RLX Technology Inc.

RLX Technology Inc. (NYSE: RLX) is an e-vapor company based in China, engaged in scientific research, technology and product development, supply chain management, and offline distribution in the e-vapor industry.

Key Highlights

• The company reported YoY growth of 123.08% in revenues to RMB 3.82 billion in FY21 (ended December 31, 2021) compared to RMB 8.52 billion in FY20.
• RLX reported net profit of RMB 2.03 billion in FY21 vs. a net loss of RMB 128.10 million in FY20.
• As of December 31, 2021, the company had cash and cash equivalents of RMB 5.21 billion and total debt of USD 7.64 billion.
• RLX’s net margin for FY21 was 23.8%, significantly higher than the industry median of 9.5%.
• Stock is currently trading below its crucial short-term (50-day) and long-term (200-day) SMA support levels, a bearish indicator.
• The stock is leaning towards the lower end of its 52-week range of USD 1.16 to USD 12.90.

Conclusion: Considering the surge in topline and bottomline, technical indicators, and associated risks, we recommend a "Watch" rating on the stock at the closing price of USD 2.30, up 4.55%, as of March 22, 2022.

Technical Price Chart (March 22, 2022). Source: REFINITIV, Analysis by Kalkine Group

Technical Analysis Summary:

*Closing price as of March 22, 2022.

Investors can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

Note 1: The reference data in this report has been partly sourced from REFINITIV.  

Note 2: Investment decision should be made depending on the investors' appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the valuation has been achieved and subject to the factors discussed above.