Home https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Business https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ RLX technology more than doubled the price of an IPO on the first day of trading

RLX technology more than doubled the price of an IPO on the first day of trading

Chinese specialist in vaping products RLX technology (NYSE: RLX) made its debut in the US stock market. Following a $ 12 sale of a U.S. Depositary Share (ADS) at its initial public offering, the company’s stock opened at $ 22.34 for ADS on Friday, eventually rising to $ 29.51 at close.

In its initial public offering prospectus, RLX filed a lawsuit as “China’s No. 1 brand of electronic vapor company” with its RELX vaping line. The company said that its market share was nearly 63% in the first three quarters of 2020 and is number 1 in brand awareness in the country.

Like many companies entering the stock market recently, RLX is growing rapidly. In those three initial quarters of 2020, it reported net revenues of more than 2.20 billion yuan ($ 341

million), almost double the 1.14 billion yuan ($ 176 million) for the same period in 2019.

Young woman vaping.

Image source: Getty Images.

Unlike many new acquisitions, the Chinese company is profitable. Its net profit was 109 million yuan from the first to the third quarter of 2020, up from 97 million yuan a year ago.

RLX intends to use about 30% of the expected $ 1.35 billion raised in the IPO for research and development; 25% of the number should go to strengthen retail and distribution efforts and to improve the supply chain. And the rest will be dedicated to common corporate goals and working capital.

Currently, the company has only a slight presence in the US market and faces a particularly intimidating partner here Altria (NYSE: MO) with the next generation IQOS high level smoking product.

On Friday, shares of Altria more or less moved in line with the moderate decline of S&P 500 index. This shows that investors are not too worried about their new rival in the stock market.

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