Editor's note: This article has been corrected. RLX currently sells its e-vapor products only in China.
China-based vaping products specialist RLX Technology (RLX +1.82%) has made an auspicious debut on the U.S. stock market. After selling for $12 per American depositary share (ADS) in its initial public offering, the company's stock opened at $22.34 per ADS on Friday, eventually rising to $29.51 at the close.
In its IPO prospectus, RLX staked a claim as the "No. 1 branded e-vapor company in China," with its RELX line of vaping goods. The company said its market share was nearly 63% across the first three quarters of 2020, and it was No. 1 in brand awareness in the country.
Like many companies coming to the stock market lately, RLX is growing fast. It booked net revenue of over 2.20 billion yuan ($341 million) in those three initial quarters of 2020, almost double the 1.14 billion yuan ($176 million) in the same period of 2019.
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Unlike many new arrivals, the Chinese company is profitable. Its net income was 109 million yuan from the first to the third quarter in 2020, up from the year-ago figure of 97 million yuan.
RLX intends to use around 30% of the estimated $1.35 billion it collected in the IPO for research and development; 25% apiece should go to bolstering its retail and distribution efforts, and to improving its supply chain. And the rest will be devoted to general corporate purposes and working capital.
