RLX Technology reported net revenues of CNY1,71 billion ($270.4 million) for the first quarter ended March 31, 2022, compared with RMB2.4 billion in the same period of 2021. Gross margin was 38.3 percent, down from 46 percent in the same period of 2021. U.S. GAAP net income was RMB687.1 million, compared with a U.S. GAAP net loss of RMB267 million in the same period of 2021. Non-GAAP net income was RMB361.8 million, compared with RMB610.5 million in the same period of 2021.
“During the first quarter of 2022, we continued to focus on our core strategy and maintain our leading position in the industry while preparing for the anticipated regulatory changes,” said Ying (“Kate”) Wang, co-founder, chairperson and CEO of RLX Technology, in a statement.
“As the new regulatory framework has come into effect and detailed implementation measures have been released, we are proactively adapting our business to the new market environment by applying for the relevant licenses and developing qualified products that meet the requirements of the most recent national standards. We believe that, by leveraging our leading research and development abilities, we are able to launch market-leading products that conform to the national standards and satisfy our users’ needs.
RLX Technology attributed the decline in net revenues to the impact of the Covid-19 pandemic on its factory in Shenzhen, which limited the company’s production and shipment volumes.
“Our cash position remains solid, which will support us as we navigate the market dynamics and agilely adjust our business to the fluctuating macro environment,” said Chao Lu, chief financial officer of RLX Technology. “Looking ahead, we will remain focused on the business elements under our control, such as product innovation, cost optimization and operating efficiency, to reinforce our fundamentals and position ourselves to seize future opportunities. As always, we are committed to delivering sustainable growth for our shareholders in the long run.”