[summary of the research report]

Equity structure

The company was founded on January 2, 2018 and filed its prospectus on NASDAQ on December 31, 2020, US time. The company is listed overseas through VIE architecture. According to the ownership structure chart, the overseas parent company is Relx Inc., and the main body of listing is RLXTechnology Inc.

Relx inc. The parent company, which is the main body of the listing, was established in the Cayman Islands in August 2018 and is an offshore holding company for business at home and abroad in China. In the same month, it established Relx HKLimited as its intermediate holding company in Hong Kong. The latter established a wholly-owned subsidiary Beijing Yueke Technology Co., Ltd. (Beijing Yueke) in October in China. At present, Relx Inc. Conduct business outside China through other offshore entities. Listed subject RLXTechnology Inc. Is its wholly owned holding company in the Cayman Islands. After a series of contractual arrangements, Relx Inc. Is the main beneficiary of Beijing Fog Core. Ms. Wang Ying is the controlling shareholder and actual controller of the company, and serves as the chairman of the board and CEO of the company.

Investment suggestion

We believe that as the largest electronic atomization brand in China, the company has significant advantages in channels and products. With the further improvement of domestic atomization products and new tobacco penetration, the company is expected to continue to share the excess growth of the industry. Although the epidemic in 2020 has a certain negative impact on global consumer goods and industries, we believe that due to the strong addiction of nicotine and the relatively stable consumer demand of users, the company's performance is expected to continue to exceed the growth rate of the industry after 2020. Investors are advised to pay attention.

Risk hint

The risk of changing the new tobacco policy. The new tobacco business is the company's core business, and the new tobacco industry policy is still likely to change in the future. if the company predicts the deviation of the industry policy, it will have a negative impact on performance growth.

Risks in the development of new tobacco technologies. One of the core competencies of the company is the leadership of products and technology. if competitors develop more advanced technology and apply products, it may have a negative impact on the company's existing performance.

Sales / business development is not as expected. The final application of the company's products are consumer goods. If consumers' hobbies change and the company does not have the corresponding technology reserves, it will be in a passive position and affect the company's performance.

The risk of exchange rate fluctuations. The main source of revenue and profit of the company is the domestic market, and exchange rate fluctuations will have an impact on the company's dollar-denominated performance.

The risk of increased competition in the market. With the expansion of the company scale and the increase of investment, if the channel cost and the choice of sales strategy can not adapt to the market changes in time, the company will face a certain risk of market competition.