbers:

United States:	+1-877-344-7529
International:	+1-412-317-0088
Replay Access Code:	10159403

About RLX Technology Inc.

RLX Technology Inc. (NYSE: RLX) is a leading branded e-vapor company in China. The Company leverages its strong in-house technology and product development capabilities and in-depth insights into adult smokers' needs to develop superior e-vapor products. RLX Technology Inc. sells its products through an integrated offline distribution and "branded store plus" retail model tailored to China's e-vapor market.

For more information, please visit: http://ir.relxtech.com.

Non-GAAP Financial Measures

The Company uses Non-GAAP net income and Non-GAAP basic and diluted net income per ADS, each a non-GAAP financial measure, in evaluating its operating results and for financial and operational decision-making purposes. Non-GAAP net income represents net income excluding share-based compensation expenses. Non-GAAP basic and diluted net income per ADS is computed using Non-GAAP net income and the same number of ADSs used in U.S. GAAP basic and diluted net income/(loss) per ADS calculation.

The Company presents these non-GAAP financial measures because they are used by the management to evaluate its operating performance and formulate business plans. The Company believes that they help identify underlying trends in its business that could otherwise be distorted by the effect of certain expenses that are included in net income/(loss). The Company also believes that the use of the non-GAAP measures facilitates investors' assessment of its operating performance, as they could provide useful information about its operating results, enhances the overall understanding of its past performance and future prospects and allows for greater visibility with respect to key metrics used by the management in its financial and operational decision making.

The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools. They should not be considered in isolation or construed as an alternative to net income/(loss), basic and diluted net income/(loss) per ADS or any other measure of performance or as an indicator of its operating performance. Investors are encouraged to review its historical non-GAAP financial measures to the most directly comparable U.S. GAAP measures. The non-GAAP financial measures here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to our data. The Company encourages investors and others to review its financial information in its entirety and not rely on any single financial measure.

For more information on the non-GAAP financial measures, please see the table captioned “Unaudited Reconciliation of GAAP and non-GAAP Results” set forth at the end of this press release.

Exchange Rate Information

This announcement contains translations of certain RMB amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars and from U.S. dollars to RMB are made at a rate of RMB6.4566 to US$1.00, the exchange rate on June 30, 2021 set forth in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or U.S. dollars amounts referred could be converted into U.S. dollars or RMB, as the case may be, at any particular rate or at all.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “is/are likely to,” “potential,” “continue” and similar statements. Among other things, quotations from management in this announcement, as well as the Company’s strategic and operational plans, contain forward-looking statements. The Company may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including but not limited to statements about the Company’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the Company’s growth strategies; its future business development, results of operations and financial condition; trends and competition in China’s e-vapor market; changes in its revenues and certain cost or expense items; PRC governmental policies, laws and regulations relating to the Company's industry, and general economic and business conditions globally and in China and assumptions underlying or related to any of the foregoing. Further information regarding these risks, uncertainties or factors is included in the Company’s filings with the U.S. Securities and Exchange Commission. All information provided in this press release and in the attachments is current as of the date of this press release, and the Company does not undertake any obligation to update such information, except as required under applicable law.

For more information, please contact:

In China:

RLX Technology Inc. 

Head of Investor Relations 

Sam Tsang 

Email: ir@relxtech.com

The Piacente Group, Inc. 

Jenny Cai 

Tel: +86-10-6508-0677 

Email: RLX@tpg-ir.com

In the United States:

The Piacente Group, Inc. 

Brandi Piacente 

Tel: +1-212-481-2050 

Email: RLX@tpg-ir.com

RLX TECHNOLOGY INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(All amounts in thousands, except for share and per share data, or otherwise noted)

	As of
	December 31			June 30,			June 30,
	2020			2021			2021
	RMB			RMB			US$
ASSETS
Current assets:
Cash and cash equivalents		1,113,988			6,525,659			1,010,696
Restricted cash		340,813			500			77
Short-term bank deposits		493,282			2,300,950			356,372
Receivables from online payment platforms		862			2,706			419
Short-term investments		1,473,349			3,547,674			549,465
Accounts and notes receivable		20,089			22,794			3,530
Inventories, net		329,123			649,707			100,627
Amounts due from related parties		21,006			5,027			779
Prepayments and other current assets		74,383			316,623			49,039
Total current assets		3,866,895			13,371,640			2,071,004
Non-current assets:
Property, equipment and leasehold improvement, net		74,500			120,748			18,701
Intangible assets, net		5,393			6,816			1,056
Long-term investments		4,000			12,000			1,859
Deferred tax assets		6,000			815			126
Right-of-use assets, net		91,743			101,857			15,776
Long-term bank deposits		-			2,506,002			388,130
Other non-current assets		11,354			25,099			3,887
Total non-current assets		192,990			2,773,337			429,535
Total assets		4,059,885			16,144,977			2,500,539
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts and notes payable		1,459,782			2,177,407			337,237
Contract liabilities		320,434			118,093			18,290
Salary and welfare benefits payable		179,558			321,837			49,846
Taxes payable		363,644			357,494			55,369
Accrued expenses and other current liabilities		116,929			263,771			40,853
Amounts due to related parties		11,174			-			-
Lease liabilities - current portion		45,073			54,751			8,480
Total current liabilities		2,496,594			3,293,353			510,075
Non-current liabilities:
Deferred tax liabilities		5,210			5,210			807
Lease liabilities - non-current portion		49,448			49,824			7,717
Total non-current liabilities		54,658			55,034			8,524
Total liabilities		2,551,252			3,348,387			518,599
Shareholders’ equity:
Ordinary shares (US$0.00001 par value; 15,000,000,000 shares authorized; 1,436,815,570 shares issued and outstanding as of December 31, 2020; 1,570,790,570 shares issued and 1,345,854,800 shares outstanding as of June 30, 2021)		94			103			16
Additional paid in capital		1,589,857			12,329,779			1,909,640
Statutory reserves		1,000			1,000			155
(Accumulated deficit)/retained earnings		(81,640	)		475,635			73,666
Accumulated other comprehensive loss		(678	)		(9,927	)		(1,537	)
Total shareholders’ equity		1,508,633			12,796,590			1,981,940
Total liabilities and shareholders’ equity		4,059,885			16,144,977			2,500,539

RLX TECHNOLOGY INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME/(LOSS)

(All amounts in thousands, except for share and per share data, or otherwise noted)

	For the three months ended												For the six months ended
	June 30,			March 31,			June 30,			June 30,			June 30,			June 30,			June 30,
	2020			2021			2021			2021			2020			2021			2021
	RMB			RMB			RMB			US$			RMB			RMB			US$
Net revenues		712,500			2,398,496			2,541,402			393,613			1,081,102			4,939,898			765,093
Cost of revenues		(450,069	)		(1,294,423	)		(1,394,916	)		(216,045	)		(685,221	)		(2,689,339	)		(416,526	)
Gross profit		262,431			1,104,073			1,146,486			177,568			395,881			2,250,559			348,567
Operating expenses:
Selling expenses		(85,756	)		(291,535	)		(126,005	)		(19,516	)		(159,821	)		(417,540	)		(64,669	)
General and administrative expenses		(36,426	)		(712,814	)		(46,056	)		(7,133	)		(70,111	)		(758,870	)		(117,534	)
Research and development expenses		(27,573	)		(211,634	)		4,911			761			(51,850	)		(206,723	)		(32,017	)
Total operating expenses		(149,755	)		(1,215,983	)		(167,150	)		(25,888	)		(281,782	)		(1,383,133	)		(214,220	)
Income/(loss) from operations		112,676			(111,910	)		979,336			151,680			114,099			867,426			134,347
Other income/(expense):
Interest income, net		8,835			9,414			16,069			2,489			13,487			25,483			3,947
Investment income		1,367			14,927			23,868			3,697			2,889			38,795			6,009
Others, net		315			(3,167	)		9,185			1,423			12,954			6,018			932
Income/(loss) before income tax		123,193			(90,736	)		1,028,458			159,289			143,429			937,722			145,235
Income tax expense		(34,482	)		(176,293	)		(204,154	)		(31,619	)		(42,619	)		(380,447	)		(58,924	)
Net income/(loss)		88,711			(267,029	)		824,304			127,670			100,810			557,275			86,311
Other comprehensive (loss)/income:
Foreign currency translation adjustments		(209	)		175,523			(184,772	)		(28,618	)		513			(9,249	)		(1,432	)
Total other comprehensive (loss)/income		(209	)		175,523			(184,772	)		(28,618	)		513			(9,249	)		(1,432	)
Total comprehensive income/(loss)		88,502			(91,506	)		639,532			99,052			101,323			548,026			84,879
Net income/(loss) per ordinary share/ADS
- Basic		0.062			(0.174	)		0.595			0.092			0.070			0.382			0.059
- Diluted		0.062			(0.174	)		0.591			0.092			0.070			0.381			0.059
Weighted average number of ordinary shares/ADSs
- Basic		1,436,815,570			1,532,086,681			1,385,410,036			1,385,410,036			1,436,815,570			1,457,602,981			1,457,602,981
- Diluted		1,436,815,570			1,532,086,681			1,394,565,595			1,394,565,595			1,436,815,570			1,462,159,428			1,462,159,428

RLX TECHNOLOGY INC.

UNAUDITED RECONCILIATION OF GAAP AND NON-GAAP RESULTS

(All amounts in thousands, except for share and per share data, or otherwise noted)

	For the three months ended											For the six months ended
	June 30,		March 31,			June 30,			June 30,			June 30,		June 30,		June 30,
	2020		2021			2021			2021			2020		2021		2021
	RMB		RMB			RMB			US$			RMB		RMB		US$
Net income/(loss)		88,711		(267,029	)		824,304			127,670			100,810		557,275		86,311
Add: share-based compensation expenses
Selling expenses		5,669		120,703			(51,473	)		(7,972	)		9,295		69,230		10,722
General and administrative expenses		6,553		618,493			(41,404	)		(6,413	)		11,475		577,089		89,380
Research and development expenses		8,816		138,313			(79,666	)		(12,339	)		14,071		58,647		9,083
Non-GAAP net income		109,749		610,480			651,761			100,946			135,651		1,262,241		195,496
Non-GAAP net income per ordinary share/ADS
- Basic		0.076		0.398			0.470			0.073			0.094		0.866		0.134
- Diluted		0.076		0.398			0.467			0.072			0.094		0.863		0.134
Weighted average number of ordinary shares/ADSs
- Basic		1,436,815,570		1,532,086,681			1,385,410,036			1,385,410,036			1,436,815,570		1,457,602,981		1,457,602,981
- Diluted		1,436,815,570		1,532,086,681			1,394,565,595			1,394,565,595			1,436,815,570		1,462,159,428		1,462,159,428

RLX TECHNOLOGY INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(All amounts in thousands, except for share and per share data, or otherwise noted)

 

	For the three months ended												For the six months ended
	June 30,			March 31,			June 30,			June 30,			June 30,			June 30,			June 30,
	2020			2021			2021			2021			2020			2021			2021
	RMB			RMB			RMB			US$			RMB			RMB			US$
Net cash generated from operating activities		570,525			827,565			649,441			100,585			500,434			1,477,006			228,759
Net cash used in investing activities		(829,091	)		(2,814,247	)		(3,620,360	)		(560,722	)		(1,896,193	)		(6,434,607	)		(996,594	)
Net cash generated from/(used in) financing activities		234,948			10,037,422			(6,174	)		(956	)		1,051,268			10,031,248			1,553,642
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash		6,425			144,226			(146,515	)		(22,692	)		14,090			(2,289	)		(355	)
Net (decrease)/increase in cash and cash equivalents and restricted cash		(17,193	)		8,194,966			(3,123,608	)		(483,785	)		(330,401	)		5,071,358			785,452
Cash, cash equivalents and restricted cash at the beginning of the period		170,884			1,454,801			9,649,767			1,494,558			484,092			1,454,801			225,321
Cash, cash equivalents and restricted cash at the end of the period		153,691			9,649,767			6,526,159			1,010,773			153,691			6,526,159			1,010,773