Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

RLX Technology Inc / Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/rlx-technology-inc" target="_blank" data-smartkarma-citation="entities:31113:1" rel="noopener">RLX Technology Inc (RLX US)</a> aims to raise around US$1bn in its US listing. RLX is the largest branded e-vapor company in China with a market share of closed-system e-vapor products in terms of retail sales value of 48% in 2019 and 62.6% over 9M20. </p></div><div><p>RLX only sells its e-vapor products in China. As of Sep 2020, it had over 5,000 branded partner stores and sold its products in over 100,000 other retail outlets, covering over 250 cities in China.</p></div><div>
<p>Even though the company only started operations in 2018, it was already recording sales of around US$330m by 9M20. Margins too have been on an uptrend and operating cash flows have been robust. Moreover, the founding team and investor backing appear strong.</p>
<p>However, sales have mostly grown owing to rapid expansion of its distribution network. Furthermore, the brand also appears to have overseas operations but there has been no mention of that in the company’s filings leaving one to wonder where these operations are housed and who exactly owns them.</p>
<p>In my earlier insight, <a href="https://www.smartkarma.com/insights/rlx-technology-pre-ipo-the-positives-fast-growth-low-penetration" target="_blank" rel="noopener">RLX Technology Pre-IPO - The Positives - Fast Growth, Low Penetration</a>, I spoke about the positive aspects of the company. In this insight, I'll highlight some of the not so flattering aspects. </p>
</div>

RLX Technology Inc (RLX US) aims to raise around US$1bn in its US listing. RLX is the largest branded e-vapor company in China with a market share of closed-system e-vapor products in terms of retail sales value of 48% in 2019 and 62.6% over 9M20. RLX only sells its e-vapor products in China. As of Sep 2020, it had over 5,000 branded partner stores and sold its products in over 100,000 other retail outlets, covering over 250 cities in China.
Even though the company only started operations in 2018, it was already recording sales of around US$330m by 9M20. Margins too have been on an uptrend and operating cash flows have been robust. Moreover, the founding team and investor backing appear strong.
However, sales have mostly grown owing to rapid expansion of its distribution network. Furthermore, the brand also appears to have overseas operations but there has been no mention of that in the company’s filings leaving one to wonder where these operations are housed and who exactly owns them.
In my earlier insight, RLX Technology Pre-IPO - The Positives - Fast Growth, Low Penetration, I spoke about the positive aspects of the company. In this insight, I'll highlight some of the not so flattering aspects. 


RLX Technology Pre-IPO - The Negatives - Limited Track Record, and Missing International Ops

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<p><a href="https://www.smartkarma.com/entities/rlx-technology-inc" target="_blank" data-smartkarma-citation="entities:31113:1" rel="noopener">RLX Technology Inc (RLX US)</a> is the leading branded e-vapour company in China with a 62.6% of the market share of closed-system e-vapour products as measured by retail sales value in 9M20, according to CIC. It is seeking is raise as much as $1 billion through an NYSE IPO, according to press reports.</p><p>In <a href="https://www.smartkarma.com/insights/rlx-technology-ipo-initiation-smoke-signals" target="_blank" data-smartkarma-citation="insights:46758" rel="noopener">RLX Technology IPO Initiation: Smoke Signals</a>, we noted that while regulatory uncertainty will remain an overhang, RLX is an attractive play on the rapid growth of the e-vapour market in China. Investors can also gain exposure to this secular growth trend through <a href="https://www.smartkarma.com/entities/smoore-international" target="_blank" data-smartkarma-citation="entities:28241:1" rel="noopener">Smoore International (6969 HK)</a>, which has stormed ahead around 5x from its IPO price.</p><div class="content-highlight"><p>In this note, we compare RLX and Smoore’s business model and fundamentals. Subject to the proposed IPO price range, investors largely face a trade-off between RLX’s high growth and lower regulatory risk vs Smoore’s scale and higher profitability, in our view. </p></div>

RLX Technology Inc (RLX US) is the leading branded e-vapour company in China with a 62.6% of the market share of closed-system e-vapour products as measured by retail sales value in 9M20, according to CIC. It is seeking is raise as much as $1 billion through an NYSE IPO, according to press reports.In RLX Technology IPO Initiation: Smoke Signals, we noted that while regulatory uncertainty will remain an overhang, RLX is an attractive play on the rapid growth of the e-vapour market in China. Investors can also gain exposure to this secular growth trend through Smoore International (6969 HK), which has stormed ahead around 5x from its IPO price.In this note, we compare RLX and Smoore’s business model and fundamentals. Subject to the proposed IPO price range, investors largely face a trade-off between RLX’s high growth and lower regulatory risk vs Smoore’s scale and higher profitability, in our view. 

RLX Technology Vs Smoore: Which Is a Better Play on the Vaping Market?

<p><a href="https://www.smartkarma.com/entities/rlx-technology-inc" target="_blank" data-smartkarma-citation="entities:31113:1" rel="noopener">RLX Technology Inc (RLX US)</a> aims to raise around US$1bn in its US listing. RLX is the largest branded e-vapor company in China with a market share of closed-system e-vapor products in terms of retail sales value of 48% in 2019 and 62.6% over 9M20. </p><p>RLX only sells its e-vapor products in China. As of Sep 2020, it had over 5,000 branded partner stores and sold its products in over 100,000 other retail outlets, covering over 250 cities in China.</p><p>Even though the company only started operations in 2018, it was already recording sales of around US$330m by 9M20. Margins too have been on an uptrend and operating cash flows have been robust. Moreover, the founding team and investor backing appear strong.</p><p>In this insight, I'll talk about the positive aspects of the company.</p>

RLX Technology Inc (RLX US) aims to raise around US$1bn in its US listing. RLX is the largest branded e-vapor company in China with a market share of closed-system e-vapor products in terms of retail sales value of 48% in 2019 and 62.6% over 9M20. RLX only sells its e-vapor products in China. As of Sep 2020, it had over 5,000 branded partner stores and sold its products in over 100,000 other retail outlets, covering over 250 cities in China.Even though the company only started operations in 2018, it was already recording sales of around US$330m by 9M20. Margins too have been on an uptrend and operating cash flows have been robust. Moreover, the founding team and investor backing appear strong.In this insight, I'll talk about the positive aspects of the company.

RLX Technology Pre-IPO - The Positives - Fast Growth, Low Penetration

Alibaba Group Holding  / Equity Capital Markets

<p>2020 marked our second full year of operations as an Independent Research Company, and our fifth year covering Equity Capital Markets (ECM). While the year started off on a precarious note for ECM, it ended with very strong momentum. Even as IPOs have hogged the limelight in 2020, we actually ended up covering more than twice the number of placements as IPOs. </p><p>We ended 2020 with an accuracy rate of 72.7% across 88 IPOs that we covered and 70.1% across 174 placements. While our placements hit rate improved, our IPO hit rate took a dip from 2019.</p><p>For those not familiar with our coverage, we aim to cover all IPOs and placements with a minimum deal size of US$100m across Asia-Pacific (ex-Korea), including China ADRs.</p>

2020 marked our second full year of operations as an Independent Research Company, and our fifth year covering Equity Capital Markets (ECM). While the year started off on a precarious note for ECM, it ended with very strong momentum. Even as IPOs have hogged the limelight in 2020, we actually ended up covering more than twice the number of placements as IPOs. We ended 2020 with an accuracy rate of 72.7% across 88 IPOs that we covered and 70.1% across 174 placements. While our placements hit rate improved, our IPO hit rate took a dip from 2019.For those not familiar with our coverage, we aim to cover all IPOs and placements with a minimum deal size of US$100m across Asia-Pacific (ex-Korea), including China ADRs.

Aequitas 2020 IPOs and Placements Performance - IPOs in the Limelight but Placements Stole the Show

<p><a href="https://www.smartkarma.com/entities/rlx-technology-inc" target="_blank" data-smartkarma-citation="entities:31113:1" rel="noopener">RLX Technology Inc (RLX US)</a> is the leading branded e-vapour company in China with 62.6% of the market share of closed-system e-vapour products as measured by retail sales value in 9M20, according to CIC. It is backed by Sequoia Capital, a 4.9% shareholder. It is seeking is raise as much as $1 billion through an NYSE IPO (it has filed with a $100 million placeholder raise), according to press reports.</p><div class="content-highlight"><p>RLX is a play on the rapid growth of the e-vapour market in China which is dominated by closed-system products, which accounted for 74.1% of the e-vapour market by retail sales value in 2019, according to CIC. China’s closed-system e-vapour market is forecasted to grow at a CAGR of 77.5% from 2019 to 2023 to reach $11.0 billion in 2023, according to CIC. While regulatory uncertainty will remain an overhang, RLX is an attractive play on this secular growth trend.</p></div>

RLX Technology Inc (RLX US) is the leading branded e-vapour company in China with 62.6% of the market share of closed-system e-vapour products as measured by retail sales value in 9M20, according to CIC. It is backed by Sequoia Capital, a 4.9% shareholder. It is seeking is raise as much as $1 billion through an NYSE IPO (it has filed with a $100 million placeholder raise), according to press reports.RLX is a play on the rapid growth of the e-vapour market in China which is dominated by closed-system products, which accounted for 74.1% of the e-vapour market by retail sales value in 2019, according to CIC. China’s closed-system e-vapour market is forecasted to grow at a CAGR of 77.5% from 2019 to 2023 to reach $11.0 billion in 2023, according to CIC. While regulatory uncertainty will remain an overhang, RLX is an attractive play on this secular growth trend.

RLX Technology IPO Initiation: Smoke Signals

United States

RLX Technology Inc. operates as an e-vapor company. The Company offers product development, research, supply chain management, and offline distribution services. RLX Technology serves customers in the United States.

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RLX Technology Inc (RLX US)

RLX Technology Pre-IPO - The Negatives - Limited Track Record, and Missing International Ops

RLX Technology (RLX US) aims to raise around US$1bn in its US listing. RLX is the largest branded e-vapor company in China with a market share of...

Sumeet Singh

RLX Technology Vs Smoore: Which Is a Better Play on the Vaping Market?

We compare RLX and Smoore’s business model and fundamentals. Investors largely face a trade-off between RLX’s high growth and lower reg risk vs...

Arun George

RLX Technology Pre-IPO - The Positives - Fast Growth, Low Penetration

RLX Technology (RLX US) aims to raise around US$1bn in its US listing. RLX is the largest branded e-vapor company in China with a market share of...

Sumeet Singh

Aequitas 2020 IPOs and Placements Performance - IPOs in the Limelight but Placements Stole the Show

2020 marked our second year of operations as an Independent Research Company, and our fifth year covering ECM. In 2020 we had an accuracy rate of...

Sumeet Singh

RLX Technology IPO Initiation: Smoke Signals

RLX is seeking is raise as much as $1 billion through an NYSE IPO, according to press reports. Overall, RLX is an attractive play on this secular...

Arun George

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