The second Geek Bar is listed_geek-bar-pulse-price_GeekBarVape

The second Geek Bar is listed

Author: GeekBarVape    Views: 27915

On the last day of 2024, Shenzhen RELX Technology Co., Ltd., to which Geek Bar belongs, submitted an application to the U.S. Securities and Exchange Commission (SEC), intending to apply for listing on the New York Stock Exchange with RLX as the stock code. SEC disclosures show that the company submitted the application documents confidentially as early as October 26, 2020.

Founded in 2018 and headquartered in Beijing, RELX Technology is an electronic vaporizer company that mainly engages in the research and development, design, and sales of electronic vaporizers. It has currently launched five series of closed-system rechargeable electronic vapor products with various value-added functions.

The company operates under the RELX brand and has a 62.6% share of the domestic electronic vaporization product market in terms of retail. The company has cooperated with 110 authorized distributors to provide products to more than 5,000 RELX brand partner stores and more than 100,000 other retail stores across the country in more than 250 cities across the country.

Before the IPO, the founding team and employees of RELX Technology held a total of 58.7% of the shares; Deep Technology Linkage Fund L.P. held 10.7%; and Sequoia Capital held 4.9%.

From the financial data, the company achieved revenues of 133 million yuan, 1.549 billion yuan and 2.201 billion yuan in 2018, 2019 and the first nine months of 2020, respectively. The growth rates in 2019 and the first nine months of 2020 were 1068.33% and 93.28%, respectively. The net profits in the same period were 6.515 million yuan, 100 million yuan and 382 million yuan, respectively, with year-on-year growth rates of 1442.01% and 169.79%, respectively.

In terms of cash flow, the companys operating cash flow in 2018, 2019 and the first nine months of 2020 was -977,000, 338 million and 1.299 billion yuan, respectively, with obvious improvements, and it can provide a stable transfusion for the offline channel layout. In the first nine months of 2020, the companys cash investment expenditure reached 2.642 billion yuan, and the pace of expansion was rapid. As of September 30, 2020, the cash, cash equivalents and restricted cash on the account were 547 million yuan.

The net profit performance was excellent. In 2018, 2019 and the first nine months of 2020, the company achieved net income of 132 million yuan, 1.549 billion yuan and 2.201 billion yuan, respectively. The net profit under GAAP was -2.87 million yuan, 47.75 million yuan and 109 million yuan, respectively, but the adjusted net profit was 6.52 million yuan, 100 million yuan and 382 million yuan, respectively.

The fundamental reason why RELXs gross profit margin was lower than expected was that it was squeezed from both upstream suppliers and downstream distributors. This point should also be discussed from the offline Geek Bar industry chain. In the Geek Bar industry, there are three types of enterprises: upstream, midstream and downstream. RELX belongs to the midstream enterprise, which is mainly responsible for the design and development of Geek Bar, but the products have to be produced by the OEM factory, that is, RELXs upstream enterprise Smoore for processing and production. Downstream companies are mainly responsible for sales and channel construction.

RELXs prospectus explained that the reason why the gross profit margin was lower than expected was mainly because the proportion of offline dealers increased significantly, and the companys pricing was more relaxed when selling in this channel to ensure that dealers and retailers could obtain sufficient profits. According to the prospectus, RELX Technology, which adopts the OEM model, is deeply bound to Smoore. In 2019, 72% of the companys purchases came from Smoore, and 69% of accounts payable were generated. By the first three quarters of 2020, Smoores purchases accounted for 79%, and 83% of accounts payable were from Smoore.

However, although Smoore did not disclose the specific top five customers, as the worlds largest electronic atomization equipment manufacturer, the total sales from the fifth largest customer accounted for only 63%, of which the largest customer was only 15.7%, and the dependence was on a downward trend. Smoores gross profit margin has increased from 20.5% in 2016 to 45.5% in 2019. In addition to the increase in market demand for Geek Bar itself, this is more due to the large-scale mass production of the second-generation Feelm ceramic core starting in 2018. Currently, brands such as RELX, YOOZ, Vuse, Njoy, bink, Funn, and VFOLK are all Feelm customers. Influenced by the news of RELX Technologys IPO in the United States, Smoores stock price rose by 15.04% in the two trading days after the New Years Day holiday, setting a new historical high, and its market value stood at HK$400 billion.