What happened
Chinese vaping company RLX Technology (RLX -5.12%) was more than a wisp of smoke on Wednesday. Its American Depositary Shares (ADSes) wafted nearly 4% higher in price on the day, thanks to encouraging quarterly results. In contrast, the frothy S&P 500 index gained 1.2%.
So what
Before market open, RLX unveiled its first-quarter figures. The period saw the Chinese company take in revenue of just under 189 million yuan ($27 million), which was well down from the more than 1.7 billion yuan ($244 million) it booked in the same period of 2022.
It also flipped dramatically to a loss on the bottom line. This came in a bit over 56 million yuan ($8 million) on a GAAP basis, from the over 687 million yuan ($99 million) profit in the year-ago frame.
RLX waxed optimistic on its performance, saying that it managed to do relatively well despite several notable headwinds. These include new excise ("sin") taxes and determined illegal competition.
"While we strive to develop diversified, new, approved products that cater to users' various demands, the prevalence of illegal products has posed near-term challenges to our sales and disrupted the recovery pace of the industry as a whole," the company quoted CEO Ying Wang as saying.
"The increasing efforts put forth by the regulators to crack down on illegal products have been encouraging, and we are hopeful that these will be effective in supporting the creation of fair and orderly market conditions, prompting a return to sustainable growth," she added.
Now what
While RLX didn't offer any guidance, it did say that it would focus on improving its efficiency. It also predicted that its profitability will slowly recover from its recent declines.