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 -5.12%) 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.
Image source: Getty Images.
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.
