Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2023 shares | |
Document Information [Line Items] | |
Document Type | 20-F |
Document Registration Statement | false |
Document Annual Report | true |
Document Period End Date | Dec. 31, 2023 |
Current Fiscal Year End Date | --12-31 |
Document Transition Report | false |
Document Shell Company Report | false |
Entity File Number | 001-39902 |
Entity Registrant Name | RLX Technology Inc. |
Entity Incorporation, State or Country Code | E9 |
Entity Address, Address Line One | 35/F, Pearl International Financial Center |
Entity Address, Address Line Two | No. 9 Jian’an First Road, Financial Street |
Entity Address, Address Line Three | Third District, Bao’an District |
Entity Address, City or Town | Shenzhen, Guangdong Province |
Entity Address, Postal Zip Code | 518101 |
Entity Address, Country | CN |
Entity Common Stock, Shares Outstanding | 1,570,790,570 |
Entity Well-known Seasoned Issuer | Yes |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Emerging Growth Company | false |
ICFR Auditor Attestation Flag | true |
Document Financial Statement Error Correction [Flag] | false |
Document Accounting Standard | U.S. GAAP |
Entity Shell Company | false |
Entity Central Index Key | 0001828365 |
Document Fiscal Year Focus | 2023 |
Document Fiscal Period Focus | FY |
Amendment Flag | false |
Auditor Name | PricewaterhouseCoopers Zhong Tian LLP |
Auditor Location | Beijing, the People’s Republic of China |
Auditor Firm ID | 1424 |
Business Contact | |
Document Information [Line Items] | |
Entity Address, Address Line One | 35/F, Pearl International Financial Center |
Entity Address, Address Line Two | No. 9 Jian’an First Road, Financial Street |
Entity Address, Address Line Three | Third District, Bao’an District |
Entity Address, City or Town | Shenzhen, Guangdong Province |
Entity Address, Postal Zip Code | 518101 |
Entity Address, Country | CN |
Contact Personnel Name | Chao Lu |
Contact Personnel Email Address | ir@relxtech.com |
Country Region | 86 |
City Area Code | 755 |
Local Phone Number | 8696 7619 |
American Depository Shares | |
Document Information [Line Items] | |
Title of 12(b) Security | American Depositary Shares, eachrepresenting one Class A ordinary share,par value US$0.00001 per share |
Trading Symbol | RLX |
Security Exchange Name | NYSE |
Class A ordinary shares | |
Document Information [Line Items] | |
Title of 12(b) Security | Class A ordinary shares,par value US$0.00001 per share* |
Security Exchange Name | NYSE |
No Trading Symbol Flag | true |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | ||
Current assets | |||||
Cash and cash equivalents | ¥ 2,390,298 | $ 336,666 | ¥ 1,268,512 | [1] | |
Restricted cash | 29,760 | 4,192 | 20,574 | [1] | |
Short-term bank deposits, net | 2,631,256 | 370,605 | 7,084,879 | ||
Receivables from online payment platforms | 6,893 | 971 | 3,000 | ||
Short-term investments, net | 3,093,133 | 435,659 | 2,434,864 | ||
Accounts and notes receivable, net | 60,482 | 8,519 | 51,381 | ||
Inventories | 144,850 | 20,402 | 130,901 | ||
Prepayments and other current assets, net | 508,435 | 71,612 | 198,932 | ||
Total current assets | 8,983,843 | 1,265,350 | 11,198,155 | ||
Non-current assets | |||||
Property, equipment and leasehold improvement, net | 77,358 | 10,896 | 87,871 | ||
Intangible assets, net | 69,778 | 9,828 | 7,552 | ||
Long-term investments, net | 8,000 | 1,127 | 8,000 | ||
Deferred tax assets, net | 58,263 | 8,206 | 63,894 | ||
Right-of-use assets, net | 52,562 | 7,403 | 75,008 | ||
Long-term bank deposits, net | 1,757,804 | 247,582 | 1,515,428 | ||
Long-term investment securities, net | 5,236,109 | 737,491 | 3,409,458 | ||
Goodwill | 66,506 | 9,367 | |||
Other non-current assets, net | 4,874 | 686 | 13,458 | ||
Total non-current assets | 7,331,254 | 1,032,586 | 5,180,669 | ||
Total assets | 16,315,097 | 2,297,936 | 16,378,824 | ||
Current liabilities | |||||
Accounts and notes payable (including amounts of the consolidated VIE without recourse to the primary beneficiary of RMB268,761 and RMB 224,381 as of December 31, 2022 and 2023, respectively) | 266,426 | 37,525 | 269,346 | [1] | |
Contract liabilities (including amounts of the consolidated VIE without recourse to the primary beneficiary of RMB3,829 and RMB11,319 as of December 31, 2022 and 2023, respectively) | 49,586 | 6,984 | 75,226 | [1] | |
Salary and welfare benefits payable (including amounts of the consolidated VIE without recourse to the primary beneficiary of RMB53,438 and RMB19,519 as of December 31, 2022 and 2023, respectively) | 39,256 | 5,529 | 127,749 | [1] | |
Taxes payable (including amounts of the consolidated VIE without recourse to the primary beneficiary of RMB93,700 and RMB53,260 as of December 31, 2022 and 2023, respectively) | 77,164 | 10,868 | 109,676 | [1] | |
Accrued expenses and other current liabilities (including amounts of the consolidated VIE without recourse to the primary beneficiary of RMB132,762 and RMB98,725 as of December 31, 2022 and 2023, respectively) | 103,996 | 14,648 | 161,455 | [1] | |
Dividend payable (including amounts of the consolidated VIE without recourse to the primary beneficiary of nil and nil as of December 31, 2022 and 2023, respectively). | 881 | 124 | |||
Lease liabilities - current portion (including amounts of the consolidated VIE without recourse to the primary beneficiary of RMB36,905 and RMB25,422 as of December 31, 2022 and 2023, respectively) | 29,435 | 4,146 | 45,955 | [1] | |
Total current liabilities | 668,671 | 94,180 | 789,830 | [1] | |
Non-current liabilities | |||||
Deferred tax liabilities (including amounts of the consolidated VIE without recourse to the primary beneficiary of RMB8,653 and RMB11,834 as of December 31, 2022 and 2023, respectively) | 23,591 | 3,323 | 8,653 | [1] | |
Lease liabilities - non-current portion (including amounts of the consolidated VIE without recourse to the primary beneficiary of RMB30,593 and RMB18,092 as of December 31, 2022 and 2023, respectively) | 24,419 | 3,439 | 39,968 | [1] | |
Total non-current liabilities | 48,010 | 6,762 | 48,621 | [1] | |
Total liabilities | 716,681 | 100,942 | 838,451 | [1] | |
Commitments and contingencies | [1] | ||||
Shareholders' equity | |||||
Ordinary shares (US$0.00001 par value; 15,000,000,000 shares authorized; 1,570,790,570 shares issued as of December 31, 2022; 1,570,790,570 shares issued as of December 31, 2023) (ii) | [2] | 104 | 15 | 104 | [1] |
Treasury stock | (1,280,989) | (180,424) | (627,886) | [1] | |
Additional paid-in capital | 12,115,485 | 1,706,434 | 12,062,278 | [1] | |
Statutory reserves | 27,811 | 3,916 | 27,811 | [1] | |
Retained earnings | 3,765,679 | 530,386 | 3,324,616 | [1] | |
Accumulated other comprehensive income | 981,303 | 138,213 | 782,137 | [1] | |
Total RLX Technology Inc. shareholders' equity | 15,609,393 | 2,198,540 | 15,569,060 | [1] | |
Noncontrolling interests | (10,977) | (1,546) | (28,687) | [1] | |
Total shareholders' equity | 15,598,416 | 2,196,994 | 15,540,373 | [1] | |
Total liabilities and shareholders' equity | 16,315,097 | 2,297,936 | 16,378,824 | [1] | |
Related Party | |||||
Current assets | |||||
Amounts due from related parties | 118,736 | 16,724 | 5,112 | ||
Current liabilities | |||||
Amounts due to related parties (including amounts of the consolidated VIE without recourse to the primary beneficiary of RMB423 and nil as of December 31, 2022 and 2023, respectively) | ¥ 101,927 | $ 14,356 | ¥ 423 | [1] | |
[1] The Company acquired various companies on December 13, 2023, which was accounted for as an under common control transaction in accordance with ASC 805-50. The Company retrospectively adjusted the above comparative consolidated balance sheets in prior year. Refer As of December 31, 2022, there were 1,570,790,570 ordinary shares issued, par value US $0.00001 per share, including 257,720,484 ordinary shares that consist of treasury shares held by the Company’s depositary bank and shares reserved for future exercise of share-based awards. As of December 31, 2023, there were 1,570,790,570 ordinary shares issued, par value US $0.00001 per share, including 299,188,826 ordinary shares that consist of treasury shares held by the Company’s depositary bank and shares reserved for future exercise of share-based awards. |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) shares | Dec. 31, 2022 CNY (¥) shares | |
Accounts and notes payable | ¥ 266,426 | ¥ 269,346 | [1] |
Contract liabilities | 49,586 | 75,226 | [1] |
Salary and welfare benefits payable | 39,256 | 127,749 | [1] |
Taxes payable | 77,164 | 109,676 | [1] |
Dividend payable | 881 | ||
Lease liabilities - current portion | 29,435 | 45,955 | [1] |
Deferred tax liabilities | 23,591 | 8,653 | [1] |
Lease liabilities - non-current portion | ¥ 24,419 | ¥ 39,968 | [1] |
Ordinary shares, shares authorized | shares | 15,000,000,000 | 15,000,000,000 | |
Ordinary shares, shares issued | shares | 1,570,790,570 | 1,570,790,570 | |
Treasury stock, ordinary shares | shares | 299,188,826 | 257,720,484 | |
Related Party | |||
Amounts due to related parties | ¥ 101,927 | ¥ 423 | [1] |
VIE | |||
Accounts and notes payable | 224,383 | 268,761 | |
Contract liabilities | 11,319 | 3,829 | |
Salary and welfare benefits payable | 19,519 | 53,438 | |
Taxes payable | 36,932 | 93,700 | |
Accrued expenses and other current liabilities | 95,125 | 132,762 | |
Dividend payable | 0 | 0 | |
Lease liabilities - current portion | 25,422 | 36,905 | |
Deferred tax liabilities | 7,695 | 8,653 | |
Lease liabilities - non-current portion | 18,092 | 30,593 | |
VIE | Related Party | |||
Amounts due to related parties | ¥ 0 | ¥ 423 | |
[1] The Company acquired various companies on December 13, 2023, which was accounted for as an under common control transaction in accordance with ASC 805-50. The Company retrospectively adjusted the above comparative consolidated balance sheets in prior year. Refer |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ¥ in Thousands, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2023 CNY (¥) ¥ / shares shares | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 CNY (¥) ¥ / shares shares | [1] | Dec. 31, 2021 CNY (¥) ¥ / shares shares | [1] | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||||
Net revenues | ¥ 1,586,397 | $ 223,439 | ¥ 5,332,779 | ¥ 8,520,978 | ||
Cost of revenues | (856,329) | (120,611) | (2,974,981) | (4,848,918) | ||
Excise tax on products | (342,354) | (48,220) | (52,668) | |||
Gross profit | 387,714 | 54,608 | 2,305,130 | 3,672,060 | ||
Operating expenses: | ||||||
Selling expenses (including share-based compensation expenses of RMB48,615, nil and nil allocated from Relx Inc. ("the former parent") (Note 22) ) | (213,723) | (30,102) | (347,798) | (520,694) | ||
General and administrative expenses (including share-based compensation expenses of RMB381,977, nil and nil allocated from Relx Inc. (Note22) ) | (498,015) | (70,144) | (576,811) | (672,748) | ||
Research and development expenses (including share-based compensation expenses of RMB43,540, nil and nil allocated from Relx Inc. (Note22) ) | (172,686) | (24,322) | (317,110) | (179,913) | ||
Total operating expenses | (884,424) | (124,568) | (1,241,719) | (1,373,355) | ||
Income/(loss) from operations | (496,710) | (69,960) | 1,063,411 | 2,298,705 | ||
Other income: | ||||||
Interest income, net | 627,879 | 88,435 | 180,729 | 72,414 | ||
Investment income | 245,700 | 34,606 | 136,531 | 94,222 | ||
Others, net | 214,874 | 30,264 | 399,641 | 194,209 | ||
Income before income tax | 591,743 | 83,345 | 1,780,312 | 2,659,550 | ||
Income tax expense | (50,755) | (7,149) | (371,580) | (631,426) | ||
Net income | 540,988 | 76,196 | 1,408,732 | [2] | 2,028,124 | [2] |
Less: net income/(loss) attributable to noncontrolling interests | 6,660 | 938 | (32,487) | 3,411 | ||
Net income attributable to RLX Technology Inc. | 534,328 | 75,258 | 1,441,219 | 2,024,713 | ||
Other comprehensive (loss)/income: | ||||||
Foreign currency translation adjustments | 198,534 | 27,963 | 937,428 | (149,188) | ||
Unrealized (loss)/income on investment securities | 632 | 89 | (5,425) | |||
Total other comprehensive (loss)/income | 199,166 | 28,052 | 932,003 | (149,188) | ||
Total comprehensive income | 740,154 | 104,248 | 2,340,735 | 1,878,936 | ||
Less: total comprehensive income/(loss) attributable to noncontrolling interests | 6,660 | 938 | (32,487) | 3,411 | ||
Total comprehensive income attributable to RLX Technology Inc. | ¥ 733,494 | $ 103,310 | ¥ 2,373,222 | ¥ 1,875,525 | ||
Net income per ordinary share | ||||||
-Basic | (per share) | ¥ 0.407 | $ 0.057 | ¥ 1.092 | ¥ 1.445 | ||
-Diluted | (per share) | ¥ 0.399 | $ 0.056 | ¥ 1.085 | ¥ 1.436 | ||
Weighted average number of ordinary shares | ||||||
-Basic | 1,311,401,901 | 1,311,401,901 | 1,319,732,802 | 1,401,371,494 | ||
-Diluted | 1,340,445,653 | 1,340,445,653 | 1,328,144,092 | 1,409,690,879 | ||
[1] The Company acquired various companies on December 13, 2023, which was accounted for as an under common control transaction in accordance with ASC 805-50. The Company retrospectively adjusted the above comparative consolidated statements of comprehensive income in prior years. Refer to Note 1 (e) for detailed information. The Company acquired various companies on December 13, 2023, which was accounted for as an under common control transaction in accordance with ASC 805-50. The Company retrospectively adjusted the above comparative consolidated balance sheets in prior year. Refer |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Sharebased compensation expense | ¥ 362,868 | ¥ 166,161 | ¥ 223,345 |
Relx inc (the former parent) | Selling expenses | |||
Sharebased compensation expense | 0 | 0 | 48,615 |
Relx inc (the former parent) | General and administrative expenses | |||
Sharebased compensation expense | 0 | 0 | 381,977 |
Relx inc (the former parent) | Research and development expenses | |||
Sharebased compensation expense | ¥ 0 | ¥ 0 | ¥ 43,540 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY ¥ in Thousands, $ in Thousands | Ordinary shares CNY (¥) shares | Treasury Stock CNY (¥) shares | Additional paid-in capital CNY (¥) | Statutory reserves CNY (¥) | (Accumulated deficit)/retained earnings CNY (¥) | Accumulated other comprehensive (loss)/income CNY (¥) | Non-controlling interests CNY (¥) | CNY (¥) shares | USD ($) shares | ||||
Balance at the beginning at Dec. 31, 2020 | [1] | ¥ 94 | ¥ 1,589,857 | ¥ 1,000 | ¥ (81,640) | ¥ (678) | ¥ 1,508,633 | ||||||
Balance at the beginning (in shares) at Dec. 31, 2020 | shares | [1] | 1,436,815,570,000 | |||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||
Net income/(loss) | 2,024,713 | ¥ 3,411 | 2,028,124 | [1],[2] | |||||||||
Issuance of ordinary shares upon Initial Public Offering ("IPO") | ¥ 9 | 10,034,956 | 10,034,965 | ||||||||||
Issuance of ordinary shares upon Initial Public Offering ("IPO") (in shares) | shares | 133,975,000,000 | ||||||||||||
Capital contribution from noncontrolling interests | 389 | 389 | |||||||||||
Sharebased compensation | 223,345 | 223,345 | |||||||||||
Appropriation to statutory reserves | 1,319 | (1,319) | |||||||||||
Share-based awards to employees of Relx Inc. | 325,447 | 325,447 | |||||||||||
Deemed dividend to shareholders in connection with the share-based awards to employees of Relx Inc. | (292,582) | (32,865) | (325,447) | ||||||||||
Shares reserved for future exercise of share-based awards due to share distribution | shares | (224,935,770,000) | ||||||||||||
Share repurchase | ¥ (127,516) | (127,516) | |||||||||||
Share repurchase (in shares) | shares | (5,059,733,000) | ||||||||||||
Foreign currency translation adjustments | (149,188) | (149,188) | [2] | ||||||||||
Balance at the end at Dec. 31, 2021 | [1] | ¥ 103 | ¥ (127,516) | 11,881,023 | 2,319 | 1,908,889 | (149,866) | 3,800 | 13,518,752 | ||||
Balance at the end (in shares) at Dec. 31, 2021 | shares | [1] | 1,570,790,570,000 | |||||||||||
Balance at the end (in shares) at Dec. 31, 2021 | shares | [1] | (229,995,503,000) | |||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||
Net income/(loss) | 1,441,219 | (32,487) | 1,408,732 | [1],[2] | |||||||||
Sharebased compensation | 166,161 | 166,161 | |||||||||||
Unrealized loss on investment securities | (5,425) | (5,425) | [2] | ||||||||||
Appropriation to statutory reserves | 25,492 | (25,492) | |||||||||||
Share-based awards to employees of Relx Inc. | (80,649) | (80,649) | |||||||||||
Deemed dividend to shareholders in connection with the share-based awards to employees of Relx Inc. | 80,649 | 80,649 | |||||||||||
Exercising of share-based awards | ¥ 1 | 15,094 | 15,095 | ||||||||||
Exercising of share-based awards (in shares) | shares | 9,648,928,000 | ||||||||||||
Share repurchase | ¥ (500,370) | (500,370) | |||||||||||
Share repurchase (in shares) | shares | (37,373,909,000) | ||||||||||||
Foreign currency translation adjustments | 937,428 | 937,428 | [2] | ||||||||||
Balance at the end at Dec. 31, 2022 | [1] | ¥ 104 | ¥ (627,886) | 12,062,278 | 27,811 | 3,324,616 | 782,137 | (28,687) | ¥ 15,540,373 | ||||
Balance at the end (in shares) at Dec. 31, 2022 | shares | 1,570,790,570,000 | [1] | 1,570,790,570 | 1,570,790,570 | |||||||||
Balance at the end (in shares) at Dec. 31, 2022 | shares | (257,720,484,000) | [1] | 257,720,484 | 257,720,484 | |||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||
Net income/(loss) | 534,328 | 6,660 | ¥ 540,988 | $ 76,196 | |||||||||
Capital contribution from noncontrolling interests | 11,050 | 11,050 | |||||||||||
Sharebased compensation | 362,868 | 362,868 | |||||||||||
Unrealized loss on investment securities | 632 | 632 | $ 89 | ||||||||||
Share-based awards to employees of Relx Inc. | 396,378 | 396,378 | |||||||||||
Deemed dividend to shareholders in connection with the share-based awards to employees of Relx Inc. | (396,378) | (396,378) | |||||||||||
Exercising of share-based awards | 15,441 | ¥ 15,441 | |||||||||||
Exercising of share-based awards (in shares) | shares | 11,834,355,000 | 10,802,458 | 10,802,458 | ||||||||||
Share repurchase | ¥ (653,103) | (343,525) | ¥ (996,628) | ||||||||||
Share repurchase (in shares) | shares | (53,302,697,000) | (95,700,000) | (95,700,000) | ||||||||||
Business combination | 18,423 | ¥ 18,423 | |||||||||||
Cash dividend | (93,265) | (93,265) | |||||||||||
Foreign currency translation adjustments | 198,534 | 198,534 | $ 27,963 | ||||||||||
Balance at the end at Dec. 31, 2023 | ¥ 104 | ¥ (1,280,989) | ¥ 12,115,485 | ¥ 27,811 | ¥ 3,765,679 | ¥ 981,303 | ¥ (10,977) | ¥ 15,598,416 | $ 2,196,994 | ||||
Balance at the end (in shares) at Dec. 31, 2023 | shares | 1,570,790,570,000 | 1,570,790,570 | 1,570,790,570 | ||||||||||
Balance at the end (in shares) at Dec. 31, 2023 | shares | (299,188,826,000) | 299,188,826 | 299,188,826 | ||||||||||
[1] The Company acquired various companies on December 13, 2023, which was accounted for as an under common control transaction in accordance with ASC 805-50. The Company retrospectively adjusted the above comparative consolidated balance sheets in prior year. Refer The Company acquired various companies on December 13, 2023, which was accounted for as an under common control transaction in accordance with ASC 805-50. The Company retrospectively adjusted the above comparative consolidated statements of comprehensive income in prior years. Refer to Note 1 (e) for detailed information. |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS ¥ in Thousands, $ in Thousands | 12 Months Ended | |||||||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |||||
Cash flows from operating activities: | ||||||||
Net income | ¥ 540,988 | $ 76,196 | ¥ 1,408,732 | [1],[2] | ¥ 2,028,124 | [1],[2] | ||
Adjustments to reconcile Net income to net cash generated from operating activities: | ||||||||
Depreciation of property, equipment and leasehold improvement | 37,622 | 5,299 | 76,041 | [1] | 40,865 | [1] | ||
Amortization of right-of-use assets | 50,087 | 7,055 | 83,051 | [1] | 67,907 | [1] | ||
Amortization of intangible assets | 8,892 | 1,252 | 5,367 | [1] | 4,774 | [1] | ||
Loss on disposal of long-term assets | 2,989 | 421 | 1,228 | [1] | 4,096 | [1] | ||
Dividend income | (640) | (90) | (640) | [1] | ||||
Deferred income tax | 4,495 | 633 | (38,898) | [1] | (15,553) | [1] | ||
Inventory write-downs | 35,695 | 5,028 | 179,694 | [1] | 89,071 | [1] | ||
Interest expense | [1] | 1,402 | ||||||
Foreign exchange (gain)/loss | (586) | (81) | 5,818 | [1] | (1,327) | [1] | ||
Share-based compensation expenses | 362,868 | 51,108 | 166,161 | [1] | 223,345 | [1] | ||
Impairment of long-term investments | 0 | 0 | 4,000 | [1] | 0 | [1] | ||
Unrealized investment income | (378,138) | (53,260) | (68,876) | [1] | (15,787) | [1] | ||
Impairment of property, equipment, and leasehold improvement and intangible assets | 5,008 | 705 | 29,938 | [1] | ||||
Impairment of other non-current assets | 72 | 10 | 12,591 | [1] | ||||
Gain on disposal of long-term investment | (164,400) | (23,155) | ||||||
Provision for credit losses | 1,615 | 227 | 25,039 | [1] | 2,562 | [1] | ||
Changes in operating assets and liabilities: | ||||||||
Accounts and notes receivable | 26,976 | 3,799 | (37,417) | [1] | 5,924 | [1] | ||
Receivables from online payment platforms | (3,893) | (548) | 7,006 | [1] | (9,144) | [1] | ||
Inventories | (39,054) | (5,501) | 278,493 | [1] | (349,036) | [1] | ||
Amounts due from related parties | (113,624) | (16,004) | (3,176) | [1] | (1,936) | [1] | ||
Amounts due to related parties | 60,397 | 8,507 | 423 | [1] | ||||
Prepayments and other current assets | 29,937 | 4,217 | 357,876 | [1] | (408,430) | [1] | ||
Other non-current assets | 2,240 | 315 | 11,159 | [1] | (17,582) | [1] | ||
Accounts and notes payable | (30,057) | (4,233) | (1,019,499) | [1] | (170,937) | [1] | ||
Contract liabilities | (25,798) | (3,634) | (211,425) | [1] | (33,783) | [1] | ||
Salary and welfare benefits payable | (88,493) | (12,464) | (42,644) | [1] | (9,165) | [1] | ||
Taxes payable | (36,861) | (5,190) | (490,645) | [1] | 234,117 | [1] | ||
Accrued expenses and other current liabilities | (29,924) | (4,215) | (173,278) | [1] | 193,916 | [1] | ||
Lease liabilities | (59,710) | (8,410) | (80,692) | [1] | (62,129) | [1] | ||
Net cash provided by operating activities | 198,703 | 27,987 | 486,829 | [1] | 1,799,892 | [1] | ||
Cash flows from investing activities: | ||||||||
Purchase of property, equipment, and leasehold improvement | (28,221) | (3,975) | (38,638) | [1] | (130,940) | [1] | ||
Purchase of intangible assets | (4,192) | (590) | (5,930) | [1] | (7,896) | [1] | ||
Purchase of short-term bank deposits | (4,843,210) | (682,152) | (18,525,804) | [1] | (3,245,043) | [1] | ||
Purchase of long-term bank deposits | (782,335) | (110,190) | (8,835,258) | [1] | (4,146,201) | [1] | ||
Proceeds from maturities of short-term bank deposits | 9,717,494 | 1,368,680 | 16,012,167 | [1] | 1,141,344 | [1] | ||
Proceeds from maturities of long-term bank deposits | 240,000 | 33,803 | 9,569,537 | [1] | 637,570 | [1] | ||
Purchase of short-term investments | (8,749,704) | (1,232,370) | (14,946,940) | [1] | (14,320,000) | [1] | ||
Purchase of long-term investment securities | (2,325,411) | (327,527) | (3,481,674) | [1] | ||||
Proceeds from maturities of short-term investments | 8,388,000 | 1,181,425 | 13,415,500 | [1] | 9,675,500 | [1] | ||
Sale of short-term investments | 320,000 | 45,071 | 2,704,000 | [1] | 2,512,000 | [1] | ||
Sale of long-term investment | 588,872 | 82,941 | ||||||
Purchase of long-term investments | (430,788) | (60,675) | (8,000) | [1] | ||||
Investment prepayment returned from Relx Inc. | [1] | 21,006 | ||||||
Dividend from investment | 640 | 91 | ||||||
Net cash (used in)/ generated from investing activities | 2,091,145 | 294,532 | (4,133,040) | [1] | (7,870,660) | [1] | ||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of ordinary share upon IPO, net of issuance costs | [1] | 10,042,422 | ||||||
Capital contribution from non-controlling interest | 11,050 | 1,556 | 389 | [1] | ||||
Proceeds from bank loan | [1] | 198,598 | ||||||
Repayments of bank loans | [1] | (200,000) | ||||||
Proceeds from exercise of employees' share options | 8,757 | 1,232 | 23,862 | [1] | ||||
Acquisition of subsidiaries - net of cash acquired | (169,148) | (23,824) | ||||||
Dividend paid | (92,384) | (13,012) | ||||||
Funds provided by related parties | 41,107 | 5,790 | ||||||
Funds paid back to Relx Inc. | 0 | 0 | (11,174) | [1] | ||||
Cash payments for repurchase of shares | (996,628) | (140,372) | (500,370) | [1] | (127,516) | [1] | ||
Other financing activities | 4,030 | 569 | 640 | [1] | ||||
Net cash generated from/(used in) financing activities | (1,193,216) | (168,061) | (477,270) | [1] | 9,904,121 | [1] | ||
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | 34,340 | 4,836 | 203,100 | [1] | (78,687) | [1] | ||
Net increase/(decrease) in cash, cash equivalents and restricted cash | 1,130,972 | 159,294 | (3,920,381) | [1] | 3,754,666 | [1] | ||
Cash, cash equivalents and restricted cash at the beginning of the year | 1,289,086 | [1] | 181,564 | 5,209,467 | [1] | 1,454,801 | [1] | |
Cash, cash equivalents and restricted cash at the end of the year | 2,420,058 | 340,858 | 1,289,086 | [1] | 5,209,467 | [1] | ||
Including: | ||||||||
Cash and cash equivalents at the end of the year | 2,390,298 | 336,666 | 1,268,512 | [1] | 5,208,967 | [1] | ||
Restricted cash at the end of the year | 29,760 | 4,192 | 20,574 | [1] | 500 | [1] | ||
Supplemental disclosures of cash flow information: | ||||||||
Cash paid for income taxes | 74,844 | 10,542 | 743,528 | [1] | 471,255 | [1] | ||
Cash paid for interest | [1] | 1,402 | ||||||
Non-cash investing and financing activities: | ||||||||
Property, equipment and leasehold improvement financed by other payables | 923 | 130 | 154 | [1] | 2,551 | [1] | ||
Deemed dividend to shareholders in connection with the share-based awards to employees of Relx Inc. | ¥ 396,378 | $ 55,829 | ¥ (80,649) | [1] | ¥ 325,447 | [1] | ||
[1] The Company acquired various companies on December 13, 2023, which was accounted for as an under common control transaction in accordance with ASC 805-50. The Company retrospectively adjusted the above comparative consolidated balance sheets in prior year. Refer The Company acquired various companies on December 13, 2023, which was accounted for as an under common control transaction in accordance with ASC 805-50. The Company retrospectively adjusted the above comparative consolidated statements of comprehensive income in prior years. Refer to Note 1 (e) for detailed information. |
Nature of operations and reorga
Nature of operations and reorganizations | 12 Months Ended |
Dec. 31, 2023 | |
Nature of operations and reorganizations | |
Nature of operations and reorganizations | 1. a) RLX Technology Inc. (the “Company”) is a holding company incorporated in the Cayman Islands. The Company, its subsidiaries, the VIE and VIE’s subsidiaries together are referred to as the “Group”. The Group is primarily engaged in the manufacturing and sales of e-vapor products in the PRC (the “PRC Business”) and overseas markets. b) The Company is an exempted company with limited liability in connection with a group reorganization of Relx Inc. i) First Reorganization The PRC Business was initially carried out by Shenzhen Wuxin Technology Co., Ltd. (“Shenzhen Wuxin”), established on January 2, 2018 (date of inception), and Beijing Wuxin Technology Co., Ltd. (“Beijing Wuxin”), established on February 22, 2018. On May 18, 2018, Beijing Wuxin closed a preferred share financing (the “Domestic PS Financing”) with two investors, Investor A and Investor B. On August 16, 2018, Relx Inc. was incorporated by Ms. Ying (Kate) Wang and Mr. Bing Du under the laws of the Cayman Islands as an exempted company with limited liability. By October 31, 2018, Relx Inc. completed a series of reorganization transactions (the “First Reorganization”) and obtained control over the PRC Business through contractual arrangements. The First Reorganization was completed with the steps described as below: ● Relx Inc. established a directly wholly owned subsidiary Relx HK Limited (“Relx HK”) on August 21, 2018. In October 2018, Relx HK established a wholly foreign-owned subsidiary in China, Beijing Yueke Technology Co., Ltd. (“Beijing Yueke”, or the “WFOE”). ● Beijing Yueke entered into a series of agreements with Beijing Wuxin and its shareholders, through which Beijing Yueke obtained control over Beijing Wuxin and its subsidiaries. Refer to Note 1 (c) VIE arrangements between Relx HK’s PRC subsidiaries for detailed information. ● Relx Inc. issued ordinary shares to Ms. Ying (Kate) Wang and Mr. Bing Du and issued Series Angel Preferred Shares (the “PS Angel”) to Investor A and Investor B, to replace their respective equity interest in Beijing Wuxin. As the shareholdings in Beijing Wuxin and Relx Inc. were with a high degree of common ownership immediately before and after the First Reorganization, the First Reorganization was determined to be a recapitalization transaction of the PRC Business and to lack economic substance, and therefore it was accounted for in a manner similar to a common control transaction. Consequently, the PRC Business’ assets and liabilities are presented on a carryover basis. After the First Reorganization, Relx Inc. completed multiple rounds of preferred shares financing (the “Relx Inc. PS”). Some of the proceeds were given to the Group as operating fund to support the growth of PRC Business, and other funds were used to pay for start-up and other expenses of newly developed operations in non-PRC countries and regions through other subsidiaries of Relx Inc., which are not part of the Group. The operating fund given to the Group were accounted for as an increase to amounts due to related parties, and the fund the Group paid on behalf of the fellow subsidiaries were accounted for as an offset to such amounts due to Relx Inc. 1. b) Reorganizations (Continued) ii) Second Reorganization On September 24, 2020, the Company was established as a wholly owned subsidiary of Relx Inc. Pursuant to a series of agreements entered into on September 25, 2020 and October 19, 2020 (the “Second Reorganization Agreements”), Relx Inc. transferred its 100% equity interests in Relx HK to the Company, upon completion of which, Relx HK became a wholly owned subsidiary of the Company and continues to hold the PRC Business through the same corporate structure in the PRC and the Company newly issued one ordinary share to Relx Inc. on October 19, 2020 (the “Second Reorganization”). Upon incorporation, the Company had 500,000,000 shares authorized, 1 ordinary share issued and outstanding outstanding Immediately before and after the Second Reorganization, the Company, Relx HK and its subsidiaries, the VIE and VIE’s subsidiaries involved in the Second Reorganization are ultimately controlled by Relx Inc. Accordingly, the Second Reorganization is accounted for as a common control transaction and another recapitalization of the PRC Business. Therefore, the accompanying consolidated financial statements of the Company include the assets, liabilities, revenue, expenses and cash flows of the PRC Business for all the periods presented and are prepared as if the corporate structure of the Group after the Second Reorganization had been in existence throughout the periods presented. As of December 31, 2023, major subsidiaries, the VIE and VIE’s subsidiaries of Relx HK, the holding company of the PRC Business, were as follows: Percentage of direct or indirect Place of Date of economic incorporation incorporation ownership Principal activities Subsidiaries Beijing Yueke Technology Co., Ltd. Beijing, China October 25, 2018 100 % Investment holding Shanghai Wuke Information Technology Co., Ltd. (“Shanghai Wuke”) Shanghai, China July 26, 2019 100 % Investment holding Mons Co., Ltd Incheon, South Korea June 1, 2020 100 % Selling e‑vapor products VIE Beijing Wuxin Technology Co., Ltd. Beijing, China February 22, 2018 100 % Investment holding Subsidiaries of VIE Shenzhen Wuxin Technology Co., Ltd. Shenzhen, China January 2, 2018 100 % Selling e‑vapor products, research and development Ningbo Wuxin Information Technology Co., Ltd. (“Ningbo Wuxin”) Ningbo, China October 10, 2018 100 % Selling e‑vapor products 1. b) Reorganizations (Continued) iii) Share splits and waiver of amount due to Relx Inc. On November 25, 2020, the Company issued additional 143,681,555 ordinary shares to Relx Inc. and the total number of ordinary shares issued and outstanding Concurrent with the November 2020 share split, a net amount due to Relx Inc. of RMB600,000, mainly originating from operating funds advanced by Relx Inc., offset by the payments made by the Company on behalf of the non-PRC related parties and the corporate expense allocated to Relx Inc., was waived. The accounting for the waiver was recorded in additional paid-in capital as a contribution to the Group from Relx Inc. and a deduction on the net amount due to Relx Inc. on November 25, 2020. iv) Share distribution On March 26, 2021, the Company announced that Relx Inc. has approved a share distribution pursuant to which Relx Inc. shall distribute its shares in the Company to its shareholders of record on March 26, 2021 (the “Record Date”) in proportion to Relx Inc.’s shareholding structure on the Record Date (the “Share Distribution”). On April 16, 2021, the Share Distribution was completed. Accordingly on April 16, 2021, Relx Holdings Limited owns 618,171,790 Class B ordinary shares of the Company and the other existing shareholders of Relx Inc. owns 952,618,780 Class A ordinary shares of the Company. The Class B ordinary shares then beneficially owned by Relx Holdings Limited represent all of the Company’s issued and outstanding Class B ordinary shares upon the completion of Share Distribution and constitute approximately 39.4% beneficial ownership or 86.6% voting power of the Company’s total issued and outstanding share capital immediately after the completion of Share Distribution. c) As of December 31, 2023, the Company, through the WFOE, entered into the following contractual arrangements with the VIE and its shareholders that enabled the Company to (i) have power to direct the activities that most significantly affect the economic performance of the VIE, and (ii) bear the risks and enjoy the rewards normally associated with ownership of the VIE. Accordingly, the Company is the primary beneficiary of the VIE. Consequently, the financial results of the VIE were included in the Group’s consolidated financial statements. 1. c) VIE arrangements between the Company’s PRC subsidiaries (Continued) Agreements that provide the Company with effective control over the VIE Powers of Attorney Equity Interest Pledge Agreement Agreement that allows the Company to receive economic benefits from the VIE Exclusive Business Cooperation Agreement 1. c) VIE arrangements between the Company’s PRC subsidiaries (Continued) Agreement that provides the Company with the option to purchase the equity interests in the VIE Exclusive Option Agreement Exclusive Assets Option Agreement d) It is possible that the Group’s operations of certain of its businesses through the VIE could be found by the PRC authorities to be in violation of the PRC laws and regulations prohibiting or restricting foreign ownership of companies that engage in such operations and businesses. The National People’s Congress approved the Foreign Investment Law on March 15, 2019 and the State Council approved the Regulation on Implementing the Foreign Investment Law (the “Implementation Regulations”) on December 12, 2019, effective from January 1, 2020. The Supreme People’s Court of China issued a judicial interpretation on the Foreign Investment Law on December 27, 2019, effective from January 1, 2020. The Foreign Investment Law and the Implementation Regulations do not touch upon the relevant concepts and regulatory regimes that were historically suggested for the regulation of VIE structures, and thus this regulatory topic remains unclear under the Foreign Investment Law. There are substantial uncertainties with respect to the implementation and interpretation of the Foreign Investment Law and the Implementation Regulations, and it is also possible that variable interest entities will be deemed as foreign invested enterprises and be subject to restrictions in the future. Such restrictions may cause interruptions to the Group’s operations, products and services and may incur additional compliance cost, which may in turn materially and adversely affect the Group’s business, financial condition and results of operations. 1. Nature of operations and reorganizations (Continued) d) Risks in relation to the VIE structure (Continued) In addition, if the legal structure and contractual arrangements were found to be in violation of any other existing PRC laws and regulations, the PRC government could: ● revoke the business licenses and/or operating licenses of such entities; ● impose fines on the Group; ● confiscate any of the Group’s income that they deem to be obtained through illegal operations; ● discontinue or placing restrictions or onerous conditions on the operations of the consolidated VIE; ● place restrictions on the Group’s right to collect revenues; ● shut down the Group’s servers or block the Group’s app/websites; ● require the Group to restructure the ownership structure or operations; ● require the nullification of the contractual arrangements between the WFOE, the consolidated VIE and its shareholders; ● restrict or prohibit the Group’s use of the proceeds from the offering or listing or other of the Group’s capital raising activities to fund the business and operations of the consolidated VIE; or ● take other regulatory or enforcement actions that could be harmful to the Group’s business. The imposition of any of these penalties may result in a material and adverse effect on the Group’s ability to conduct the Group’s businesses. In addition, if the imposition of any of these penalties causes the Group to lose the right to direct the activities of any of the VIE (through its equity interests in its subsidiaries) or the right to receive their economic benefits, the Group will no longer be able to consolidate the relevant VIE and its subsidiaries, if any. In the opinion of management, the likelihood of loss in respect of the Group’s current ownership structure or the contractual arrangements with the VIE is remote. There is no VIE for which the Group has variable interests but is not the primary beneficiary. 1. Nature of operations and reorganizations (Continued) d) Risks in relation to the VIE structure (Continued) The following consolidated financial information of the VIE and its subsidiaries taken as a whole as of December 31, 2022 and 2023 and for the years ended December 31, 2021, 2022 and 2023 was included in the consolidated financial statements of the Group as follows: As of December 31, 2022 2023 RMB RMB Current assets Cash and cash equivalents 956,918 927,097 Restricted cash 20,574 29,718 Short-term bank deposits, net 130,000 99,996 Receivables from online payment platforms 2,817 5,398 Short-term investments, net 2,434,864 2,148,719 Accounts and notes receivable, net 50,259 20,490 Inventories 130,122 72,468 Amounts due from group companies 98,515 129,214 Amounts due from related parties 5,112 102,661 Prepayments and other current assets, net 80,267 112,575 Total current assets 3,909,448 3,648,336 Non ‑ current assets Property, equipment and leasehold improvement, net 75,780 52,102 Intangible assets, net 4,718 53,672 Long-term investments, net 8,000 8,000 Deferred tax assets, net 54,736 42,808 Right-of-use assets, net 57,261 42,529 Long-term bank deposits, net 1,167,325 1,398,376 Other non-current assets, net 10,871 2,599 Total non-current assets 1,378,691 1,600,086 Total assets 5,288,139 5,248,422 Current liabilities Accounts and notes payable 268,761 224,383 Contract liabilities 3,829 11,319 Salary and welfare benefits payable 53,438 19,519 Taxes payable 93,700 36,932 Accrued expenses and other current liabilities 132,762 95,125 Amounts due to group companies 261,729 275,376 Amounts due to related parties 423 — Lease liabilities - current portion 36,905 25,422 Total current liabilities 851,547 688,076 Non-current liabilities Deferred tax liabilities 8,653 7,695 Lease liabilities - non-current portion 30,593 18,092 Total non-current liabilities 39,246 25,787 Total liabilities 890,793 713,863 1. Nature of operations and reorganizations (Continued) d) Risks in relation to the VIE structure (Continued) For the year ended December 31, 2021 December 31, 2022 December 31, 2023 RMB RMB RMB Third-party revenues 8,520,978 5,330,992 1,338,746 Inter-group revenues (i) — 4,533 15,937 Third-party cost of revenues (4,848,190) (2,965,169) (664,660) Inter-group cost of revenues (ii) — (144) (1,268) Excise tax on products — (52,668) (342,354) Third-party operating expenses (1,182,492) (713,520) (484,994) Inter-group operating expenses (iii) (122,568) (459,549) (237,664) Other (expenses)/income (367,311) 132,736 220,220 Net income/(loss) 2,000,417 1,277,211 (156,037) (i) Starting from 2022, the consolidated VIE and its subsidiaries provide operation services to entities within the Group. The inter-group service revenue is eliminated at the consolidated level. (ii) Starting from 2022, the entities within the Group sell products to the consolidated VIE. The inter-group cost of revenues is eliminated at the consolidated level. (iii) The subsidiaries of the Group and the primary beneficiary of the consolidated VIE provide operation supporting services to the consolidated VIE and its subsidiaries. The inter-group service charge is eliminated at the consolidation level. For the year ended December 31, 2021 December 31, 2022 December 31, 2023 RMB RMB RMB Net cash used in operating activities with group company — (512,685) (210,479) Other operating activities 1,842,887 641,865 202,414 Net cash generated from/(used in) operating activities 1,842,887 129,180 (8,065) Loans to group companies (96,058) (450,769) (80,805) Repayment of loans from group companies 191,620 342,000 61,590 Other investing activities (2,755,324) 343,317 53,451 Net cash (used in)/generated from investing activities (2,659,762) 234,548 34,236 Borrowings under loans from group companies — 390,358 543,912 Repayment of borrowings under loans from group companies — (164,408) (590,760) Other financing activities (10,785) (763) — Net cash (used in)/generated from financing activities (10,785) 225,187 (46,848) 1. Nature of operations and reorganizations (Continued) d) Risks in relation to the VIE structure (Continued) The above includes intercompany balances and transactions which have been eliminated on the Company’s consolidated financial statements. Under the contractual arrangements with the VIE and through its equity interests in its subsidiaries, the Group has the power to direct the activities of the VIE and the VIE’s subsidiaries and the transfer of assets out of the VIE and the VIE’s subsidiaries. Therefore, the VIE assets are considered to be fully available to the Company. As the consolidated VIE and VIE’s subsidiaries are incorporated as limited liability companies under the PRC Company Law, the creditors of the liabilities of the consolidated VIE and the VIE’s subsidiaries do not have recourse to the general credit of the Company. e) Business combination In December 2023, to facilitate on international expansion, the Group acquired from its related parties 100% equity interest of certain e-vapor related businesses, including SS North Asia Holding Limited and its consolidated subsidiaries (“SS North Asia”), Sunnyheart HK Limited and its consolidated subsidiaries (“Sunnyheart”) and Relx Indonesia Holding Inc. and its consolidated subsidiaries (“Relx Indonesia”), for purchase prices in cash totaling RMB173,274 (US$24,362). Each of the acquired businesses is primarily engaged in the sales of e-vapor products in its home country, located in North Asia and Southeast Asia, respectively. As the Company and the acquired companies were under common control by Ms. Ying (Kate) Wang both before and after the closing of the transactions, in accordance with ASC 805-50, the acquisitions were accounted for as business combination under common control. The purchase prices in excess of the former parent’s basis of the transferred businesses were recorded as deemed distribution to the shareholders. The results of operations of the acquired businesses have been included in the Group’s consolidated financial statements retrospectively throughout the periods presented at historical carrying values as if the combination had been in effect since the inception of common control. The footnote disclosures to these consolidated financial statements have also been retrospectively adjusted, as applicable. |
Significant accounting policies
Significant accounting policies | 12 Months Ended |
Dec. 31, 2023 | |
Significant accounting policies | |
Significant accounting policies | 2. a) The consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) to reflect the financial position, results of operations and cash flows of the Group. On December 13, 2023, because of the Group’s acquisition of SS North Asia, Sunnyheart and Relx Indonesia, which are under common control by Ms. Ying (Kate) Wang (Note 1(e)), the Group’s consolidated financial statements as of December 31, 2022 and 2023, and for the years ended December 31, 2021, 2022 and 2023 incorporated the results of operations of the acquired companies as if they had been consolidated from the date when it first came under the control of Ms. Ying (Kate) Wang. The Group’s consolidated financial statements as of December 31, 2022, and for the years ended December 31, 2021 and 2022 have been retrospectively adjusted. Significant accounting policies followed by the Group in the preparation of the accompanying consolidated financial statements are summarized below. b) The Group’s consolidated financial statements include the financial statements of the Company, its subsidiaries, the VIE and VIE’s subsidiaries for which the Company or its subsidiary is the primary beneficiary. Results of the entities and businesses acquired from the seller controlled by Ms. Ying (Kate) Wang are consolidated from the date when the acquired companies first came under the control of Ms. Ying (Kate) Wang, regardless of the date of the common control acquisition. A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power, has the power to appoint or remove the majority of the members of the board of directors, to cast a majority of votes at the meeting of directors or has the power to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders. A consolidated VIE is an entity in which the Company, or its subsidiary, through contractual arrangements, has the power to direct the activities that most significantly impact the entity’s economic performance, bears the risks of and enjoys the rewards normally associated with ownership of the entity, and therefore the Company or its subsidiary is the primary beneficiary of the entity. All transactions and balances among the Company, its subsidiaries, the VIE and VIE’s subsidiaries have been eliminated upon consolidation. For the Company’s consolidated subsidiaries and VIEs, non-controlling interests are recognized to reflect the portion of their equity that is not attributable, directly or indirectly, to the Company as the controlling shareholder. Non-controlling interests are classified as a separate line item in the equity section of the Group’s consolidated balance sheets and have been separately disclosed in the Group’s consolidated statements of operations and comprehensive income to distinguish the interests from that of the Company. 2. c) The preparation of the Group’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the balance sheet date and reported revenues and expenses during the reported periods in the consolidated financial statements and accompanying notes. Significant accounting estimates reflected in the Group’s consolidated financial statements mainly include, but are not limited to, valuation and recognition of share-based compensation and inventories write-downs. Actual results could differ from those estimates, and such differences may be material to the consolidated financial statements. d) The Group uses Renminbi (“RMB”) as its reporting currency. The functional currency of the Company and its overseas subsidiaries incorporated in Cayman Islands, BVI, and Hong Kong is United States dollars (“US$”). The functional currency of the Group’s PRC entities is RMB. The Group’s entities in other jurisdictions generally use their respective local currencies as their functional currencies. The determination of the functional currency is based on the criteria of ASC Topic 830, Foreign Currency Matters In the consolidated financial statements, the financial information of the Company and other entities located outside of the PRC have been translated into RMB. Assets and liabilities are translated at the exchange rates on the balance sheet date. Equity amounts other than earnings generated in current period are translated at historical exchange rates. Revenues, expenses, gains and losses are translated using the average rate for the period. Translation adjustments are reported as foreign currency translation adjustments and shown as a component of other comprehensive (loss)/income in the consolidated statements of comprehensive income. Foreign currency transactions denominated in currencies other than the functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency using the applicable exchange rates at the balance sheet dates. Net gains and losses resulting from foreign exchange transactions are included in others, net in the consolidated statements of comprehensive income. e) Convenience translation Translations of the consolidated balance sheets, consolidated statements of comprehensive income and consolidated statements of cash flows from RMB into US$ as of and for the year ended December 31, 2023 are solely for the convenience of the reader and were calculated at the noon buying rate of US$1.00 = RMB7.0999 on December 29, 2023 as set forth in the H.10 statistical release of the U.S. Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate or at any other rate. 2. f) Fair value reflects the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. The Group applies a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Accounting guidance establishes three levels of inputs that may be used to measure fair value: ● Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. ● Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical asset or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. ● Level 3 applies to asset or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. Refer to Note 23 for additional information. g) Cash and cash equivalents mainly represent cash at bank, demand deposits which are unrestricted as to withdrawal or use, and which have original maturities of three months or less and are readily convertible to known amount of cash. h) Cash that is legally restricted as to withdrawal or for use or pledged as security is reported separately on the face of the Group’s consolidated balance sheets. In November 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, (“ASU 2016-18”) The Group’s restricted cash mainly represents security deposits held in designated bank accounts for issuance of bank acceptance notes relating to notes payable. i) Bank deposits Short-term bank deposits, net Short-term bank deposits are time deposits with original maturities of longer than three months but less than one year or the long-term bank deposits with a maturity date within one year. Interest earned is recorded as interest income, net in the consolidated statements of comprehensive income during the years presented. Long-term bank deposits, net Long-term bank deposits represent time deposits placed with banks with original maturities more than one year. And those matured within one year are reclassified to short-term bank deposits, net. The Group accounts for the bank deposits at amortized cost less allowance for credit losses. 2. j) Short-term investments, net include debt-classified securities held by the Group with maturities less than one year. Long-term investment securities, net include debt-classified securities held by the Group with maturities more than one year. The Group classifies the investment securities as held-to-maturity or available-for-sale, whose classification determines the respective accounting methods stipulated by ASC 320. Held-to-maturity debt securities include debt instruments with fixed interest rates issued by financial institutions for which the Group has the positive intent and ability to hold those securities to maturity. The Group accounts for the held-to-maturity debt securities at amortized cost less allowance for credit losses. Available-for-sale debt securities include debt instruments with a variable interest rate indexed to the performance of underlying assets, which are reported at fair value, with changes in fair values reflected in other comprehensive (loss)/income in the consolidated statements of comprehensive income. Fair value is estimated based on quoted prices of similar products provided by financial institutions at the end of each reporting period. The Group classifies these inputs as Level 2 fair value measurement. For certain investments in financial instruments with a variable interest rate indexed to the performance of underlying assets, the Group elects the fair value option at the date of initial recognition and carries these investments subsequently at fair value. Changes in fair values are reflected in investment income in the consolidated statements of comprehensive income. Fair value is estimated based on quoted prices of similar products provided by financial institutions at the end of each reporting period. The Group classifies these inputs as Level 2 fair value measurement. The allowance for credit losses on available-for-sale debt securities is accounted for in accordance with ASC 326. At each reporting period, available-for-sale debt securities are evaluated at the individual security level to determine whether there is a decline in the fair value below its amortized cost basis (an impairment). In circumstances where the Group intends to sell, or is more likely than not required to sell, the security before it recovers its amortized cost basis, the difference between fair value and amortized cost is recognized as a loss in the consolidated statements of comprehensive income, with a corresponding write-down of the security’s amortized cost. In circumstances where neither condition exists, the Group then evaluates whether a decline is due to credit-related factors. The factors considered in determining whether a credit loss exists can include the extent to which fair value is less than the amortized cost basis, changes in the credit quality of the underlying loan obligors, credit ratings actions, as well as other factors. To determine the portion of a decline in fair value that is credit-related, the Group compares the present value of the expected cash flows of the security discounted at the security’s effective interest rate to the amortized cost basis of the security. A credit-related impairment is limited to the difference between fair value and amortized cost, and recognized as an allowance for credit loss on the consolidated balance sheets with a corresponding adjustment to net income. Any remaining decline in fair value that is non-credit related is recognized in other comprehensive (loss)/income, net of tax. Improvements in expected cash flows due to improvements in credit are recognized through reversal of the credit loss and corresponding reduction in the allowance for credit loss. Interest earned for both held-to-maturity and available-for-sale long-term investment securities is recorded as interest income, net in the consolidated statements of comprehensive income during the years presented. Long-term investments, net The Group elects to record an equity investment without readily determinable fair values and not accounted for by the equity method at its cost less impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer (“measurement alternative”). As of December 31, 2023, the Group’s long-term investments consist of investments in privately held companies which do not have readily determinable fair values and therefore the Group recognized these investments at cost adjusted for changes from observable transactions for identical or similar investments of the same investee, less impairment. 2. j) The Group regularly evaluates the long-term investments for impairment based on performance and financial position of the investees as well as other evidence of market value for each reporting period. Such evaluation includes, but not limited to, reviewing the investees’ cash position, recent financing, projected and historical financial performance, cash flow forecasts and financing needs. An impairment loss is recognized in others, net in the consolidated statements of comprehensive income equal to the excess of the investment’s carrying value over its fair value. The impairment on long-term investments for the years ended December 31, 2021, 2022 and 2023 was nil, RMB4,000 and nil. k) Accounts and notes receivable are recognized and carried at the original invoiced amount less an allowance for credit losses. The Group maintains an allowance for credit losses in accordance with ASC 326 and records the allowance for credit losses as an offset to accounts and notes receivable. Expected credit losses of RMB141, RMB201 and RMB2,884 were recorded as general and administrative expenses in the consolidated statements of comprehensive income for the years ended December 31, 2021, 2022 and 2023. Refer to Note 2(ah) “Allowance for credit losses” for additional information about adoption of ASC 326. l) Inventories of the Group consist of raw materials and finished goods. Inventories are stated at the lower of cost or net realizable value. Cost is determined using the weighted average method. Inventories write-downs are made for excessive, slow moving, expired and obsolete inventories as well as for inventories with carrying values in excess of net realizable value. Certain factors could impact the realizable value of inventory, so the Group continually evaluates the recoverability based on assumptions about customer demand and market conditions. The evaluation may take into consideration of historical usage, expiration date, expected demand, anticipated sales price, new product development schedules, product obsolescence, customer concentrations and other factors. Inventories write-downs are recorded in cost of revenue in the consolidated statements of comprehensive income. m) Property, equipment and leasehold improvement are stated at cost less accumulated depreciation and impairment, if any. Except for land, which is not depreciated, depreciation of other items of property, equipment and leasehold improvement is computed using the straight-line method over the following estimated useful lives: Category Estimated useful lives Electronic equipment 3-5 years Furniture and office equipment 3-5 years Machinery and equipment 2-10 years Transportation equipment 5 years Office building 40 years Leasehold improvement The shorter of the term of the lease or the estimated useful lives of the assets Expenditures for maintenance and repairs are expensed as incurred, whereas the costs of renewals and betterment that extend the useful lives of property, equipment and leasehold improvement are capitalized as additions to the related assets. The gain or loss on the disposal of property, equipment and leasehold improvement is the difference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in others, net in the consolidated statements of comprehensive income. 2. Significant accounting policies (Continued) n) Intangible assets mainly include purchased intangible assets and those acquired through a business combination under common control (refer to Note 1(e)). Intangible assets purchased from third parties mainly consist of license of copyright, software and trademark. Identifiable intangible assets are carried at acquisition cost less accumulated amortization and impairment loss, if any. Intangible assets acquired in a business combination under common control, mainly consisting of brands and channel relations, were recognized at the carrying amount recorded by the former parent of the entities under common control. Finite-lived intangible assets are tested for impairment if impairment indicators arise. Amortization of finite-lived intangible assets is computed using the straight-line method over their estimated useful lives, which are as follows: Category Estimated useful lives License of copyright 2 years Purchased software 2-3 years Trademark 2 years Brands 10 years Channel relations 6 years o) Goodwill represents the excess of the purchase price over the amounts assigned to the fair value of the identifiable assets acquired and the liabilities assumed of an acquired business. Goodwill of the Group was arisen from a business combination under common control (refer to Note 1 (e)), and recognized at the historical cost recorded by the former parent of the entities under common control. In accordance with ASC 350, Intangibles-Goodwill and Other, recorded goodwill amounts are not amortized, but rather are tested for impairment annually or more frequently at the reporting unit level if there are indicators of impairment present. Under ASC 350-20-35, the Group has the option to assess qualitative factors first to determine whether it is necessary to perform the quantitative impairment test. In the qualitative assessment, the Group considers primary factors such as industry and market considerations, the overall financial performance of the reporting unit, and other specific information related to the operations. If the Group determines, as a result of the qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit is less than the carrying amount, the quantitative impairment test is required. Otherwise, no further testing is required. The quantitative impairment test compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit is greater than zero and its fair value exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. If the carrying value of the reporting unit, including goodwill, exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, but limited to the total amount of goodwill allocated to that reporting unit. Based on an assessment of the qualitative factors, the Group determined that it is more-likely-than-not that the fair value of its reporting unit is in excess of its carrying amount as of December 31, 2023. Therefore, no impairment loss was recorded for the year ended December 31, 2023 (2022: nil). p) Long-lived assets are evaluated for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be fully recoverable or that the useful life is shorter than the Group had originally estimated. When these events occur, the Group evaluates the impairment for the long-lived assets by comparing the carrying value of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying value of the assets, the Group recognizes an impairment loss based on the excess of the carrying value of the assets over the fair value of the assets. Impairment charge of nil, RMB42,529 and RMB5,080 was recognized for the years ended December 31, 2021, 2022 and 2023. 2. Significant accounting policies (Continued) q) The Group leases office space, warehouses, stores, dormitories and office equipment for fixed periods ranging from 1 month to 60.5 months, some of which have extension options. Extension options are not recognized by the Group in the determination of lease liabilities unless renewals are reasonably certain. The Group has elected the short-term lease measurement and recognition exemption. The Group recognizes lease payments for its short-term lease on a straight-line basis over the lease term and reassesses the extension options of them to be qualify for the short-term lease measurement. As of December 31, 2022 and 2023, all the Group’s leases are classified as operating leases. For operating leases, the lease liability is initially and subsequently measured at the present value of the unpaid lease payments at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred less any lease incentives received. Costs associated with operating lease assets are recognized on a straight-line basis within operating expenses over the term of the lease. In determining the present value of the unpaid lease payments, ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. As most of the Group’s leases do not provide an implicit rate, the Group uses its incremental borrowing rate as the discount rate for the lease. The Group’s incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments. r) The Group follows five steps for revenue recognition: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Group’s revenues are primarily derived from sales of the Group’s products to offline distributors who are responsible for sales to retailers and end users. Refer to Note 18 to the consolidated financial statements for disaggregation of the Group’s revenue for the years ended December 31, 2021, 2022 and 2023. Sale of products to offline distributors Under the distribution agreements, the offline distributors purchase products from the Group, take delivery and are responsible for commercial distribution and offline terminal sales to retailers and end users in authorized distribution areas. After taking control of the products, the offline distributor is responsible for carrying out direct interactions with retailers and end users, delivering the products and providing customer support. Based on these indicators, the Group determined the offline distributors (as opposed to the end users) to be its customers according to ASC 606-10-55-39. The Group has also entered into rebate agreements with offline distributors in order to incentivize the offline distributors to increase their purchases from the Group. The sales rebates are usually calculated as a percentage of the purchase amount, which is accounted for as variable consideration according to ASC 606-10-32-5. In addition, the Group provides cash subsidy to offline distributors for promotional activities in the form of rebate. The amount of subsidy is based on a certain percentage of the cost of specific promotional activities, which varies from activity to activity. These subsidies are payable to the Group’s customers. The Group determined the subsidy should be recorded as a reduction of revenue, according to ASC 606-10-32-25. Accordingly, the Group recognizes revenue from sales to offline distributors upon delivery of the products to offline distributors’ warehouses in an amount equal to the contract sales prices, less applicable allowances for estimated sales rebates and approved subsidies. 2. r) Starting from 2022, the Group sells the product to the offline distributors with Tobacco Monopoly License (“licensed offline distributors”) for products sold in China. The licensed offline distributors make full payment to the Group after receiving the product, the payment period is approximately one month. According to the agreements between the Group and the licensed offline distributors, the licensed offline distributors took control of the products upon receipt but was entitled to certain rights of return and price concession after receipt of products. The Group made estimation for sales returns and price concession based on contract terms and historical patterns. The Group determined the sales return and price concession should be recorded as a reduction of revenue, according to ASC606-10-55-23. Accordingly, the Group recognized revenue from licensed offline distributors upon delivery of the products to licensed offline distributors’ warehouses in an amount equal to the contract sales prices, less applicable allowances for estimated of sales return and price concession. Others For direct sales through offline stores operated by the Group, the Group recognized revenues when goods are delivered to the end users. Contract balances A receivable is recorded when the Group has an unconditional right to consideration. A right to consideration is unconditional if only the passage of time is required before payment of that consideration is due. A contract asset is recorded when the Group has transferred products to the customer before payment is received or is due, and the Group’s right to consideration is conditional on future performance or other factors in the contract. No contract asset was recorded as of December 31, 2022 and 2023. Contract liabilities are recognized if the Group receives consideration in advance of performance, which is mainly in relation to the orders unshipped, where there is still an obligation to be fulfilled by the Group. The contract liabilities will be recognized as revenue when all of the revenue recognition criteria are met. All contract liability balances at the beginning of the years 2021, 2022 and 2023 were recognized as revenue for the years ended December 31, 2021, 2022 and 2023 due to generally short-term duration of contracts. For the years ended December 31, 2021, 2022 and 2023, the Group did not have any revenue recognized from performance obligations satisfied (or partially satisfied) in previous years. Practical Expedients The transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied has not been disclosed, as substantially all the Group’s contracts have a duration of one year or less. Payment terms with licensed offline distributors generally require settlement within 30 days or less. The Group has determined that its contracts generally do not include a significant financing component. s) Cost of revenues consists primarily of consignment manufacturing costs, material costs, inventories write-downs and depreciation of the machinery and equipment used on production lines, as well as related costs that are directly attributable to the production of products. 2. t) Excise taxes of the Group consist of excise tax imposed on manufacturers of e-cigarettes in China. In October 2022, the Ministry of Finance of the People’s Republic of China, General Administration of Customs of the People’s Republic of China, and State Taxation Administration of the People’s Republic of China jointly issued the Announcement on Imposing Excise Tax on E-cigarettes, pursuant to which e-cigarette manufacturers are subject to excise tax at the rate of 36% on the production or import of e-cigarettes. The excise taxes of the Group are reported on a gross basis and recognized in excise tax on products in the consolidated statements of comprehensive income. u) The Group provides product warranty on all e-vapor products sold based on the contracts with its customers at the time of sale of products. The Group accrues a warranty reserve for the products sold, which includes the best estimate of defective rate and projected costs to repair or replace items under warranty. These estimates are primarily based on the estimates of the nature, frequency and average costs of future claims. The warranty reserve is included within the accrued expenses and other current liabilities in the consolidated balance sheets. Warranty cost is recorded as a component of cost of sales in the consolidated statements of comprehensive income. The Group reevaluates the adequacy of the warranty accrual on a regular basis. v) Research and development expenses primarily consist of salaries, welfare benefits and share-based compensation expenses for research and development personnel as well as material expenses and depreciation of equipment associated with research and development activities. Costs incurred for the preliminary project stage of internal use software are expensed in research and development expenses when incurred. Costs incurred during the application development stage are capitalized when certain criteria are met as stated in ASC 350-40 “Internal-use Software” w) Selling expenses primarily consist of advertising expenses, salaries, welfare benefits and shared-based compensation expenses for sales personnel, and shipping expenses. The advertising expenses amounted to RMB192,541, RMB57,954 and RMB31,899 for the years ended December 31, 2021, 2022 and 2023, respectively. The shipping expenses amounted to RMB67,632, RMB40,710 and RMB8,925 for the years ended December 31, 2021, 2022 and 2023, respectively. x) General and administrative expenses primarily consist of salaries, welfare benefits and share-based compensation expenses for general and administrative personnel and professional service fees. y) Subsidy income represents cash subsidies received from the PRC local government by the Group. Such amounts are recognized in others, net in the consolidated statements of comprehensive income upon receipt. The Group recorded RMB197,311, RMB338,112 and RMB124,480 of subsidy income for the years ended December 31, 2021, 2022 and 2023, respectively. 2. z) Share-based compensation All share-based awards granted to directors, executive officers, employees, consultants and nonemployees who provide services to Relx Inc., including restricted ordinary shares, restricted share units and share options, are measured at fair value on grant date and are classified as equity awards in accordance with ASC 718 — “Compensation-Stock Compensation”. The Group early adopted ASU 2018-07, “Compensation-Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting” on January 2, 2018 (date of inception) to account for share-based payments for acquiring goods and services from nonemployees at grant date fair value. For all share-based awards granted with service conditions that have a graded vesting schedule, share-based compensation expenses are recognized using the straight-line method, over the requisite service period. The Gro |
Cash and cash equivalents
Cash and cash equivalents | 12 Months Ended |
Dec. 31, 2023 | |
Cash and cash equivalents | |
Cash and cash equivalents | 3. Cash and cash equivalents represent cash at bank and demand deposits placed with banks which have original maturities of three months or less and are readily convertible to known amount of cash. The balance of cash and cash equivalents as of December 31, 2022 and 2023 primarily consist of the following: As of December 31, 2022 (As adjusted) 2023 RMB RMB Short‑term bank deposits with initial terms within three months 52,767 155,819 Cash at bank 1,215,745 2,234,479 Cash and cash equivalents 1,268,512 2,390,298 |
Bank deposits, net
Bank deposits, net | 12 Months Ended |
Dec. 31, 2023 | |
Bank deposits, net | |
Bank deposits, net | 4. As of December 31, 2022 (As adjusted) 2023 RMB RMB Short-term bank deposits, net 7,084,879 2,631,256 Long-term bank deposits, net 1,515,428 1,757,804 Total (i) 8,600,307 4,389,060 (i) Bank deposits of RMB154,922 and nil were held as collateral for the Group’s notes payable as of December 31, 2022 and 2023 (Note 14). The allowance for credit losses recorded in bank deposits as of December 31, 2022 and 2023 were RMB5,559 and RMB2,408. |
Investment securities
Investment securities | 12 Months Ended |
Dec. 31, 2023 | |
Investment securities | |
Investment securities | 5. As of December 31, 2022 (As adjusted) 2023 RMB RMB Short-term investments_ Fair value option 2,434,864 2,183,862 Short-term investments, net_ Available-for-sale — 561,940 Short-term investments, net_ Held-to-maturity — 347,331 Long-term investment securities, net_ Held-to-maturity 2,851,966 5,236,109 Long-term investment securities, net_ Available-for-sale 557,492 — Total 5,844,322 8,329,242 The allowance for credit losses recorded in investment securities as of December 31, 2022 and 2023 were RMB3,739 and RMB5,213. |
Accounts and notes receivable,
Accounts and notes receivable, net | 12 Months Ended |
Dec. 31, 2023 | |
Accounts and notes receivable, net | |
Accounts and notes receivable, net | 6. As of December 31, 2022 (As adjusted) 2023 RMB RMB Accounts receivable 51,582 63,508 Allowance for doubtful accounts (201) (3,026) Accounts and notes receivable, net 51,381 60,482 |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2023 | |
Inventories | |
Inventories | 7. Inventories are consisted of the following: As of December 31, 2022 (As adjusted) 2023 RMB RMB Finished goods 123,672 117,665 Raw materials 7,229 27,185 Inventories 130,901 144,850 For the years ended December 31, 2021, 2022 and 2023, write-downs of inventories to net realizable value amounted to RMB89,071, RMB179,694 and RMB35,695, respectively, were recognized in cost of sales. |
Prepayments and other current a
Prepayments and other current assets, net | 12 Months Ended |
Dec. 31, 2023 | |
Prepayments and other current assets, net | |
Prepayments and other current assets, net | 8. The following is a summary of prepayments and other current assets: As of December 31, 2022 2023 (As adjusted) RMB RMB Value Added Tax (“VAT”) recoverable 38,974 28,597 Prepaid service fees and selling expenses 9,000 7,842 Prepayments to suppliers 4,054 2,700 Deferred charges 452 1,321 Deposits for rental 13,216 11,669 Interest receivable 95,204 446,528 Receivable from financial institution 35,241 1,511 Others 20,893 20,027 Prepayments and other current assets 217,034 520,195 Less: allowance for credit losses (i) (18,102) (11,760) Prepayments and other current assets, net 198,932 508,435 (i) The allowance for credit losses recorded as of December 31, 2022 and 2023 were RMB18,102 and RMB11,760. The movement in the allowance for credit losses were as follow: 2022 2023 (As adjusted) RMB RMB Balance as of January 1 154 18,102 Write-off — (6,862) Amounts charged to expenses 17,948 520 Balance as of December 31 18,102 11,760 |
Property, equipment and leaseho
Property, equipment and leasehold improvement, net | 12 Months Ended |
Dec. 31, 2023 | |
Property, equipment and leasehold improvement, net | |
Property, equipment and leasehold improvement, net | 9. The following is a summary of property, equipment and leasehold improvement, net: As of December 31, 2022 2023 (As adjusted) RMB RMB Leasehold improvement 94,336 97,509 Machinery and equipment 121,547 123,142 Land — 8,376 Office building — 8,328 Furniture and office equipment 7,289 6,746 Electronic equipment 2,149 1,809 Transportation equipment 871 1,349 Total property, equipment and leasehold improvement 226,192 247,259 Less: accumulated depreciation (122,033) (154,656) Less: accumulated impairment (16,288) (15,245) Property, equipment and leasehold improvement, net 87,871 77,358 Depreciation expenses were RMB40,865, RMB76,041 and RMB37,622 for the years ended December 31, 2021, 2022 and 2023, respectively. The Group recorded nil, RMB28,561 and RMB5,008 impairment losses for the years ended December 31, 2021, 2022 and 2023, respectively. |
Intangible assets, net
Intangible assets, net | 12 Months Ended |
Dec. 31, 2023 | |
Intangible assets, net | |
Intangible assets, net | 10. The following table summarizes the Group’s intangible assets, net: As of December 31, 2022 2023 (As adjusted) RMB RMB License of copyright 3,530 4,098 Purchased software 19,115 23,264 Trademark 567 44 Brands (i) — 34,522 Channel relations (i) — 32,430 Total intangible assets 23,212 94,358 Less: accumulated amortization (14,283) (23,203) Less: accumulated impairment (1,377) (1,377) Intangible assets, net 7,552 69,778 (i) The brands and channel relations were transferred from SS North Asia as a result of a business combination under common control (refer to Note 1 (e)), and recognized at the historical cost recorded by the former parent of SS North Asia in accordance with ASC 805-50. Amortization expenses for the years ended December 31, 2021, 2022 and 2023 were RMB4,774, RMB5,367 and RMB8,892, respectively. The Group recorded nil, RMB1,377 and nil impairment losses for the years ended December 31, 2021, 2022 and 2023, respectively. The estimated amortization expenses for each of next five years and thereafter is as follows as follows: Amortization expense of intangible assets RMB 2024 12,885 2025 10,368 2026 9,465 2027 8,858 2028 8,858 Thereafter 19,344 |
Long-term investments, net
Long-term investments, net | 12 Months Ended |
Dec. 31, 2023 | |
Long-term investments, net. | |
Long-term investments, net | 11. The following sets forth the summary of the Group’s long-term investments: As of December 31, 2022 2023 (As adjusted) RMB RMB Measurement alternative investments: Investee A 1,000 1,000 Investee B 4,000 4,000 Investee C 8,000 8,000 Total measurement alternative investments 13,000 13,000 Less: impairment (5,000) (5,000) Long-term investments, net 8,000 8,000 11. In July 2019, the Group acquired 13.34% equity interests of investee A and 20.00% equity interests of investee B for cash consideration of RMB1,000 and RMB4,000, respectively. In March 2021, the Group acquired 5.00% equity interests of investee C for cash consideration of RMB8,000. The investments are accounted for under measurement alternative according to ASU 2016-01 as the shares held by the Company were not considered as in-substance common stock and the shares do not have readily determinable fair value. The Group recognized impairment loss of nil, RMB4,000 and nil for the years ended December 31, 2021, 2022 and 2023, respectively. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill. | |
Goodwill | 12. Goodwill The changes in the carrying amount of goodwill were as follows: As of December 31, 2022 (As adjusted) 2023 RMB RMB Balance as of January 1 — — Addition (i) — 66,506 Balance as of December 31 — 66,506 (i) The goodwill was transferred from SS North Asia as a result of a business combination under common control (refer to Note 1 (e)), and recognized at the historical cost recorded by the former parent of SS North Asia in accordance with ASC 805-50. No impairment charge was recognized for the years ended December 31, 2021, 2022 and 2023, respectively. |
Other non-current assets, net
Other non-current assets, net | 12 Months Ended |
Dec. 31, 2023 | |
Other non-current assets, net | |
Other non-current assets, net | 13. The following is a summary of other non-current assets as of December 31, 2022 and 2023: As of December 31, 2022 2023 (As adjusted) RMB RMB Prepayments on long‑term assets 13,398 6,717 Deposits for rental 6,423 4,183 Other non ‑ current assets 19,821 10,900 Less: impairment (i) (6,363) (6,026) Other non ‑ current assets, net 13,458 4,874 (i) The Group recorded nil, RMB12,591 and RMB72 impairment losses for the years ended December 31, 2021, 2022 and 2023, respectively. |
Accounts and notes payable
Accounts and notes payable | 12 Months Ended |
Dec. 31, 2023 | |
Accounts and notes payable | |
Accounts and notes payable | 14. The Group measures accounts payable and notes payable at amortized cost considering they are arising from transactions with suppliers in the normal course of business and are due in customary trade terms not exceeding one year. Accounts and notes payable consist of the following: As of December 31, 2022 2023 (As adjusted) RMB RMB Accounts payable 52,493 109,410 Notes payable (i) 216,853 157,016 Total accounts and notes payable 269,346 266,426 (i) The Group’s notes payable mainly include short-term notes, typically with terms of 91 to 92 days which are provided to the Group’s suppliers and manufacturers. Notes payable as of December 31, 2022 were secured by restricted cash of RMB18,579 and long-term bank deposits of RMB154,922 held in commercial banks. Notes payable as of December 31, 2023 were secured by restricted cash of RMB26,436 held in commercial banks. |
Accrued expenses and other curr
Accrued expenses and other current liabilities | 12 Months Ended |
Dec. 31, 2023 | |
Accrued expenses and other current liabilities | |
Accrued expenses and other current liabilities | 15. Accrued expenses and other current liabilities The following is a summary of accrued expenses and other current liabilities as of December 31, 2022 and 2023: As of December 31, 2022 2023 (As adjusted) RMB RMB Deposits from offline distributors, retailers and others 11,017 9,427 Professional service fee payables 15,154 18,194 Product warranty (i) 5,051 3,208 Payables on equipment 7,020 1,575 Patent application fee payables 1,508 — Accrued liabilities to suppliers 72,909 44,140 Payable related to employees’ exercise of share-based awards 20,509 3,168 Payable related to termination of lease contracts 6,191 — Others 22,096 24,284 Accrued expenses and other current liabilities 161,455 103,996 (i) Product warranty activities were as follows: Product warranty RMB Balance as of January 1, 2022 (As adjusted) 4,185 Provided during the year 52,693 Utilized during the year (51,827) Balance as of December 31, 2022 (As adjusted) 5,051 Provided during the year 21,116 Utilized during the year (22,959) Balance as of December 31, 2023 3,208 |
Lease
Lease | 12 Months Ended |
Dec. 31, 2023 | |
Lease | |
Lease | 16. The Group has operating leases for office space, warehouses, stores, dormitories and office equipment that the Group utilizes under lease arrangement. The Group also leases space for a manufacturing facility which houses production equipment owned by the Company and operated in cooperation with a third party operational partner. A summary of supplemental information related to operating leases is as follows: As of December 31, 2022 2023 (As adjusted) RMB RMB Lease right‑of‑use assets, net 75,008 52,562 Lease liabilities - current portion 45,955 29,435 Lease liabilities - non-current portion 39,968 24,419 Total lease liabilities 85,923 53,854 Weighted average remaining lease term 2.24 years 1.88 years Weighted average annual discount rate 4.75 % 4.75 % A summary of lease cost recognized in the Group’s consolidated statements of comprehensive income and supplemental cashflow information related to operating leases is as follows: For the year ended December 31, 2021 December 31, 2022 December 31, 2023 (As adjusted) (As adjusted) RMB RMB RMB Operating lease expense 74,869 89,629 54,565 Short‑term lease expense 3,174 5,596 5,430 Total lease cost 78,043 95,225 59,995 Supplemental cash flow information for the Group’s leases was as follows: For the year ended December 31, 2021 December 31, 2022 December 31, 2023 (As adjusted) (As adjusted) RMB RMB RMB Cash payments for operating lease liabilities, included in operating cash flows 68,825 77,189 62,636 Lease liabilities arising from obtaining right‑of‑use assets 152,422 35,311 38,746 Decrease in lease liabilities due to termination of lease contracts — (53,510) (12,657) As of December 31, 2023, the remaining lease terms for these operating leases are generally from 1 months to 52 months. The aggregate future minimum rental payments under non-cancelable agreement were as follows: Rental RMB 2024 31,106 2025 18,846 2026 6,357 2027 44 2028 13 Total minimum lease payment 56,366 Less: imputed interest (2,512) Total lease liability balance 53,854 |
Income tax expense
Income tax expense | 12 Months Ended |
Dec. 31, 2023 | |
Income tax expense | |
Income tax expense | 17. Income tax expense Cayman Islands Under the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gain. Additionally, upon payments of dividends by the Company in the Cayman Islands to its shareholders, no Cayman Islands withholding tax will be imposed. Hong Kong Under the current Hong Kong Inland Revenue Ordinance, the subsidiaries of the Group in Hong Kong are subject to 16.5% Hong Kong profit tax for their taxable income earned. Additionally, payments of dividends by the subsidiaries incorporated in Hong Kong to the Company are not subject to any Hong Kong withholding tax. South Korea The subsidiaries of the Group in South Korea are subject to an enterprise income tax on their taxable income in South Korea with a progressive tax rate, which is 9% on the first Korean won (KRW) 200 million, 19% for the taxable income over KRW200 million up to KRW20 billion, 21% for the taxable income over KRW20 billion up to KRW300 billion and 24% for the excess. The subsidiaries of the Group in South Korea are also subject to local income tax with progressive tax rates from 0.9% to 2.4% based on their taxable income. The Korean Enterprise Income Tax Law provides that a withholding tax rate of 20% is normally applicable to dividends paid to non-resident enterprise shareholders. A preferential withholding tax rate of 10% or 15% could be applicable for dividend paid to a Hong Kong resident company provided that certain conditions under the double tax treaty between Hong Kong and the Republic of Korea are met. Indonesia The subsidiary of the Group in Indonesia is subject to 0.5% Indonesia income tax for its revenue earned. 17. Income tax expense (Continued) PRC In accordance with the Enterprise Income Tax Law (“EIT Law”), Foreign Investment Enterprises (“FIEs”) and domestic companies are subject to Enterprise Income Tax (“EIT”) at a uniform rate of 25%. The subsidiaries and the VIE of the Group in the PRC are subject to a uniform income tax rate of 25% for years presented. A subsidiary established in Shenzhen met the criteria for a preferential income tax rate of 15%. According to a policy promulgated by the State Tax Bureau of the PRC and effective from 2008 onwards, enterprises engaged in research and development activities are entitled to claim an additional tax deduction amounting to 50% of the qualified research and development expenses incurred in determining its tax assessable profits for that year. This tax deduction was increased from 50% to 75%, effective from 2018 to 2022 according to a new tax incentives policy promulgated by the State Tax Bureau of the PRC in September 2018, which was further extended to December 31, 2023 and the tax deduction rate was increased from 75% to 100% in certain qualified manufacture industry as the State Tax Bureau of the PRC announced in March 2021 (“Super Deduction”). Shenzhen Wuxin is recognized as “High and New Technology Enterprises” in accordance with the Notice of the Ministry of Science, the Ministry of Finance and the State Administration of Taxation on Amending and Issuing the Administrative Measures for the Determination of High and New Tech Enterprises and is entitled to enjoy a preferential enterprise income tax rate of 15% rather than the 25% uniform statutory tax rate. The preferential tax treatment continues as long as it can retain its “High and New Technology Enterprise” status, for the three-year period from 2023 to 2026, and may not be available in a future period. The EIT Law also provides that an enterprise established under the laws of a foreign country or region but whose “de facto management body” is located in the PRC be treated as a resident enterprise for PRC tax purposes and consequently be subject to the PRC income tax at the rate of 25% for its global income. The Implementing Rules of the EIT Law merely define the location of the “de facto management body” as “the place where the exercising, in substance, of the overall management and control of the production and business operation, personnel, accounting, properties, etc., of a non-PRC company is located.” Based on a review of surrounding facts and circumstances, the Group does not believe that it is likely that its entities registered outside of the PRC should be considered as resident enterprises for the PRC tax purposes. In general, all of the tax returns of the Company’s PRC entities in China remain subject to examination by the tax authorities for up to five years from the date of filing. The Company may also be subject to the examinations of the tax filings in other jurisdictions, which are not material to the consolidated financial statements. The EIT Law also imposes a withholding income tax of 10% on dividends distributed by a FIE to its immediate holding company outside of China, if such immediate holding company is considered as a non-resident enterprise without any establishment or place within China or if the received dividends have no connection with the establishment or place of such immediate holding company within China, unless such immediate holding company’s jurisdiction of incorporation has a tax treaty with China that provides for a different withholding arrangement. The Cayman Islands, where the Company incorporated, does not have such tax treaty with China. According to the arrangement between the mainland China and Hong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention of Fiscal Evasion in August 2006, dividends paid by an FIE in China to its immediate holding company in Hong Kong will be subject to withholding tax at a rate of no more than 5% (if the immediate holding company in Hong Kong is the beneficial owner of the FIE and owns directly at least 25% of the shares of the FIE). In accordance with accounting guidance, all undistributed earnings are presumed to be transferred to parent company and withholding taxes should be accrued accordingly. All FIEs are subject to the withholding tax from January 1, 2008. The presumption may be overcome if the Group has sufficient evidence to demonstrate that the undistributed dividends from its PRC subsidiaries will be re-invested and the remittance of the dividends from its PRC subsidiaries will be postponed indefinitely. 17. Income tax expense (Continued) PRC (Continued) Aggregate undistributed earnings and reserves of the Group entities located in the PRC that are available for distribution to the Company as of December 31, 2022 and 2023 are approximately RMB3,153,855 and RMB2,832,451, respectively. The Group plans to indefinitely reinvested undistributed earnings earned from its PRC subsidiaries in its operations in the PRC, and distribute the earnings earned from its tax-exempt subsidiaries in its operations out of PRC as dividends to shareholders. Therefore, as of December 31, 2022 and 2023, no withholding income tax for undistributed earnings of its subsidiaries were provided, and the unrecognized deferred tax liabilities were RMB315,386 and RMB283,245. Composition of income tax expense The current and deferred components of income taxes appearing in the consolidated statements of comprehensive income are as follows: For the year ended December 31, 2021 December 31, 2022 December 31, 2023 (As adjusted) (As adjusted) RMB RMB RMB Current tax expense 646,979 410,478 46,260 Deferred tax (benefit)/expense (15,553) (38,898) 4,495 Income tax expense 631,426 371,580 50,755 The following table presents a reconciliation of the differences between the statutory income tax rate and the Company’s effective income tax rate for the years ended December 31, 2021, 2022 and 2023: For the year ended December 31, 2021 December 31, 2022 December 31, 2023 (As adjusted) (As adjusted) % % % Statutory income tax rate of the PRC 25 25 25 Tax effect of permanent differences (i) 2 1 2 Change in valuation allowance 1 — (2) Tax effect of preferential tax rates (1) (1) 1 Effect of income tax in jurisdictions other than the PRC (1) (2) (21) Tax effect of Super Deduction and others (2) (2) 3 Effective income tax rate 24 21 8 (i) The permanent book-tax differences mainly consisted of share-based compensation. The following table sets forth the effect of tax holiday to the Group: For the year ended December 31, 2021 December 31, 2022 December 31, 2023 (As adjusted) (As adjusted) RMB RMB RMB Tax holiday effect 36,430 24,365 (8,793) Basic net income per share effect 0.03 0.02 (0.01) Diluted net income per share effect 0.03 0.02 (0.01) 17. Income tax expense (Continued) Deferred tax assets and deferred tax liabilities The following table presents the tax impact of significant temporary differences that give rise to the deferred tax assets and liabilities as of December 31, 2022 and 2023: As of December 31, 2022 2023 (As adjusted) RMB RMB Deferred tax assets: Net operating tax loss carry forwards 34,306 36,235 Inventory provisions 33,128 23,433 Product warranty 1,263 481 Accrued expenses and others 28,464 17,137 Less: Valuation Allowance (16,145) (3,613) Total deferred tax assets 81,016 73,673 Deferred tax liabilities: Accelerated depreciation of property, equipment and leasehold improvement (18,130) (16,145) Unrealized investment income (7,645) (7,301) Assets arisen from business combination — (15,555) Total deferred tax liabilities (25,775) (39,001) Presentation in the consolidated balance sheet Deferred tax assets 63,894 58,263 Deferred tax liabilities (8,653) (23,591) Net deferred tax assets 55,241 34,672 The Group offsets deferred tax assets and liabilities pertaining to a particular tax-paying component of the Group within a particular jurisdiction. The movements in the valuation allowance were as follows: For the year ended December 31, 2022 December 31, 2023 (As adjusted) RMB RMB Balance as of January 1 15,415 16,145 Addition 730 — Reverse — (12,532) Balance as of December 31 16,145 3,613 17. Income tax expense (Continued) Deferred tax assets and deferred tax liabilities (Continued) A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more likely than not that some portion or all of the deferred tax assets will not be realized in the foreseeable future. In making such determination, the Group evaluate a variety of positive and negative factors including the operating history, accumulated deficit, the existence of taxable temporary differences and reversal periods. The Company evaluated its income tax uncertainty under ASC 740. ASC 740 clarifies the accounting for uncertainty in income taxes by prescribing the recognition threshold a tax position is required to meet before being recognized in the financial statements. The Company elects to classify interest and penalties related to an uncertain tax position, if and when required, as part of income tax expense in the consolidated statements of comprehensive income. The Company does not expect the amount of unrecognized tax benefits to increase significantly in the next 12 months. In general, the PRC tax authorities have up to five years to conduct examinations of the tax filings of the Company’s PRC subsidiaries. Accordingly, the PRC subsidiaries’ tax years of 2018 – 2023 remain open to examination by the respective tax authorities. The Company may also be subject to the examination of the tax filings in other jurisdictions, which are not material to the consolidated financial statements. |
Revenues
Revenues | 12 Months Ended |
Dec. 31, 2023 | |
Revenues | |
Revenues | 18. The Group’s revenue by channel for the respective periods are detailed as follows: For the year ended December 31, 2021 December 31, 2022 December 31, 2023 (As adjusted) (As adjusted) RMB RMB RMB Sales of products by channel - Sales to offline distributors 8,361,073 5,168,559 1,487,084 - Others 159,905 164,220 99,313 Total revenues 8,520,978 5,332,779 1,586,397 |
Share-based compensation
Share-based compensation | 12 Months Ended |
Dec. 31, 2023 | |
Share-based compensation | |
Share-based compensation | 19. Share-based compensation Share-based compensation expenses for the years presented relates to (a) share awards to directors, executive officers, employees and consultants of the Group, (b) restricted ordinary shares held in escrow by Relx Inc. to Ms. Ying (Kate) Wang, Mr. Long (David) Jiang and Mr. Yilong Wen (together, “Co-founders”), and three founding employees (together with Co-founders, the “Founding Members”) of the Group. For the years ended December 31, 2021, 2022 and 2023, total share-based compensation expenses allocated and recognized by the Group were amounted to RMB223,345, RMB166,161 and RMB362,868, respectively. (a) Equity Incentive Plans On September 30, 2018 and May 22, 2019, the Board of Directors of Relx Inc. respectively approved 2019 equity incentive plan and 2020 equity incentive plan (together, the “Relx Inc. Incentive Plans”) to attract, motivate, retain and reward certain directors, executive officers, employees and consultants for their contribution to the Group and to Relx Inc.’s non-PRC operations. According to the resolutions of Relx Inc.’s Board of Directors in September 2018, February 2019 and April 2019, the total number of Class B ordinary shares of Relx Inc. available for issuance under Relx Inc. Incentive Plans increased to 22,493,577. The awards granted under Relx Inc. Incentive Plans have a contractual term of ten years from the stated grant date, and are generally scheduled to be vested in four 19. Share-based compensation (Continued) (a) Equity Incentive Plans (Continued) The awards will vest in four to seven equal annual installments, with the number of vested awards for each installment determined based on the grantee’s performance rating during each year. No objective measurement metrics used to determine the performance rating was provided on the stated grant date, and the actual performance rating will only be subjectively determined by Relx Inc.’s chief executive officer after the end of the corresponding year for each annual installment in the period from January 2, 2018 (date of inception) to December 31, 2018 and the year ended December 31, 2019; and from January 1, 2020, the performance rating will be subjectively determined by the compensation committee of Relx Inc. at the end of the corresponding year for each annual installment. Therefore, the stated grant date does not meet the definition of the accounting grant date as there was no mutual understanding of the key terms and conditions. For each annual installment, the accounting grant date is considered to be the date the performance evaluation for corresponding year is completed and communicated, which is the date used to measure the share-based compensation expense. As the awards contain a performance condition that if not satisfied during the year preceding the accounting grant date results in forfeiture of the award, the awards have a service inception date preceding the grant date pursuant to ASC 718-10-55-108; Subject to Relx Inc.’s repurchase right, in the event that the grantee voluntarily terminates employment with the Group within the stated vesting period, any awards vested in prior years will be forfeited and any shares issued from exercised awards will be repurchased at the exercise price paid by the grantee. The Group considered this repurchase feature equivalent to a forfeiture provision that creates an in-substance cliff vesting in four In accordance with ASC 718 Compensation — Stock Compensation, the share-based awards under Relx Inc. Incentive Plans are classified as equity awards. Share-based compensation expenses were accrued beginning on the service inception date (i.e. the stated grant date) and will be re-measured on each subsequent reporting date before the accounting grant date is established. The estimates of the awards’ fair values will be fixed when the accounting grant date occurs and will continue to be amortized over the remaining requisite service period. On December 28, 2020, the Board of Directors of the Company approved a resolution to adopt the 2021 share incentive plan (the “2021 Plan”), effective upon the completion of IPO of the Group. After the successful IPO of the Group, the Company assumes all outstanding share incentive awards issued under Relx Inc. Incentive Plans and to administer the assumed awards pursuant to the 2021 Plan. The maximum aggregate number of ordinary shares that may be issued pursuant to all awards under the 2021 Plan (the “Award Pool”) will consist of (i) 22,493,577 Class A ordinary shares to be assumed from outstanding share incentive awards issued under Relx Inc. Incentive Plans, and (ii) 5,747,262 Class A ordinary shares initially, which may be further increased as determined by the Board of Directors. On January 11, 2021, the Board of Directors of the Company approved a resolution to subdivide each of its authorized ordinary shares (including all issued and unissued ordinary shares) into ten ordinary shares, which was accounted for as a share split (refer to Note1, the “Share Split”). On April 16, 2021, the Share Distribution was completed (refer to Note1, the “Share Distribution”). In connection with the Share Distribution and Share Split, the Company granted share awards under the 2021 Plan to assume all the outstanding share incentive awards issued under Relx Inc. Incentive Plans with the same remaining requisite vesting periods and vesting conditions on April 16, 2021, and each granted share is subdivided into ten shares. Relx Inc. Incentive Plans were cancelled when the option grants were all completed. The Award Pool will consist of (i) 224,935,770 Class A ordinary shares assumed from outstanding share incentive awards issued under Relx Inc. Incentive Plans, and (ii) 57,472,620 Class A ordinary shares initially, which may be further increased as determined by the Board of Directors. The Company accounted for the awards granted under the 2021 Plan in connection with the Share Distribution as a modification under ASC 718 and assessed that there was no incremental fair value before and after the modification date. 19. Share-based compensation (Continued) (a) Equity Incentive Plans (Continued) In connection with the Share Distribution, the Company also granted option awards under the 2021 Plan to nonemployees who provide services to Relx Inc. to assume the outstanding share incentive awards issued under the Relx Inc. Incentive Plans with the same remaining requisite vesting periods and vesting conditions on April 16, 2021. Immediately before and after the Share Distribution, the Company and Relx Inc. are ultimately controlled by their common shareholders. In connection with the share-based awards to employees of Relx Inc., the Company does not require service or any form of payment in return from Relx Inc. for such awards. Therefore, such share awards granted to employees of Relx Inc. were measured at fair value on the grant date and recognized as a dividend to the shareholders. In accordance with ASC 718 Compensation - Stock Compensation, the share-based awards to employees of Relx Inc will be re-measured on each subsequent reporting date before the accounting grant date is established. The estimates of the awards’ fair values will be fixed when the accounting grant date occurs, and the re-measured results will be accounted as the adjustment to the amount of the dividend to the Shareholders. On November 1, 2022, the Company announced a resolution to amend the unexercised options by adjusting downward the exercise price to US$0 per share, and the scope of the employees subject to adjustment of exercise price is certain full-time employees who hold options of the Company and will continue to serve the Company or its subsidiaries or affiliates as of January 1, 2023. The Company accounted for the adjustment as a modification under ASC 718, assessed the incremental fair value before and after the modification date and recognized the incremental compensation cost accordingly. The total incremental cost as a result of the modification was RMB22,307 and will be recorded over the remaining service periods. Share Options The summary of the options granted to the directors, executive officers, employees and consultants of the Group as of December 31, 2021, 2022 and 2023 is presented below: Granted (For Purposes of Measuring Share ‑ based Contractually Granted Compensation Expense) As of January 1, 2021 124,660,750 11,271,880 Granted 1,920,500 4,563,790 As of December 31, 2021 126,581,250 15,835,670 Granted — 27,846,178 As of December 31, 2022 126,581,250 43,681,848 Granted 12,012,400 30,811,514 As of December 31, 2023 138,593,650 74,493,362 19. Share-based compensation (Continued) (a) Equity Incentive Plans (Continued) Weighted Weighted Average Aggregate Average Exercise Remaining Intrinsic Number Price Contractual Life Value of Shares (US$) (Years) (in thousands US$) Outstanding as of January 1, 2021 11,057,510 0.181 8.13 97,280 Granted 4,563,790 0.670 7.87 14,741 Forfeited (1,695,896) 0.222 — — Outstanding as of December 31, 2021 13,925,404 0.336 7.35 49,627 Granted 27,846,178 0.171 7.41 59,041 Forfeited (303,241) 0.780 — — Outstanding as of December 31, 2022 41,468,341 0.171 7.06 88,297 Granted 30,811,514 0.130 6.85 48,251 Exercised (10,802,458) 0.268 — — Forfeited (9,056,467) 0.144 — — Outstanding as of December 31, 2023 52,420,930 0.163 6.62 116,149 Vested and Exercisable as of December 31, 2021 1,115,739 0.009 7.00 4,341 Vested and Exercisable as of December 31, 2022 11,126,832 0.200 6.24 23,361 Vested and Exercisable as of December 31, 2023 6,221,650 0.190 5.48 11,263 As of December 31, 2022 and 2023, 5,973,185 and 7,817,866 outstanding share options were held by nonemployees mainly including employees of Relx Inc. RSU The summary of the restricted share units (RSU) activity under the 2021 Plan during the years ended December 31, 2021, 2022 and 2023 is presented below: Granted (For Purposes of Measuring Share-based Contractually Granted Compensation Expense) As of December 31, 2021 8,514,375 — Granted 22,467,333 4,434,659 Forfeited — (80,321) As of December 31, 2022 30,981,708 4,354,338 Granted 9,514,319 2,471,222 Vested — (458,719) Forfeited — (3,413,780) As of December 31, 2023 40,496,027 2,953,061 For the years ended December 31, 2021, 2022 and 2023, the share-based compensation expenses recognized by the Group for share awards under the Equity Incentive Plans were RMB211,947, RMB166,161 and RMB362,868, respectively. As of December 31, 2023, there was unrecognized compensation expense amounted to RMB563,615 attributable to the Group related to unvested share awards which are expected to be recognized over a weighted average period of 1.27 years. For the years ended December 31, 2021, 2022 and 2023, the number of vested options were 1,115,739, 10,011,093 and 5,897,276, the number of exercised options were nil,9,648,928, and 11,364,636. 19. Share-based compensation (Continued) (a) Equity Incentive Plans (Continued) For the years ended December 31, 2021, 2022 and 2023, the number of vested RSU were nil, nil and 469,719. The fair value for each of the share options granted under the Equity Incentive Plans for the years ended December 31, 2021, 2022 and 2023 was estimated on the grant dates or at the end of each reporting period when an accounting grant date was not established, using a binomial option pricing model with the following assumptions used: For the year ended December 31, 2021 December 31, 2022 December 31, 2023 Risk-free interest rate 1.01%~1.74% 3.93%~3.99% 3.55%~4.18% Expected terms (in years) 7~9 5~8 5~8 Expected volatility 50.33%~53.78 % 86.07%~87.99% 77.50%~87.20% Expected dividend yield — — — Fair value of underlying ordinary share (US$) 3.9 2.3 2.0 The risk-free interest rate is estimated based on the daily treasury long-term rate of U.S. Department of the Treasury with a maturity period close to the expected term of the options. The expected volatility as of December 31, 2021, 2022 and 2023 is estimated based on the annualized standard deviation of daily stock price of the company and comparable companies with a time horizon close to the expected term. Expected term is the remaining life from the valuation date to the maturity of the contract life of the options. Relx Inc. and the Company have no determined plan of paying significant dividends on its ordinary shares. (b) Restriction of Relx Inc.’s ordinary shares held by the Founding Members On May 18, 2018, upon the completion of the Domestic PS Financing, the Founding Members agreed to put all their ordinary shares in Beijing Wuxin into escrow (“Beijing Wuxin’s Restricted Ordinary Shares”) and the Group released the shares from escrow to them only if specified service criteria are met. One half two second On September 27, 2018, all the Founding Members’ ordinary shares in Beijing Wuxin (including the shares under the Beijing Wuxin’s Restricted Ordinary Shares arrangement) were replaced by the ordinary shares of Relx Inc. (the “Relx Inc.’s Restricted Ordinary Shares”) in conjunction with the First Reorganization and Relx Inc.’s Restricted Ordinary Shares continued to subject to the same remaining vesting schedule as the original restriction arrangement. Relx Inc.’s Restricted Ordinary Shares continued to be subject to accelerated vesting under certain circumstances including a successful IPO of Relx Inc. As disclosed in Note 1(b)(i), the change in the terms of Beijing Wuxin’s Restricted Ordinary Shares was a modification as it was conducted in conjunction with the First Reorganization which was similar to under a common control and the modification impact was evaluated not material. The Group continued to recognize the share-based compensation expenses related to Relx Inc.’s Restricted Ordinary Shares in its consolidated statements of comprehensive income with the amount allocated by Relx Inc. On December 17, 2020, the Founding Members, Relx Inc. and Relx Inc.’s preferred shareholders entered into a series of agreements regarding the corporate restructuring following a successful IPO of the Group, pursuant to which, Relx Inc.’s Restricted Ordinary Shares held by the Founding Members, which were subject to accelerated vesting upon a successful IPO of Relx Inc., will now be fully vested to the Founding Members upon a successful IPO of the Group. The amendment on the accelerated vesting condition was a modification under ASC 718 and the accounting impact of the modification was not material, as the modification was on vesting conditions of the awards and had no impact on the awards’ fair value immediately before and after the modification. 19. Share-based compensation (Continued) (b) Restriction of RELX’s ordinary shares held by the Founding Members (continued) In January 2021, the Company completed its IPO on the New York Stock Exchange (“NYSE”). Upon the completion of IPO, the Group recognized RMB11,398 share-based compensation expenses related to Relx Inc.’s Restricted Ordinary Shares because the accelerated vesting condition was achieved. The following table sets forth the summary of restricted shares activities of Relx Inc. (*): Weighted ‑ Average Number of Restricted Grant Date Shares Granted Fair Value US$ Outstanding as of January 1, 2020 65,571,473 0.09 Granted — — Vested (40,982,171) 0.09 Forfeited — — Outstanding as of December 31, 2020 24,589,302 0.09 Granted — — Vested (24,589,302) 0.09 Forfeited — — Outstanding as of December 31, 2021 — — (*) The share-based compensation expenses discussed below only include the expenses attributable to the Group. The number of Relx Inc.’s Restricted Ordinary Shares vested during the years ended December 31, 2021, 2022 and 2023 were 24,589,302, nil and nil, respectively. For the years ended December 31, 2021,2022 and 2023, share-based compensation expenses recognized and associated with the Beijing Wuxin’s Restricted Ordinary Shares or Relx Inc.’s Restricted Ordinary Shares attributable to the Group were RMB11,398, nil and nil, respectively. In order to determine the fair value of Relx Inc.’s Restricted Ordinary Shares, the Group first determined Relx Inc.’s equity value and then allocated the equity value to each element of Relx Inc.’s capital structure (preferred shares and ordinary shares) using a combination of the probability-weighted expected return method and the option pricing method. In determining the equity value of Relx Inc., the Group used the discounted cash flow (DCF) method of the income approach as the primary valuation approach, and to cross-check the reasonableness of results derived under the income approach by the market approach. The DCF analysis is performed using the projected cash flows developed by Relx Inc. based on its best estimates as of the valuation date. The determination of fair value requires complex and subjective judgments to be made regarding projected financial and operating results, unique business risks, the liquidity of shares and operating history and prospects at the time of valuation. The major assumptions used in the DCF analysis are discount rate and discount for lack of marketability (DLOM). The discount rates applied in the DCF analysis are based on the weighted average cost of capital (WACC) determined after considering factors including risk-free rate, comparative industry risk, equity risk premium, company size and non-systematic risk factors; while the DLOM was estimated based on the value of a put option determined by using the Finnerty model. The value of a put option serves as a proxy for the premium a willing buyer would pay to guarantee the marketability and price of the underlying asset in the future. |
Shareholders' equity
Shareholders' equity | 12 Months Ended |
Dec. 31, 2023 | |
Shareholders' equity | |
Shareholders' equity | 20. Ordinary shares As of December 31,2023, the issued share capital consisted of 1,570,790,570 ordinary shares at a par value of US$ 0.00001 per share (previously US$0.0001 per share before the Share split as detailed in Note 1), of which 1,262,075,580 shares were designated as Class A ordinary shares, 308,714,990 as Class B ordinary shares. The rights of the holders of Class A and Class B ordinary shares are identical, except with respect to voting and conversion rights. Each share of Class A ordinary shares is entitled to one vote per share and is not convertible into Class B ordinary shares under any circumstances. Each share of Class B ordinary shares is entitled to ten votes per share and is convertible into one Class A ordinary share at any time by the holder thereof. Upon any transfer of Class B ordinary shares by a holder thereof to any person or entity that is not an affiliate of such holder, such Class B ordinary shares would be automatically converted into an equal number of Class A ordinary shares. 309,456,800 and nil Class B ordinary shares were converted into an equal number of Class A ordinary shares in 2022 and 2023, respectively. In January 2021, the Company completed its IPO, 133,975,000 American depositary shares (“ADSs”), representing 133,975,000 Class A Ordinary shares, were issued and sold to the public, with proceeds of approximately US$1,553.0 million, net of underwriter commissions and relevant offering expenses. Treasury stock On December 8, 2021, the Company announced that its Board of Directors authorized a share repurchase program under which the Company may repurchase up to US$500 million of its shares over a period until December 31, 2023. In December 2023, the Company’s Board of Directors authorized the extension of its existing share repurchase program established in December 2021 for an additional 24-month period through December 31, 2025. As of December 31, 2023, the Company has repurchased approximately 95.7 million ADSs (equivalent to approximately 95.7 million ordinary shares) for approximately US$188.5 million under this program. The Company accounts for repurchased ordinary shares under the cost method and includes such treasury stock as a component of the shareholders’ equity. Additionally, in order to lower the average cost of acquiring shares in the ongoing share repurchase program, the Company purchased a series of capped call options of US$100.6 million for the repurchase of shares. Upon expiration of the option, if the closing market price of the Company’s common share is at or above the pre-determined price (the “Strike Price”), the Company will have its initial investment returned with a premium in either cash or shares at the Company’s election. If the closing market price is below the Strike Price, the Company will receive the number of shares specified in the agreement. As the outcome of these arrangements is based entirely on the Company’s stock price and does not require the Company to deliver either shares or cash, other than the initial investment, the entire transaction is recorded in equity. As of December 31, 2023, the Company received approximate US$29.5 million (approximately RMB209.5 million) of cash and approximate US$27.9 million (approximately RMB199.5 million) of shares that was recorded in equity. 20. Retained earnings Relevant PRC laws and regulations permit payments of dividends by the Group’s entities incorporated in the PRC only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. In addition, the Company’s entities in the PRC are required to annually appropriate 10% of their net after-tax income to the statutory general reserve fund prior to payment of any dividends, unless such reserve funds have reached 50% of their respective registered capital. Furthermore, cash transfers from the Company’s PRC subsidiaries to their parent companies outside of China are subject to PRC government control of currency conversion. Shortages in the availability of foreign currency may restrict the ability of the PRC subsidiaries and consolidated affiliated entities to remit sufficient foreign currency to pay dividends or other payments to the Company, or otherwise satisfy their foreign currency denominated obligations. As a result of these and other restrictions under PRC laws and regulations, the Company’s subsidiaries, the VIE and VIE’s subsidiaries incorporated in the PRC are restricted in their ability to transfer a portion of their net assets to the Company either in the form of dividends, loans or advances. Amounts of net assets restricted include paid-in capital and statutory reserve funds of the Company’s PRC subsidiaries and the net assets of the VIEs in which the Company has no legal ownership, totaling RMB73,571 and RMB71,724 (US$ 10,102) as of December 31, 2022 and 2023, respectively. Even though the Company currently does not require any such dividends, loans or advances from the PRC entities for working capital and other funding purposes, the Company may in the future require additional cash resources from them due to changes in business conditions, to fund future acquisitions and development, or merely to declare and pay dividends or distributions to its shareholders. Except for the above, there is no other restriction on the use of proceeds generated by the Company’s subsidiaries, the VIE and VIE’s subsidiaries to satisfy any obligations of the Company. In November 2023, the Company announced that its Board of Directors approved a cash dividend of US$0.01 per ordinary share, or US$0.01 per ADS, to holders of ordinary shares and holders of ADSs, respectively, as of the close of business on December 1, 2023 Beijing/Hong Kong Time and New York Time, respectively, payable in U.S. dollars. The majority of cash dividend was paid in December 2023 to shareholders. The aggregate amount of the dividend is approximately RMB93,265 (US$ 13,035). For the year ended December 31, 2023, the Company performed a test on the restricted net assets of its consolidated subsidiaries and VIE (the “restricted net assets”) in accordance with Securities and Exchange Commission Regulation S-X Rule 4-08 (e) (3) “General Notes to Financial Statements” and concluded that the restricted net assets do not exceed 25% of the consolidated net assets of the Company as of December 31, 2023 and the condensed financial information of the Company are not required to be presented. |
Net income per ordinary share
Net income per ordinary share | 12 Months Ended |
Dec. 31, 2023 | |
Net income per ordinary share | |
Net income per ordinary share | 21. Basic net income per ordinary share is the amount of net income available to each share of ordinary shares outstanding during the reporting period, computed by dividing net income attributable to ordinary shareholders by the weighted average number of outstanding ordinary shares, adjusted for treasury stock. Diluted net income per ordinary share is the amount of net income available to each share of ordinary shares outstanding during the reporting period adjusted to include the effect of potentially dilutive ordinary equivalent shares. For the calculation of diluted net income per ordinary share, net income attributable to ordinary shareholders for basic net income per ordinary share is adjusted by the effect of dilutive securities, including share-based awards, under the treasury stock method. Pursuant to the Second Reorganization Agreements, the Company effected a share split by issuing additional 143,681,555 shares to Relx Inc. on November 25, 2020. On January 11, 2021, the Company effected a share split to subdivide each of its authorized ordinary shares into ten ordinary shares (Refer to Note 1(b)(iii)). The effects of the share splits in November 2020 and January 2021 were retrospectively presented on January 2, 2018 (date of inception), including in calculating the net income per ordinary share. 21. For the years ended December 31, 2021, 2022 and 2023, the basic and diluted net income per ordinary share reflecting the effects of the share splits are presented as follows. For the year ended December 31, December 31, December 31, 2021 2022 2023 (As adjusted) (As adjusted) RMB RMB RMB Numerator: Net income attributable to RLX Technology Inc. 2,024,713 1,441,219 534,328 Numerator for basic and diluted net income per ordinary share 2,024,713 1,441,219 534,328 Denominator: Weighted average number of ordinary shares (i) 1,401,371,494 1,319,732,802 1,311,401,901 Denominator used for net income per ordinary share - basic 1,401,371,494 1,319,732,802 1,311,401,901 Adjustments for dilutive options and RSUs 8,319,385 8,411,290 29,043,752 Denominator for net income per ordinary share - diluted 1,409,690,879 1,328,144,092 1,340,445,653 Net income per ordinary share - Basic 1.445 1.092 0.407 - Diluted 1.436 1.085 0.399 |
Related party transactions
Related party transactions | 12 Months Ended |
Dec. 31, 2023 | |
Related party transactions | |
Related party transactions | 22. The table below sets forth the major related parties and their relationships with the Group: Related parties Relationship with the Group Relx Inc. and entities within Relx Inc.’s operations Under common control of beneficial owner Sunnyheart Inc. and entities within Sunnyheart Inc.’s operations Under common control of beneficial owner Ms. Ying (Kate) Wang Shareholder of Relx Inc., shareholder of Sunnyheart Inc., Chief Executive Officer of the Group 22. (a) Major related parties’ transactions were as follows: For the year ended December 31, 2021 December 31, 2022 December 31, 2023 (As adjusted) (As adjusted) RMB RMB RMB Expenses allocated from/(to) related parties: - Share-based compensation expenses allocated from Relx Inc. (i) 474,132 — — - Expenses allocated to Relx Inc.’s operations (ii) — (4,883) (13,370) - Expenses allocated from Relx Inc.’s operations (ii) — 399 2,696 Sales to related parties : - Entity within Relx Inc.’s operations (iii) 42,267 66,752 293,530 Purchase from related parties : - Entity within Relx Inc.’s operations (iv) — — 71,156 - Others — — 1,212 Other transactions with related parties : - Redemption of long-term investments by Relx Inc. and Sunnyheart Inc. (v) — — 588,872 Total 516,399 62,268 944,096 (i) Prior to the Share Distribution, share-based compensation expenses were incurred by Relx Inc. and were allocated and pushed down to the Group’s consolidated statements of comprehensive income. These allocations were based on percentage of revenue between the Group and Relx Inc.’s operations. Refer to Notes 1 and 19. (ii) Certain employees concurrently worked for the Group and Relx Inc.’s operations, staff costs and related expenses were shared by the Group and Relx Inc.’s operations. A portion of these staff costs and related expenses was allocated to/from Relx Inc.’s operations. (iii) Since June 2021, the Group has sold certain raw materials and finished goods to entities within Relx Inc.’s operations, in the ordinary course of the Group’s operating activities. (iv) In 2023, the Group has purchased certain finished goods from entities within Relx Inc.’s operations, in the ordinary course of the Group’s operating activities. (v) In September 2023, the Group purchased certain shares of its affiliated entities from several third-party selling shareholders. In December 2023, along with the updates in the Group’s international expansion plan, the previously acquired share investments were redeemed by its two affiliated entities. The difference between consideration received and the carrying amount of equity investments disposed was recognized as investment income in the consolidated statements of comprehensive income. 22. Related party transactions (Continued) (b) The Gro up also received financing from and provided financing to related parties as follows: For the year ended December 31, 2021 December 31, 2022 December 31, 2023 (As adjusted) (As adjusted) RMB RMB RMB Financing (received from)/provided to related parties: - Financing proceeds received from Relx Inc.’s operations and Sunnyheart Inc.’s operations (i) — — (41,107) - Funds paid back to Relx Inc. (ii) 11,174 — — - Investment prepayment returned from Relx Inc. (iii) (21,006) — — - Others — — (327) Total (9,832) — (41,434) (i) In 2023, prior to the business combination (refer to Note 1 (e)), entities within Relx Inc.’s operations and Sunnyheart Inc.’s operations provided certain fundings to SS North Asia, Sunnyheart and Relx Indonesia to support their business. Such related party transactions of the acquired businesses were included in the Group’s consolidated financial statements retrospectively. (ii) After the First Reorganization, as Relx Inc. raised US$ proceeds from its equity financing, Relx Inc. provided funding to the Group to support the Group’s business. These fund advances were accounted for as increase to amounts due to related parties. During the years ended December 31, 2021, 2022 and 2023, the Group received funds of nil , nil and nil from Relx Inc. and paid back RMB 11,174 , nil and nil , respectively. (iii) The Group made investment prepayment to an investee on behalf of Relx Inc., as the investee was setting up its overseas holding structure to enable Relx Inc. to hold the investee’s overseas shares. This prepayment was accounted for as an increase to amount due from the related parties as of December 31, 2019. The prepayment was returned to the Group in March 2021. (c) Major b alances with related parties were as follows: As of December 31, 2022 2023 (As adjusted) RMB RMB Amounts due from related parties Current - Expenses allocated to Relx Inc.’s operations 5,112 7,980 - Sales of products to related party — 97,326 - Others (i) — 13,430 Total 5,112 118,736 Amounts due to related parties Current - Expenses allocated from Relx Inc.’s operations (423) (5,411) - Purchase from related parties — (55,311) - Funds received from related parties — (41,107) - Others — (98) Total (423) (101,927) (i) Others mainly include claimed amount for obsolete goods sold by entities within Relx Inc.’s operations in 2023. |
Fair value measurement
Fair value measurement | 12 Months Ended |
Dec. 31, 2023 | |
Fair value measurement | |
Fair value measurement | 23. Fair value measurement The fair value guidance describes three main approaches to measure the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. When available, the Group uses quoted market prices to determine the fair value of an asset or liability. If quoted market prices are not available, the Group will measure fair value using valuation techniques that use, when possible, current market-based or independently sourced market parameters, such as interest rates and currency rates. The Group adopted ASU 2018-13 Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (the “ASU 2018-13”) on January 1, 2020. The adoption of ASU 2018-13 had no significant impact on the Group’s consolidated financial statements. The Group did not have any other financial instruments that were required to be measured at fair value on a recurring basis as of December 31, 2022 and 2023 except for short-term investments and available-for-sale debt securities. The following table summarizes the Group’s assets that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy as of December 31, 2022 and 2023: Level 1 Level 2 Level 3 RMB RMB RMB As of December 31, 2023 Short-term investments_ Fair value option (i) — 2,183,862 — Short-term investments, net_ Available-for-sale (ii) — 561,940 — As of December 31, 2022 (As adjusted) Short-term investments_ Fair value option (i) — 2,434,864 — Long-term investment securities, net_ Available-for-sale (i) — 557,492 — (i) The Group classifies the short-term and long-term investment securities as held-to-maturity or available-for-sale, whose classification determines the respective accounting methods stipulated by ASC 320. For certain investment securities, the Company elects the fair value option at the date of initial recognition and carries these investments subsequently at fair value. (ii) The Group values these investment securities classified as available-for-sale with fair value option elected based on quoted prices of similar products provided by banks at the end of each year, and accordingly, the Group classifies the valuation techniques that use these inputs as Level 2. Apart from the short-term investments, net and long-term investment securities, net, the Group’s financial instruments consist of cash and cash equivalents, restricted cash, short-term bank deposits, net, long-term bank deposits, net, accounts and notes receivable, net, receivables from online payment platforms, amounts due from related parties, prepayments and other current assets, net, accounts and notes payable, accrued expenses and other current liabilities and amounts due to related party. 23. Fair value measurement (Continued) As of December 31, 2022 and 2023, the Group had no financial assets or financial liabilities that are measured at fair value on a non-recurring basis apart from the long-term investments, which were measured using significant unobservable inputs (Level 3) and written down from their respective carrying values to fair values with impairment charges incurred and recorded in the consolidated statements of comprehensive income. The fair values of long-term investments were measured under the income approach, based on the Group’s best estimation. Significant inputs used in the income approach primarily included future estimated cash flows and discount rate, derived from a review of the investee’s operation results, expected growth rates and cost of capital, which are highly judgmental due to the subjectivity of the unobservable inputs (Level 3) used in the valuation methodologies used to determine fair value. Many of the factors used in assessing fair value are outside the control of management, and these assumptions and estimates may change in future periods. The Group’s non-financial assets, such as intangible assets, fixed assets and goodwill, would be measured at fair value on a non-recurring basis whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. The fair values of non-financial long-lived assets were measured under income approach, based on the Company’s best estimation. Significant inputs used in the income approach primarily included future estimated cash flows and discount rate. Impairment recorded for long-term investments for the years ended December 31, 2021, 2022 and 2023 was nil, RMB4,000 and nil, respectively. Impairment recorded for the acquired intangible assets, fixed assets based on management’s assessment for the years ended December 31, 2021, 2022 and 2023 was nil, RMB29,938 and RMB5,008. |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and contingencies | |
Commitments and contingencies | 24. (a) Commitments As of December 31, 2023, future minimum commitments under non-cancelable agreements were as follows: Rental RMB 2024 4,220 The operating commitments as of December 31, 2023 presented above mainly consist of the short-term lease commitments and leases that have not yet commenced but that created significant rights and obligations for the Company, which are not included in operating lease right-of-use assets and lease liabilities. (b) Litigation From time to time, the Group is involved in claims and legal proceedings that arise in the ordinary course of business. Based on currently available information, management does not believe that the ultimate outcome of any unresolved matters, individually and in the aggregate, is reasonably possible to have a material adverse effect on the Group’s financial position, results of operations or cash flows. However, litigation is subject to inherent uncertainties and the Group’s view of these matters may change in the future. The Group records a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Group reviews the need for any such liability on a regular basis. The Group has not recorded any material liabilities in this regard as of December 31, 2022 and 2023. |
Geographic information
Geographic information | 12 Months Ended |
Dec. 31, 2023 | |
Geographic information | |
Geographic information | 25. Geographic information The following table presents revenue by geography area, China and international markets, based on the geography location for the year ended December 31, 2021, 2022 and 2023. For the year ended December 31, 2021 (As adjusted) December 31, 2022 (As adjusted) December 31, 2023 RMB RMB RMB Total Revenue: China 8,520,978 5,332,779 1,357,884 International — — 228,513 8,520,978 5,332,779 1,586,397 As of December 31, 2022 and 2023, substantially all of the Group’s long-lived assets of the Group are located in China. |
Significant accounting polici_2
Significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Significant accounting policies | |
Basis of presentation | a) The consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) to reflect the financial position, results of operations and cash flows of the Group. On December 13, 2023, because of the Group’s acquisition of SS North Asia, Sunnyheart and Relx Indonesia, which are under common control by Ms. Ying (Kate) Wang (Note 1(e)), the Group’s consolidated financial statements as of December 31, 2022 and 2023, and for the years ended December 31, 2021, 2022 and 2023 incorporated the results of operations of the acquired companies as if they had been consolidated from the date when it first came under the control of Ms. Ying (Kate) Wang. The Group’s consolidated financial statements as of December 31, 2022, and for the years ended December 31, 2021 and 2022 have been retrospectively adjusted. Significant accounting policies followed by the Group in the preparation of the accompanying consolidated financial statements are summarized below. |
Principles of consolidation | b) The Group’s consolidated financial statements include the financial statements of the Company, its subsidiaries, the VIE and VIE’s subsidiaries for which the Company or its subsidiary is the primary beneficiary. Results of the entities and businesses acquired from the seller controlled by Ms. Ying (Kate) Wang are consolidated from the date when the acquired companies first came under the control of Ms. Ying (Kate) Wang, regardless of the date of the common control acquisition. A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power, has the power to appoint or remove the majority of the members of the board of directors, to cast a majority of votes at the meeting of directors or has the power to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders. A consolidated VIE is an entity in which the Company, or its subsidiary, through contractual arrangements, has the power to direct the activities that most significantly impact the entity’s economic performance, bears the risks of and enjoys the rewards normally associated with ownership of the entity, and therefore the Company or its subsidiary is the primary beneficiary of the entity. All transactions and balances among the Company, its subsidiaries, the VIE and VIE’s subsidiaries have been eliminated upon consolidation. For the Company’s consolidated subsidiaries and VIEs, non-controlling interests are recognized to reflect the portion of their equity that is not attributable, directly or indirectly, to the Company as the controlling shareholder. Non-controlling interests are classified as a separate line item in the equity section of the Group’s consolidated balance sheets and have been separately disclosed in the Group’s consolidated statements of operations and comprehensive income to distinguish the interests from that of the Company. |
Use of estimates | c) The preparation of the Group’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the balance sheet date and reported revenues and expenses during the reported periods in the consolidated financial statements and accompanying notes. Significant accounting estimates reflected in the Group’s consolidated financial statements mainly include, but are not limited to, valuation and recognition of share-based compensation and inventories write-downs. Actual results could differ from those estimates, and such differences may be material to the consolidated financial statements. |
Functional currency and foreign currency translation | d) The Group uses Renminbi (“RMB”) as its reporting currency. The functional currency of the Company and its overseas subsidiaries incorporated in Cayman Islands, BVI, and Hong Kong is United States dollars (“US$”). The functional currency of the Group’s PRC entities is RMB. The Group’s entities in other jurisdictions generally use their respective local currencies as their functional currencies. The determination of the functional currency is based on the criteria of ASC Topic 830, Foreign Currency Matters In the consolidated financial statements, the financial information of the Company and other entities located outside of the PRC have been translated into RMB. Assets and liabilities are translated at the exchange rates on the balance sheet date. Equity amounts other than earnings generated in current period are translated at historical exchange rates. Revenues, expenses, gains and losses are translated using the average rate for the period. Translation adjustments are reported as foreign currency translation adjustments and shown as a component of other comprehensive (loss)/income in the consolidated statements of comprehensive income. Foreign currency transactions denominated in currencies other than the functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency using the applicable exchange rates at the balance sheet dates. Net gains and losses resulting from foreign exchange transactions are included in others, net in the consolidated statements of comprehensive income. |
Convenience translation | e) Convenience translation Translations of the consolidated balance sheets, consolidated statements of comprehensive income and consolidated statements of cash flows from RMB into US$ as of and for the year ended December 31, 2023 are solely for the convenience of the reader and were calculated at the noon buying rate of US$1.00 = RMB7.0999 on December 29, 2023 as set forth in the H.10 statistical release of the U.S. Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate or at any other rate. |
Fair value measurement | f) Fair value reflects the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. The Group applies a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Accounting guidance establishes three levels of inputs that may be used to measure fair value: ● Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. ● Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical asset or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. ● Level 3 applies to asset or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. Refer to Note 23 for additional information. |
Cash and cash equivalents | g) Cash and cash equivalents mainly represent cash at bank, demand deposits which are unrestricted as to withdrawal or use, and which have original maturities of three months or less and are readily convertible to known amount of cash. |
Restricted cash and consolidated statements of cash flows | h) Cash that is legally restricted as to withdrawal or for use or pledged as security is reported separately on the face of the Group’s consolidated balance sheets. In November 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, (“ASU 2016-18”) The Group’s restricted cash mainly represents security deposits held in designated bank accounts for issuance of bank acceptance notes relating to notes payable. |
Bank deposits | i) Bank deposits Short-term bank deposits, net Short-term bank deposits are time deposits with original maturities of longer than three months but less than one year or the long-term bank deposits with a maturity date within one year. Interest earned is recorded as interest income, net in the consolidated statements of comprehensive income during the years presented. Long-term bank deposits, net Long-term bank deposits represent time deposits placed with banks with original maturities more than one year. And those matured within one year are reclassified to short-term bank deposits, net. The Group accounts for the bank deposits at amortized cost less allowance for credit losses. |
Investments | j) Short-term investments, net include debt-classified securities held by the Group with maturities less than one year. Long-term investment securities, net include debt-classified securities held by the Group with maturities more than one year. The Group classifies the investment securities as held-to-maturity or available-for-sale, whose classification determines the respective accounting methods stipulated by ASC 320. Held-to-maturity debt securities include debt instruments with fixed interest rates issued by financial institutions for which the Group has the positive intent and ability to hold those securities to maturity. The Group accounts for the held-to-maturity debt securities at amortized cost less allowance for credit losses. Available-for-sale debt securities include debt instruments with a variable interest rate indexed to the performance of underlying assets, which are reported at fair value, with changes in fair values reflected in other comprehensive (loss)/income in the consolidated statements of comprehensive income. Fair value is estimated based on quoted prices of similar products provided by financial institutions at the end of each reporting period. The Group classifies these inputs as Level 2 fair value measurement. For certain investments in financial instruments with a variable interest rate indexed to the performance of underlying assets, the Group elects the fair value option at the date of initial recognition and carries these investments subsequently at fair value. Changes in fair values are reflected in investment income in the consolidated statements of comprehensive income. Fair value is estimated based on quoted prices of similar products provided by financial institutions at the end of each reporting period. The Group classifies these inputs as Level 2 fair value measurement. The allowance for credit losses on available-for-sale debt securities is accounted for in accordance with ASC 326. At each reporting period, available-for-sale debt securities are evaluated at the individual security level to determine whether there is a decline in the fair value below its amortized cost basis (an impairment). In circumstances where the Group intends to sell, or is more likely than not required to sell, the security before it recovers its amortized cost basis, the difference between fair value and amortized cost is recognized as a loss in the consolidated statements of comprehensive income, with a corresponding write-down of the security’s amortized cost. In circumstances where neither condition exists, the Group then evaluates whether a decline is due to credit-related factors. The factors considered in determining whether a credit loss exists can include the extent to which fair value is less than the amortized cost basis, changes in the credit quality of the underlying loan obligors, credit ratings actions, as well as other factors. To determine the portion of a decline in fair value that is credit-related, the Group compares the present value of the expected cash flows of the security discounted at the security’s effective interest rate to the amortized cost basis of the security. A credit-related impairment is limited to the difference between fair value and amortized cost, and recognized as an allowance for credit loss on the consolidated balance sheets with a corresponding adjustment to net income. Any remaining decline in fair value that is non-credit related is recognized in other comprehensive (loss)/income, net of tax. Improvements in expected cash flows due to improvements in credit are recognized through reversal of the credit loss and corresponding reduction in the allowance for credit loss. Interest earned for both held-to-maturity and available-for-sale long-term investment securities is recorded as interest income, net in the consolidated statements of comprehensive income during the years presented. Long-term investments, net The Group elects to record an equity investment without readily determinable fair values and not accounted for by the equity method at its cost less impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer (“measurement alternative”). As of December 31, 2023, the Group’s long-term investments consist of investments in privately held companies which do not have readily determinable fair values and therefore the Group recognized these investments at cost adjusted for changes from observable transactions for identical or similar investments of the same investee, less impairment. j) The Group regularly evaluates the long-term investments for impairment based on performance and financial position of the investees as well as other evidence of market value for each reporting period. Such evaluation includes, but not limited to, reviewing the investees’ cash position, recent financing, projected and historical financial performance, cash flow forecasts and financing needs. An impairment loss is recognized in others, net in the consolidated statements of comprehensive income equal to the excess of the investment’s carrying value over its fair value. The impairment on long-term investments for the years ended December 31, 2021, 2022 and 2023 was nil, RMB4,000 and nil. |
Accounts and notes receivable, net | k) Accounts and notes receivable are recognized and carried at the original invoiced amount less an allowance for credit losses. The Group maintains an allowance for credit losses in accordance with ASC 326 and records the allowance for credit losses as an offset to accounts and notes receivable. Expected credit losses of RMB141, RMB201 and RMB2,884 were recorded as general and administrative expenses in the consolidated statements of comprehensive income for the years ended December 31, 2021, 2022 and 2023. Refer to Note 2(ah) “Allowance for credit losses” for additional information about adoption of ASC 326. |
Inventories | l) Inventories of the Group consist of raw materials and finished goods. Inventories are stated at the lower of cost or net realizable value. Cost is determined using the weighted average method. Inventories write-downs are made for excessive, slow moving, expired and obsolete inventories as well as for inventories with carrying values in excess of net realizable value. Certain factors could impact the realizable value of inventory, so the Group continually evaluates the recoverability based on assumptions about customer demand and market conditions. The evaluation may take into consideration of historical usage, expiration date, expected demand, anticipated sales price, new product development schedules, product obsolescence, customer concentrations and other factors. Inventories write-downs are recorded in cost of revenue in the consolidated statements of comprehensive income. |
Property, equipment and leasehold improvement, net | m) Property, equipment and leasehold improvement are stated at cost less accumulated depreciation and impairment, if any. Except for land, which is not depreciated, depreciation of other items of property, equipment and leasehold improvement is computed using the straight-line method over the following estimated useful lives: Category Estimated useful lives Electronic equipment 3-5 years Furniture and office equipment 3-5 years Machinery and equipment 2-10 years Transportation equipment 5 years Office building 40 years Leasehold improvement The shorter of the term of the lease or the estimated useful lives of the assets Expenditures for maintenance and repairs are expensed as incurred, whereas the costs of renewals and betterment that extend the useful lives of property, equipment and leasehold improvement are capitalized as additions to the related assets. The gain or loss on the disposal of property, equipment and leasehold improvement is the difference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in others, net in the consolidated statements of comprehensive income. |
Intangible assets, net | n) Intangible assets mainly include purchased intangible assets and those acquired through a business combination under common control (refer to Note 1(e)). Intangible assets purchased from third parties mainly consist of license of copyright, software and trademark. Identifiable intangible assets are carried at acquisition cost less accumulated amortization and impairment loss, if any. Intangible assets acquired in a business combination under common control, mainly consisting of brands and channel relations, were recognized at the carrying amount recorded by the former parent of the entities under common control. Finite-lived intangible assets are tested for impairment if impairment indicators arise. Amortization of finite-lived intangible assets is computed using the straight-line method over their estimated useful lives, which are as follows: Category Estimated useful lives License of copyright 2 years Purchased software 2-3 years Trademark 2 years Brands 10 years Channel relations 6 years |
Goodwill | o) Goodwill represents the excess of the purchase price over the amounts assigned to the fair value of the identifiable assets acquired and the liabilities assumed of an acquired business. Goodwill of the Group was arisen from a business combination under common control (refer to Note 1 (e)), and recognized at the historical cost recorded by the former parent of the entities under common control. In accordance with ASC 350, Intangibles-Goodwill and Other, recorded goodwill amounts are not amortized, but rather are tested for impairment annually or more frequently at the reporting unit level if there are indicators of impairment present. Under ASC 350-20-35, the Group has the option to assess qualitative factors first to determine whether it is necessary to perform the quantitative impairment test. In the qualitative assessment, the Group considers primary factors such as industry and market considerations, the overall financial performance of the reporting unit, and other specific information related to the operations. If the Group determines, as a result of the qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit is less than the carrying amount, the quantitative impairment test is required. Otherwise, no further testing is required. The quantitative impairment test compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit is greater than zero and its fair value exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. If the carrying value of the reporting unit, including goodwill, exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, but limited to the total amount of goodwill allocated to that reporting unit. Based on an assessment of the qualitative factors, the Group determined that it is more-likely-than-not that the fair value of its reporting unit is in excess of its carrying amount as of December 31, 2023. Therefore, no impairment loss was recorded for the year ended December 31, 2023 (2022: nil). |
Impairment of long-lived assets other than goodwill | p) Long-lived assets are evaluated for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be fully recoverable or that the useful life is shorter than the Group had originally estimated. When these events occur, the Group evaluates the impairment for the long-lived assets by comparing the carrying value of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying value of the assets, the Group recognizes an impairment loss based on the excess of the carrying value of the assets over the fair value of the assets. Impairment charge of nil, RMB42,529 and RMB5,080 was recognized for the years ended December 31, 2021, 2022 and 2023. |
Leases | q) The Group leases office space, warehouses, stores, dormitories and office equipment for fixed periods ranging from 1 month to 60.5 months, some of which have extension options. Extension options are not recognized by the Group in the determination of lease liabilities unless renewals are reasonably certain. The Group has elected the short-term lease measurement and recognition exemption. The Group recognizes lease payments for its short-term lease on a straight-line basis over the lease term and reassesses the extension options of them to be qualify for the short-term lease measurement. As of December 31, 2022 and 2023, all the Group’s leases are classified as operating leases. For operating leases, the lease liability is initially and subsequently measured at the present value of the unpaid lease payments at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred less any lease incentives received. Costs associated with operating lease assets are recognized on a straight-line basis within operating expenses over the term of the lease. In determining the present value of the unpaid lease payments, ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. As most of the Group’s leases do not provide an implicit rate, the Group uses its incremental borrowing rate as the discount rate for the lease. The Group’s incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments. |
Revenue recognition | r) The Group follows five steps for revenue recognition: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Group’s revenues are primarily derived from sales of the Group’s products to offline distributors who are responsible for sales to retailers and end users. Refer to Note 18 to the consolidated financial statements for disaggregation of the Group’s revenue for the years ended December 31, 2021, 2022 and 2023. Sale of products to offline distributors Under the distribution agreements, the offline distributors purchase products from the Group, take delivery and are responsible for commercial distribution and offline terminal sales to retailers and end users in authorized distribution areas. After taking control of the products, the offline distributor is responsible for carrying out direct interactions with retailers and end users, delivering the products and providing customer support. Based on these indicators, the Group determined the offline distributors (as opposed to the end users) to be its customers according to ASC 606-10-55-39. The Group has also entered into rebate agreements with offline distributors in order to incentivize the offline distributors to increase their purchases from the Group. The sales rebates are usually calculated as a percentage of the purchase amount, which is accounted for as variable consideration according to ASC 606-10-32-5. In addition, the Group provides cash subsidy to offline distributors for promotional activities in the form of rebate. The amount of subsidy is based on a certain percentage of the cost of specific promotional activities, which varies from activity to activity. These subsidies are payable to the Group’s customers. The Group determined the subsidy should be recorded as a reduction of revenue, according to ASC 606-10-32-25. Accordingly, the Group recognizes revenue from sales to offline distributors upon delivery of the products to offline distributors’ warehouses in an amount equal to the contract sales prices, less applicable allowances for estimated sales rebates and approved subsidies. r) Starting from 2022, the Group sells the product to the offline distributors with Tobacco Monopoly License (“licensed offline distributors”) for products sold in China. The licensed offline distributors make full payment to the Group after receiving the product, the payment period is approximately one month. According to the agreements between the Group and the licensed offline distributors, the licensed offline distributors took control of the products upon receipt but was entitled to certain rights of return and price concession after receipt of products. The Group made estimation for sales returns and price concession based on contract terms and historical patterns. The Group determined the sales return and price concession should be recorded as a reduction of revenue, according to ASC606-10-55-23. Accordingly, the Group recognized revenue from licensed offline distributors upon delivery of the products to licensed offline distributors’ warehouses in an amount equal to the contract sales prices, less applicable allowances for estimated of sales return and price concession. Others For direct sales through offline stores operated by the Group, the Group recognized revenues when goods are delivered to the end users. Contract balances A receivable is recorded when the Group has an unconditional right to consideration. A right to consideration is unconditional if only the passage of time is required before payment of that consideration is due. A contract asset is recorded when the Group has transferred products to the customer before payment is received or is due, and the Group’s right to consideration is conditional on future performance or other factors in the contract. No contract asset was recorded as of December 31, 2022 and 2023. Contract liabilities are recognized if the Group receives consideration in advance of performance, which is mainly in relation to the orders unshipped, where there is still an obligation to be fulfilled by the Group. The contract liabilities will be recognized as revenue when all of the revenue recognition criteria are met. All contract liability balances at the beginning of the years 2021, 2022 and 2023 were recognized as revenue for the years ended December 31, 2021, 2022 and 2023 due to generally short-term duration of contracts. For the years ended December 31, 2021, 2022 and 2023, the Group did not have any revenue recognized from performance obligations satisfied (or partially satisfied) in previous years. Practical Expedients The transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied has not been disclosed, as substantially all the Group’s contracts have a duration of one year or less. Payment terms with licensed offline distributors generally require settlement within 30 days or less. The Group has determined that its contracts generally do not include a significant financing component. |
Cost of revenue | s) Cost of revenues consists primarily of consignment manufacturing costs, material costs, inventories write-downs and depreciation of the machinery and equipment used on production lines, as well as related costs that are directly attributable to the production of products. |
Excise taxes | t) Excise taxes of the Group consist of excise tax imposed on manufacturers of e-cigarettes in China. In October 2022, the Ministry of Finance of the People’s Republic of China, General Administration of Customs of the People’s Republic of China, and State Taxation Administration of the People’s Republic of China jointly issued the Announcement on Imposing Excise Tax on E-cigarettes, pursuant to which e-cigarette manufacturers are subject to excise tax at the rate of 36% on the production or import of e-cigarettes. The excise taxes of the Group are reported on a gross basis and recognized in excise tax on products in the consolidated statements of comprehensive income. |
Product warranty | u) The Group provides product warranty on all e-vapor products sold based on the contracts with its customers at the time of sale of products. The Group accrues a warranty reserve for the products sold, which includes the best estimate of defective rate and projected costs to repair or replace items under warranty. These estimates are primarily based on the estimates of the nature, frequency and average costs of future claims. The warranty reserve is included within the accrued expenses and other current liabilities in the consolidated balance sheets. Warranty cost is recorded as a component of cost of sales in the consolidated statements of comprehensive income. The Group reevaluates the adequacy of the warranty accrual on a regular basis. |
Research and development expenses | v) Research and development expenses primarily consist of salaries, welfare benefits and share-based compensation expenses for research and development personnel as well as material expenses and depreciation of equipment associated with research and development activities. Costs incurred for the preliminary project stage of internal use software are expensed in research and development expenses when incurred. Costs incurred during the application development stage are capitalized when certain criteria are met as stated in ASC 350-40 “Internal-use Software” |
Selling expenses | w) Selling expenses primarily consist of advertising expenses, salaries, welfare benefits and shared-based compensation expenses for sales personnel, and shipping expenses. The advertising expenses amounted to RMB192,541, RMB57,954 and RMB31,899 for the years ended December 31, 2021, 2022 and 2023, respectively. The shipping expenses amounted to RMB67,632, RMB40,710 and RMB8,925 for the years ended December 31, 2021, 2022 and 2023, respectively. |
General and administrative expenses | x) General and administrative expenses primarily consist of salaries, welfare benefits and share-based compensation expenses for general and administrative personnel and professional service fees. |
Subsidy income | y) Subsidy income represents cash subsidies received from the PRC local government by the Group. Such amounts are recognized in others, net in the consolidated statements of comprehensive income upon receipt. The Group recorded RMB197,311, RMB338,112 and RMB124,480 of subsidy income for the years ended December 31, 2021, 2022 and 2023, respectively. |
Share-based compensation | z) Share-based compensation All share-based awards granted to directors, executive officers, employees, consultants and nonemployees who provide services to Relx Inc., including restricted ordinary shares, restricted share units and share options, are measured at fair value on grant date and are classified as equity awards in accordance with ASC 718 — “Compensation-Stock Compensation”. The Group early adopted ASU 2018-07, “Compensation-Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting” on January 2, 2018 (date of inception) to account for share-based payments for acquiring goods and services from nonemployees at grant date fair value. For all share-based awards granted with service conditions that have a graded vesting schedule, share-based compensation expenses are recognized using the straight-line method, over the requisite service period. The Group adopted ASU 2016-09 to recognize the impact of forfeiture within compensation expense, when they occur. Restricted share units and share options granted with a service condition and a performance condition are measured at the grant date fair value. In circumstances where the service inception date precedes the grant date, share-based compensation expenses are measured beginning on the service inception date and is re-measured on each subsequent reporting date before the grant date, based on the estimated fair value of the related awards. Prior to the Share Distribution, all the share options and restricted ordinary shares were granted by Relx Inc. using Relx Inc.’s underlying ordinary shares. The fair value of the ordinary shares of Relx Inc. is determined by using the income approach, with a discount for lack of marketability, given that the shares underlying the awards were not publicly traded. Upon completion of the Share Distribution, the options were granted by the Company using its own underlying ordinary shares. The fair value of the ordinary shares of the Company is equal to its market price. The Group uses the binomial option pricing model to estimate fair value of the share options. The determination of the fair value of share options is affected by the fair value of the underlying ordinary shares as well as assumptions regarding a number of complex and subjective variables, including the expected share price volatility, actual and projected grantee’s share option exercise behavior, risk free interest rates and expected dividends. The shares issued prior to the Share Distribution to directors, executive officers, employees and consultants are those of Relx Inc. and the proportion of the share-based compensation expenses attributable to the Group is accounted for as a capital contribution from Relx Inc. The Company’s share options granted to employees of Relx Inc. in connection with the Share Distribution are recorded as a deemed dividend from the Group to its shareholders at the fair value determined as of the grant date. Refer to Note 19 for details. |
Employee benefits | aa) PRC Contribution Plan Full time employees of the Group in the PRC participate in a government mandated defined contribution plan, pursuant to which certain pension benefits, medical care, employee housing fund and other welfare benefits are provided to the employees. Chinese labor regulations require that the Group make contributions to the government for these benefits based on certain percentages of the employees’ salaries, up to a maximum amount specified by the local government. The Group has no legal obligation for the benefits beyond the regulatory contributions made. The total amounts of such employee benefit expenses, which were expensed as incurred, were approximately RMB75,028, RMB86,666 and RMB49,609 for the years ended December 31, 2021,2022 and 2023, respectively. |
Taxation | ab) Income taxes Current income taxes are provided on the basis of net income for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions. Deferred income taxes are accounted for using an asset and liability method. Under this method, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The tax base of an asset or liability is the amount attributed to that asset or liability for tax purpose. The effect on deferred taxes of a change in tax rates is recognized in the consolidated statement of comprehensive income in the period of change. The Group records a valuation allowance against the amount of deferred tax assets if, based on the weight of available evidence, it is more likely than not that the deferred tax assets will not be realized. Uncertain tax positions The guidance on accounting for uncertainties in income taxes prescribes a more likely than not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Guidance is also provided on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures. Significant judgment is required in evaluating the Group’s uncertain tax positions and determining its provision for income taxes. The Group recognizes interests and penalties, if any, under accrued expenses and other current liabilities on its balance sheet and under others, net in its consolidated statements of comprehensive income. The Group did not recognize any interest and penalties associated with uncertain tax positions for the years ended December 31, 2021, 2022 and 2023. As of December 31, 2022 and 2023, the Group did not have any significant unrecognized uncertain tax positions. |
Related parties | ac) Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or significant influence, such as a family member or relative, shareholder, or a related corporation. |
Statutory reserves | ad) The Company’s subsidiaries, the VIE and subsidiaries of the VIE established in the PRC are required to make appropriations to certain non-distributable reserve funds. In accordance with the laws applicable to the Foreign Investment Enterprises established in the PRC, the Company’s subsidiaries registered as wholly foreign-owned enterprise have to make appropriations from their annual after-tax profits (as determined under generally accepted accounting principles in the PRC (“PRC GAAP”)) to reserve funds including general reserve fund, enterprise expansion fund and staff bonus and welfare fund. The appropriation to the general reserve fund must be at least 10% of the annual after-tax profits calculated in accordance with PRC GAAP. Appropriation is not required if the general reserve fund has reached 50% of the registered capital of the company. Appropriations to the enterprise expansion fund and staff bonus and welfare fund are made at the respective company’s discretion. In addition, in accordance with the PRC Company Laws, the Group’s VIE registered as Chinese domestic company must make appropriations from its annual after-tax profits as determined under the PRC GAAP to non-distributable reserve funds including statutory surplus fund and discretionary surplus fund. The appropriation to the statutory surplus fund must be 10% of the annual after-tax profits as determined under PRC GAAP. Appropriation is not required if the statutory surplus fund has reached 50% of the registered capital of the company. Appropriation to the discretionary surplus fund is made at the discretion of the company. ad) The use of the general reserve fund, enterprise expansion fund, statutory surplus fund and discretionary surplus fund are restricted to offsetting of losses or increasing of the registered capital of the respective company. The staff bonus and welfare fund are liabilities in nature and are restricted to fund payments of special bonus to employees and for the collective welfare of all employees. None of these reserves are allowed to be transferred to the Company in terms of cash dividends, loans or advances, nor can they be distributed except under liquidation. For the years ended December 31, 2021,2022 and 2023, the profit appropriation to statutory surplus fund for the Group’s entities incorporated in the PRC was RMB1,319, RMB25,492 and nil, respectively. No appropriation to other reserve funds was made for any of the periods presented. |
Comprehensive income | ae) Comprehensive income is defined as the change in equity of the Group during a period arising from transactions and other events and circumstances excluding transactions resulting from investments by shareholders and distributions to shareholders. Accumulated other comprehensive income, as presented on the accompanying consolidated balance sheets, mainly consists of accumulated foreign currency translation adjustments, and unrealized (loss)/income on investment securities. |
Segment reporting | af) Based on the criteria established by ASC 280 “Segment Reporting”, the Group’s chief operating decision maker has been identified as its Chief Executive Officer, who reviews consolidated results of the Group when making decisions about allocating resources and assessing performance. For the purpose of internal reporting and management’s operation review, the chief operating decision maker does not segregate the Group’s business by market or product. Hence, the Group has only one operating and reportable segment. The Group primarily generates its revenue from China, for geographical information, please refer to Note 25. |
Concentration and risk | ag) Foreign exchange risk The revenues and expenses of the Group’s entities in the PRC are generally denominated in RMB and their assets and liabilities are denominated in RMB. The RMB is not freely convertible into foreign currencies. Remittances of foreign currencies into the PRC or remittances of RMB out of the PRC as well as exchange between RMB and foreign currencies require approval by foreign exchange administrative authorities with certain supporting documentation. The State Administration for Foreign Exchange, under the authority of the People’s Bank of China, controls the conversion of RMB into other currencies. Credit risk Financial instruments that potentially expose the Group to credit risk consist primarily of cash and cash equivalents, restricted cash, short-term bank deposits, long-term bank deposits, accounts and notes receivable, receivables from online payment platforms, short-term investments, long-term investment securities and amounts due from related parties. The carrying amounts of these financial instruments represent the maximum amount of loss due to credit risk. The Group places its cash and cash equivalents, restricted cash, short-term bank deposits, short-term investments, long-term investment securities and long-term bank deposits in reputable financial institutions with high credit ratings and quality. There has been no recent history of default in relation to these financial institutions and credit risk is immaterial. ag) Concentration and risk (Continued) Accounts and notes receivable and other receivables are typically unsecured and are mainly derived from the ordinary course of business in the PRC. The risk with respect to these financial instruments is mitigated by credit evaluations the Group performs on its customers and its ongoing monitoring processes of outstanding balances. Concentration of customers and suppliers There was revenue from one offline distributor (Distributor A) which represented greater than 10% of the net revenue for the year ended December 31, 2021. There were accounts and notes receivable due from two offline distributors (Distributor B and Distributor C) which individually represented greater than 10% and totally contributed to 28% of the Group’s total accounts and notes receivable as of December 31, 2021. There was revenue from one offline Distributor A which individually represented greater than 10% of the net revenue for the year ended December 31, 2022. There were accounts receivable due from two offline distributors (Distributor D and Distributor E) which individually represented greater than 10% and totally contributed to 33% of the Group’s total accounts and notes receivable as of December 31, 2022. There was no revenue from one offline distributor which individually represented greater than 10% of the net revenue for the year ended December 31, 2023. There were accounts receivable due from four offline distributors (Distributor F, Distributor G, Distributor H and Distributor I) which individually represented greater than 10% and totally contributed to 61% of the Group’s total accounts and notes receivable as of December 31, 2023. There was purchase from one supplier (Supplier A) which represented greater than 10% and contributed to 75% of the total purchases amount for the year ended December 31, 2021 and the corresponding accounts and notes payable due to that supplier represented greater than 10% and contributed to 89% of the Group’s total accounts and notes payable as of December 31, 2021. There was purchase from Supplier A which represented greater than 10% and contributed to 80% of the total purchases amount for the year ended December 31, 2022 and the corresponding accounts and notes payable due to that supplier represented greater than 10% and contributed to 86% of the Group’s total accounts and notes payable as of December 31, 2022. There was purchase from Supplier A which represented greater than 10% and contributed to 58% of the total purchases amount for the year ended December 31, 2023 and the corresponding accounts and notes payable due to that supplier represented greater than 10% and contributed to 74% of the Group’s total accounts and notes payable as of December 31, 2023. |
Allowance for credit losses | ah) Allowance for credit losses On January 1, 2021, the Group adopted ASC 326, Financial Instruments—Credit Losses, which requires recognition of allowances upon origination or acquisition of financial assets at an estimate of expected credit losses over the contractual term of the financial assets (the current expected credit loss or the “CECL” model). The Group’s financial assets subject to the CECL model mainly include short-term bank deposits, long-term bank deposits, short - term and long-term investment securities, accounts and notes receivable, prepayments and other current assets and related party receivables, and the allowance for these financial assets is driven by estimated default rate of underlying receivables. The Group estimates the default rate of receivables on a pool basis by taking into consideration the overall trend of historical delinquency rate and collection rate, correlated industrial and macro-economic factors, and other information deemed relevant in assessing future performance of the receivables portfolio. The Group monitors the delinquency status by vintage of origination and write off delinquent receivables timely when the receivables become uncollectible. Allowance for credit losses of RMB2,562, RMB25,039 and RMB1,615 were recorded in the consolidated statements of comprehensive income during the years ended December 31, 2021, 2022 and 2023. |
Net income per ordinary share | ai) Net income per ordinary share Basic net income per ordinary share is computed by dividing net income attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. For the calculation of diluted net income per ordinary share, the weighted average number of ordinary shares is adjusted by the effect of potential dilutive ordinary shares, including ordinary shares issuable upon the exercise of outstanding share options and restricted share units using the treasury stock method. The effect mentioned above is not included in the calculation of the diluted net income per ordinary share when inclusion of such effect would be anti-dilutive. The shares repurchased by the Company are excluded from the number of shares outstanding for purposes of computing basic and diluted net income per ordinary share in accordance with ASC 260. |
Dividends | aj) Dividends Dividends of the Company are recognized when declared. |
Recently issued accounting pronouncements | ak) Recent accounting pronouncements not yet adopted In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting: Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 requires an enhanced disclosure of significant segment expenses that are regularly provided to the CODM and included in reported segment profit or loss, on an annual and interim basis. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The amendments should be adopted retrospectively to all prior periods presented. Early adoption is permitted. The Group is currently evaluating the impact of adopting this ASU on its consolidated financial statements. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740)-Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The guidance is effective for annual periods beginning after December 15, 2024 on a prospective basis. Early adoption is permitted. The Group is currently evaluating the impact of adopting this ASU on its consolidated financial statements. In March 2024, the FASB issued ASU No. 2024-01, Compensation—Stock Compensation (Topic 718) - Scope Application of Profits Interest and Similar Awards (“ASU 2024-01”). ASU 2024-01 clarifies how to determine whether profits interest and similar awards are in the scope of ASC 718 and applies to all reporting entities that account for profits interest awards as compensation to employees or non-employees. The guidance is effective for annual periods beginning after December 15, 2024 on a prospective basis. Early adoption is permitted. The Group is currently evaluating the impact of adopting this ASU on its consolidated financial statements. |
Nature of operations and reor_2
Nature of operations and reorganizations (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Nature of operations and reorganizations | |
Summary of major subsidiaries, VIE and VIE's subsidiaries | As of December 31, 2023, major subsidiaries, the VIE and VIE’s subsidiaries of Relx HK, the holding company of the PRC Business, were as follows: Percentage of direct or indirect Place of Date of economic incorporation incorporation ownership Principal activities Subsidiaries Beijing Yueke Technology Co., Ltd. Beijing, China October 25, 2018 100 % Investment holding Shanghai Wuke Information Technology Co., Ltd. (“Shanghai Wuke”) Shanghai, China July 26, 2019 100 % Investment holding Mons Co., Ltd Incheon, South Korea June 1, 2020 100 % Selling e‑vapor products VIE Beijing Wuxin Technology Co., Ltd. Beijing, China February 22, 2018 100 % Investment holding Subsidiaries of VIE Shenzhen Wuxin Technology Co., Ltd. Shenzhen, China January 2, 2018 100 % Selling e‑vapor products, research and development Ningbo Wuxin Information Technology Co., Ltd. (“Ningbo Wuxin”) Ningbo, China October 10, 2018 100 % Selling e‑vapor products |
Summary of consolidated financial information of the VIE and its subsidiaries | As of December 31, 2022 2023 RMB RMB Current assets Cash and cash equivalents 956,918 927,097 Restricted cash 20,574 29,718 Short-term bank deposits, net 130,000 99,996 Receivables from online payment platforms 2,817 5,398 Short-term investments, net 2,434,864 2,148,719 Accounts and notes receivable, net 50,259 20,490 Inventories 130,122 72,468 Amounts due from group companies 98,515 129,214 Amounts due from related parties 5,112 102,661 Prepayments and other current assets, net 80,267 112,575 Total current assets 3,909,448 3,648,336 Non ‑ current assets Property, equipment and leasehold improvement, net 75,780 52,102 Intangible assets, net 4,718 53,672 Long-term investments, net 8,000 8,000 Deferred tax assets, net 54,736 42,808 Right-of-use assets, net 57,261 42,529 Long-term bank deposits, net 1,167,325 1,398,376 Other non-current assets, net 10,871 2,599 Total non-current assets 1,378,691 1,600,086 Total assets 5,288,139 5,248,422 Current liabilities Accounts and notes payable 268,761 224,383 Contract liabilities 3,829 11,319 Salary and welfare benefits payable 53,438 19,519 Taxes payable 93,700 36,932 Accrued expenses and other current liabilities 132,762 95,125 Amounts due to group companies 261,729 275,376 Amounts due to related parties 423 — Lease liabilities - current portion 36,905 25,422 Total current liabilities 851,547 688,076 Non-current liabilities Deferred tax liabilities 8,653 7,695 Lease liabilities - non-current portion 30,593 18,092 Total non-current liabilities 39,246 25,787 Total liabilities 890,793 713,863 For the year ended December 31, 2021 December 31, 2022 December 31, 2023 RMB RMB RMB Third-party revenues 8,520,978 5,330,992 1,338,746 Inter-group revenues (i) — 4,533 15,937 Third-party cost of revenues (4,848,190) (2,965,169) (664,660) Inter-group cost of revenues (ii) — (144) (1,268) Excise tax on products — (52,668) (342,354) Third-party operating expenses (1,182,492) (713,520) (484,994) Inter-group operating expenses (iii) (122,568) (459,549) (237,664) Other (expenses)/income (367,311) 132,736 220,220 Net income/(loss) 2,000,417 1,277,211 (156,037) (i) Starting from 2022, the consolidated VIE and its subsidiaries provide operation services to entities within the Group. The inter-group service revenue is eliminated at the consolidated level. (ii) Starting from 2022, the entities within the Group sell products to the consolidated VIE. The inter-group cost of revenues is eliminated at the consolidated level. (iii) The subsidiaries of the Group and the primary beneficiary of the consolidated VIE provide operation supporting services to the consolidated VIE and its subsidiaries. The inter-group service charge is eliminated at the consolidation level. For the year ended December 31, 2021 December 31, 2022 December 31, 2023 RMB RMB RMB Net cash used in operating activities with group company — (512,685) (210,479) Other operating activities 1,842,887 641,865 202,414 Net cash generated from/(used in) operating activities 1,842,887 129,180 (8,065) Loans to group companies (96,058) (450,769) (80,805) Repayment of loans from group companies 191,620 342,000 61,590 Other investing activities (2,755,324) 343,317 53,451 Net cash (used in)/generated from investing activities (2,659,762) 234,548 34,236 Borrowings under loans from group companies — 390,358 543,912 Repayment of borrowings under loans from group companies — (164,408) (590,760) Other financing activities (10,785) (763) — Net cash (used in)/generated from financing activities (10,785) 225,187 (46,848) |
Significant accounting polici_3
Significant accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Significant accounting policies | |
Summary of estimated useful lives of property, equipment and leasehold improvement | Category Estimated useful lives Electronic equipment 3-5 years Furniture and office equipment 3-5 years Machinery and equipment 2-10 years Transportation equipment 5 years Office building 40 years Leasehold improvement The shorter of the term of the lease or the estimated useful lives of the assets |
Summary of estimated useful lives of intangible assets | Category Estimated useful lives License of copyright 2 years Purchased software 2-3 years Trademark 2 years Brands 10 years Channel relations 6 years |
Cash and cash equivalents (Tabl
Cash and cash equivalents (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Cash and cash equivalents | |
Summary of cash and cash equivalents balance | As of December 31, 2022 (As adjusted) 2023 RMB RMB Short‑term bank deposits with initial terms within three months 52,767 155,819 Cash at bank 1,215,745 2,234,479 Cash and cash equivalents 1,268,512 2,390,298 |
Bank deposits, net (Tables)
Bank deposits, net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Bank deposits, net | |
Schedule of bank deposits, net | As of December 31, 2022 (As adjusted) 2023 RMB RMB Short-term bank deposits, net 7,084,879 2,631,256 Long-term bank deposits, net 1,515,428 1,757,804 Total (i) 8,600,307 4,389,060 (i) Bank deposits of RMB154,922 and nil were held as collateral for the Group’s notes payable as of December 31, 2022 and 2023 (Note 14). |
Investment securities (Tables)
Investment securities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Investment securities | |
Schedule of investment securities | As of December 31, 2022 (As adjusted) 2023 RMB RMB Short-term investments_ Fair value option 2,434,864 2,183,862 Short-term investments, net_ Available-for-sale — 561,940 Short-term investments, net_ Held-to-maturity — 347,331 Long-term investment securities, net_ Held-to-maturity 2,851,966 5,236,109 Long-term investment securities, net_ Available-for-sale 557,492 — Total 5,844,322 8,329,242 |
Accounts and notes receivable_2
Accounts and notes receivable, net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounts and notes receivable, net | |
Schedule of accounts and notes receivable, net | As of December 31, 2022 (As adjusted) 2023 RMB RMB Accounts receivable 51,582 63,508 Allowance for doubtful accounts (201) (3,026) Accounts and notes receivable, net 51,381 60,482 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Inventories | |
Schedule of inventories | As of December 31, 2022 (As adjusted) 2023 RMB RMB Finished goods 123,672 117,665 Raw materials 7,229 27,185 Inventories 130,901 144,850 |
Prepayments and other current_2
Prepayments and other current assets, net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Prepayments and other current assets, net | |
Schedule of Prepayments and other current assets, net | As of December 31, 2022 2023 (As adjusted) RMB RMB Value Added Tax (“VAT”) recoverable 38,974 28,597 Prepaid service fees and selling expenses 9,000 7,842 Prepayments to suppliers 4,054 2,700 Deferred charges 452 1,321 Deposits for rental 13,216 11,669 Interest receivable 95,204 446,528 Receivable from financial institution 35,241 1,511 Others 20,893 20,027 Prepayments and other current assets 217,034 520,195 Less: allowance for credit losses (i) (18,102) (11,760) Prepayments and other current assets, net 198,932 508,435 (i) The allowance for credit losses recorded as of December 31, 2022 and 2023 were RMB18,102 and RMB11,760. The movement in the allowance for credit losses were as follow: |
Schedule of movement in the allowance for credit losses | 2022 2023 (As adjusted) RMB RMB Balance as of January 1 154 18,102 Write-off — (6,862) Amounts charged to expenses 17,948 520 Balance as of December 31 18,102 11,760 |
Property, equipment and lease_2
Property, equipment and leasehold improvement, net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, equipment and leasehold improvement, net | |
Schedule of property, equipment and leasehold improvement, net | As of December 31, 2022 2023 (As adjusted) RMB RMB Leasehold improvement 94,336 97,509 Machinery and equipment 121,547 123,142 Land — 8,376 Office building — 8,328 Furniture and office equipment 7,289 6,746 Electronic equipment 2,149 1,809 Transportation equipment 871 1,349 Total property, equipment and leasehold improvement 226,192 247,259 Less: accumulated depreciation (122,033) (154,656) Less: accumulated impairment (16,288) (15,245) Property, equipment and leasehold improvement, net 87,871 77,358 |
Intangible assets, net (Tables)
Intangible assets, net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Intangible assets, net | |
Summary of intangible assets | As of December 31, 2022 2023 (As adjusted) RMB RMB License of copyright 3,530 4,098 Purchased software 19,115 23,264 Trademark 567 44 Brands (i) — 34,522 Channel relations (i) — 32,430 Total intangible assets 23,212 94,358 Less: accumulated amortization (14,283) (23,203) Less: accumulated impairment (1,377) (1,377) Intangible assets, net 7,552 69,778 (i) The brands and channel relations were transferred from SS North Asia as a result of a business combination under common control (refer to Note 1 (e)), and recognized at the historical cost recorded by the former parent of SS North Asia in accordance with ASC 805-50. |
Summary of estimated amortization expenses | Amortization expense of intangible assets RMB 2024 12,885 2025 10,368 2026 9,465 2027 8,858 2028 8,858 Thereafter 19,344 |
Long-term investments, net (Tab
Long-term investments, net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Long-term investments, net. | |
Summary of Group's long term investments | As of December 31, 2022 2023 (As adjusted) RMB RMB Measurement alternative investments: Investee A 1,000 1,000 Investee B 4,000 4,000 Investee C 8,000 8,000 Total measurement alternative investments 13,000 13,000 Less: impairment (5,000) (5,000) Long-term investments, net 8,000 8,000 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill. | |
Schedule of goodwill | As of December 31, 2022 (As adjusted) 2023 RMB RMB Balance as of January 1 — — Addition (i) — 66,506 Balance as of December 31 — 66,506 (i) The goodwill was transferred from SS North Asia as a result of a business combination under common control (refer to Note 1 (e)), and recognized at the historical cost recorded by the former parent of SS North Asia in accordance with ASC 805-50. |
Other non-current assets, net (
Other non-current assets, net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Other non-current assets, net | |
Summary of other non-current assets, net | As of December 31, 2022 2023 (As adjusted) RMB RMB Prepayments on long‑term assets 13,398 6,717 Deposits for rental 6,423 4,183 Other non ‑ current assets 19,821 10,900 Less: impairment (i) (6,363) (6,026) Other non ‑ current assets, net 13,458 4,874 (i) The Group recorded nil, RMB12,591 and RMB72 impairment losses for the years ended December 31, 2021, 2022 and 2023, respectively. |
Accounts and notes payable (Tab
Accounts and notes payable (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounts and notes payable | |
Summary of accounts and notes payable | As of December 31, 2022 2023 (As adjusted) RMB RMB Accounts payable 52,493 109,410 Notes payable (i) 216,853 157,016 Total accounts and notes payable 269,346 266,426 (i) The Group’s notes payable mainly include short-term notes, typically with terms of 91 to 92 days which are provided to the Group’s suppliers and manufacturers. Notes payable as of December 31, 2022 were secured by restricted cash of RMB18,579 and long-term bank deposits of RMB154,922 held in commercial banks. Notes payable as of December 31, 2023 were secured by restricted cash of RMB26,436 held in commercial banks. |
Accrued expenses and other cu_2
Accrued expenses and other current liabilities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accrued expenses and other current liabilities | |
Summary of accrued expenses and other current liabilities | As of December 31, 2022 2023 (As adjusted) RMB RMB Deposits from offline distributors, retailers and others 11,017 9,427 Professional service fee payables 15,154 18,194 Product warranty (i) 5,051 3,208 Payables on equipment 7,020 1,575 Patent application fee payables 1,508 — Accrued liabilities to suppliers 72,909 44,140 Payable related to employees’ exercise of share-based awards 20,509 3,168 Payable related to termination of lease contracts 6,191 — Others 22,096 24,284 Accrued expenses and other current liabilities 161,455 103,996 (i) Product warranty activities were as follows: |
Summary of product warranty activities | Product warranty RMB Balance as of January 1, 2022 (As adjusted) 4,185 Provided during the year 52,693 Utilized during the year (51,827) Balance as of December 31, 2022 (As adjusted) 5,051 Provided during the year 21,116 Utilized during the year (22,959) Balance as of December 31, 2023 3,208 |
Lease (Tables)
Lease (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Lease | |
Summary of supplemental information related to operating leases | As of December 31, 2022 2023 (As adjusted) RMB RMB Lease right‑of‑use assets, net 75,008 52,562 Lease liabilities - current portion 45,955 29,435 Lease liabilities - non-current portion 39,968 24,419 Total lease liabilities 85,923 53,854 Weighted average remaining lease term 2.24 years 1.88 years Weighted average annual discount rate 4.75 % 4.75 % |
Summary of lease cost recognized in the Group's consolidated statements of comprehensive income and supplemental cashflow information related to operating leases | For the year ended December 31, 2021 December 31, 2022 December 31, 2023 (As adjusted) (As adjusted) RMB RMB RMB Operating lease expense 74,869 89,629 54,565 Short‑term lease expense 3,174 5,596 5,430 Total lease cost 78,043 95,225 59,995 |
Summary of supplemental cash flow information for the Group's leases | For the year ended December 31, 2021 December 31, 2022 December 31, 2023 (As adjusted) (As adjusted) RMB RMB RMB Cash payments for operating lease liabilities, included in operating cash flows 68,825 77,189 62,636 Lease liabilities arising from obtaining right‑of‑use assets 152,422 35,311 38,746 Decrease in lease liabilities due to termination of lease contracts — (53,510) (12,657) |
Summary of aggregate future minimum rental payments under non cancelable agreement | Rental RMB 2024 31,106 2025 18,846 2026 6,357 2027 44 2028 13 Total minimum lease payment 56,366 Less: imputed interest (2,512) Total lease liability balance 53,854 |
Income tax expense (Tables)
Income tax expense (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income tax expense | |
Summary of current and deferred components of income taxes | For the year ended December 31, 2021 December 31, 2022 December 31, 2023 (As adjusted) (As adjusted) RMB RMB RMB Current tax expense 646,979 410,478 46,260 Deferred tax (benefit)/expense (15,553) (38,898) 4,495 Income tax expense 631,426 371,580 50,755 |
Summary of reconciliation of the differences between the statutory income tax rate and the Company's effective income tax rate | For the year ended December 31, 2021 December 31, 2022 December 31, 2023 (As adjusted) (As adjusted) % % % Statutory income tax rate of the PRC 25 25 25 Tax effect of permanent differences (i) 2 1 2 Change in valuation allowance 1 — (2) Tax effect of preferential tax rates (1) (1) 1 Effect of income tax in jurisdictions other than the PRC (1) (2) (21) Tax effect of Super Deduction and others (2) (2) 3 Effective income tax rate 24 21 8 (i) The permanent book-tax differences mainly consisted of share-based compensation. |
Schedule of effect of tax holiday | For the year ended December 31, 2021 December 31, 2022 December 31, 2023 (As adjusted) (As adjusted) RMB RMB RMB Tax holiday effect 36,430 24,365 (8,793) Basic net income per share effect 0.03 0.02 (0.01) Diluted net income per share effect 0.03 0.02 (0.01) |
Summary of tax impact of significant temporary differences that give rise to the deferred tax assets and liabilities | As of December 31, 2022 2023 (As adjusted) RMB RMB Deferred tax assets: Net operating tax loss carry forwards 34,306 36,235 Inventory provisions 33,128 23,433 Product warranty 1,263 481 Accrued expenses and others 28,464 17,137 Less: Valuation Allowance (16,145) (3,613) Total deferred tax assets 81,016 73,673 Deferred tax liabilities: Accelerated depreciation of property, equipment and leasehold improvement (18,130) (16,145) Unrealized investment income (7,645) (7,301) Assets arisen from business combination — (15,555) Total deferred tax liabilities (25,775) (39,001) Presentation in the consolidated balance sheet Deferred tax assets 63,894 58,263 Deferred tax liabilities (8,653) (23,591) Net deferred tax assets 55,241 34,672 |
Schedule of movements in the valuation allowance | For the year ended December 31, 2022 December 31, 2023 (As adjusted) RMB RMB Balance as of January 1 15,415 16,145 Addition 730 — Reverse — (12,532) Balance as of December 31 16,145 3,613 |
Revenues (Tables)
Revenues (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Revenues | |
Summary of revenue by channel | For the year ended December 31, 2021 December 31, 2022 December 31, 2023 (As adjusted) (As adjusted) RMB RMB RMB Sales of products by channel - Sales to offline distributors 8,361,073 5,168,559 1,487,084 - Others 159,905 164,220 99,313 Total revenues 8,520,978 5,332,779 1,586,397 |
Share-based compensation (Table
Share-based compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-based compensation | |
Summary of the options granted | Granted (For Purposes of Measuring Share ‑ based Contractually Granted Compensation Expense) As of January 1, 2021 124,660,750 11,271,880 Granted 1,920,500 4,563,790 As of December 31, 2021 126,581,250 15,835,670 Granted — 27,846,178 As of December 31, 2022 126,581,250 43,681,848 Granted 12,012,400 30,811,514 As of December 31, 2023 138,593,650 74,493,362 Weighted Weighted Average Aggregate Average Exercise Remaining Intrinsic Number Price Contractual Life Value of Shares (US$) (Years) (in thousands US$) Outstanding as of January 1, 2021 11,057,510 0.181 8.13 97,280 Granted 4,563,790 0.670 7.87 14,741 Forfeited (1,695,896) 0.222 — — Outstanding as of December 31, 2021 13,925,404 0.336 7.35 49,627 Granted 27,846,178 0.171 7.41 59,041 Forfeited (303,241) 0.780 — — Outstanding as of December 31, 2022 41,468,341 0.171 7.06 88,297 Granted 30,811,514 0.130 6.85 48,251 Exercised (10,802,458) 0.268 — — Forfeited (9,056,467) 0.144 — — Outstanding as of December 31, 2023 52,420,930 0.163 6.62 116,149 Vested and Exercisable as of December 31, 2021 1,115,739 0.009 7.00 4,341 Vested and Exercisable as of December 31, 2022 11,126,832 0.200 6.24 23,361 Vested and Exercisable as of December 31, 2023 6,221,650 0.190 5.48 11,263 |
Summary of the restricted share units (RSU) activity under the 2021 Plan | Granted (For Purposes of Measuring Share-based Contractually Granted Compensation Expense) As of December 31, 2021 8,514,375 — Granted 22,467,333 4,434,659 Forfeited — (80,321) As of December 31, 2022 30,981,708 4,354,338 Granted 9,514,319 2,471,222 Vested — (458,719) Forfeited — (3,413,780) As of December 31, 2023 40,496,027 2,953,061 |
Summary of assumptions used in the option pricing model | For the year ended December 31, 2021 December 31, 2022 December 31, 2023 Risk-free interest rate 1.01%~1.74% 3.93%~3.99% 3.55%~4.18% Expected terms (in years) 7~9 5~8 5~8 Expected volatility 50.33%~53.78 % 86.07%~87.99% 77.50%~87.20% Expected dividend yield — — — Fair value of underlying ordinary share (US$) 3.9 2.3 2.0 |
Summary of restricted shares activity | Weighted ‑ Average Number of Restricted Grant Date Shares Granted Fair Value US$ Outstanding as of January 1, 2020 65,571,473 0.09 Granted — — Vested (40,982,171) 0.09 Forfeited — — Outstanding as of December 31, 2020 24,589,302 0.09 Granted — — Vested (24,589,302) 0.09 Forfeited — — Outstanding as of December 31, 2021 — — (*) The share-based compensation expenses discussed below only include the expenses attributable to the Group. |
Net income per ordinary share (
Net income per ordinary share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Net income per ordinary share | |
Schedule of basic and diluted net income per ordinary share | For the year ended December 31, December 31, December 31, 2021 2022 2023 (As adjusted) (As adjusted) RMB RMB RMB Numerator: Net income attributable to RLX Technology Inc. 2,024,713 1,441,219 534,328 Numerator for basic and diluted net income per ordinary share 2,024,713 1,441,219 534,328 Denominator: Weighted average number of ordinary shares (i) 1,401,371,494 1,319,732,802 1,311,401,901 Denominator used for net income per ordinary share - basic 1,401,371,494 1,319,732,802 1,311,401,901 Adjustments for dilutive options and RSUs 8,319,385 8,411,290 29,043,752 Denominator for net income per ordinary share - diluted 1,409,690,879 1,328,144,092 1,340,445,653 Net income per ordinary share - Basic 1.445 1.092 0.407 - Diluted 1.436 1.085 0.399 |
Related party transactions (Tab
Related party transactions (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Related party transactions | |
Schedule of the major related parties and their relationship | Related parties Relationship with the Group Relx Inc. and entities within Relx Inc.’s operations Under common control of beneficial owner Sunnyheart Inc. and entities within Sunnyheart Inc.’s operations Under common control of beneficial owner Ms. Ying (Kate) Wang Shareholder of Relx Inc., shareholder of Sunnyheart Inc., Chief Executive Officer of the Group |
Schedule of major related parties transactions | (a) Major related parties’ transactions were as follows: For the year ended December 31, 2021 December 31, 2022 December 31, 2023 (As adjusted) (As adjusted) RMB RMB RMB Expenses allocated from/(to) related parties: - Share-based compensation expenses allocated from Relx Inc. (i) 474,132 — — - Expenses allocated to Relx Inc.’s operations (ii) — (4,883) (13,370) - Expenses allocated from Relx Inc.’s operations (ii) — 399 2,696 Sales to related parties : - Entity within Relx Inc.’s operations (iii) 42,267 66,752 293,530 Purchase from related parties : - Entity within Relx Inc.’s operations (iv) — — 71,156 - Others — — 1,212 Other transactions with related parties : - Redemption of long-term investments by Relx Inc. and Sunnyheart Inc. (v) — — 588,872 Total 516,399 62,268 944,096 (i) Prior to the Share Distribution, share-based compensation expenses were incurred by Relx Inc. and were allocated and pushed down to the Group’s consolidated statements of comprehensive income. These allocations were based on percentage of revenue between the Group and Relx Inc.’s operations. Refer to Notes 1 and 19. (ii) Certain employees concurrently worked for the Group and Relx Inc.’s operations, staff costs and related expenses were shared by the Group and Relx Inc.’s operations. A portion of these staff costs and related expenses was allocated to/from Relx Inc.’s operations. (iii) Since June 2021, the Group has sold certain raw materials and finished goods to entities within Relx Inc.’s operations, in the ordinary course of the Group’s operating activities. (iv) In 2023, the Group has purchased certain finished goods from entities within Relx Inc.’s operations, in the ordinary course of the Group’s operating activities. (v) In September 2023, the Group purchased certain shares of its affiliated entities from several third-party selling shareholders. In December 2023, along with the updates in the Group’s international expansion plan, the previously acquired share investments were redeemed by its two affiliated entities. The difference between consideration received and the carrying amount of equity investments disposed was recognized as investment income in the consolidated statements of comprehensive income. (b) The Gro up also received financing from and provided financing to related parties as follows: For the year ended December 31, 2021 December 31, 2022 December 31, 2023 (As adjusted) (As adjusted) RMB RMB RMB Financing (received from)/provided to related parties: - Financing proceeds received from Relx Inc.’s operations and Sunnyheart Inc.’s operations (i) — — (41,107) - Funds paid back to Relx Inc. (ii) 11,174 — — - Investment prepayment returned from Relx Inc. (iii) (21,006) — — - Others — — (327) Total (9,832) — (41,434) (i) In 2023, prior to the business combination (refer to Note 1 (e)), entities within Relx Inc.’s operations and Sunnyheart Inc.’s operations provided certain fundings to SS North Asia, Sunnyheart and Relx Indonesia to support their business. Such related party transactions of the acquired businesses were included in the Group’s consolidated financial statements retrospectively. (ii) After the First Reorganization, as Relx Inc. raised US$ proceeds from its equity financing, Relx Inc. provided funding to the Group to support the Group’s business. These fund advances were accounted for as increase to amounts due to related parties. During the years ended December 31, 2021, 2022 and 2023, the Group received funds of nil , nil and nil from Relx Inc. and paid back RMB 11,174 , nil and nil , respectively. (iii) The Group made investment prepayment to an investee on behalf of Relx Inc., as the investee was setting up its overseas holding structure to enable Relx Inc. to hold the investee’s overseas shares. This prepayment was accounted for as an increase to amount due from the related parties as of December 31, 2019. The prepayment was returned to the Group in March 2021. |
Schedule of major balances with related parties | As of December 31, 2022 2023 (As adjusted) RMB RMB Amounts due from related parties Current - Expenses allocated to Relx Inc.’s operations 5,112 7,980 - Sales of products to related party — 97,326 - Others (i) — 13,430 Total 5,112 118,736 Amounts due to related parties Current - Expenses allocated from Relx Inc.’s operations (423) (5,411) - Purchase from related parties — (55,311) - Funds received from related parties — (41,107) - Others — (98) Total (423) (101,927) (i) Others mainly include claimed amount for obsolete goods sold by entities within Relx Inc.’s operations in 2023. |
Fair value measurement (Tables)
Fair value measurement (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair value measurement | |
Schedule of assets that are measured at fair value on a recurring basis | Level 1 Level 2 Level 3 RMB RMB RMB As of December 31, 2023 Short-term investments_ Fair value option (i) — 2,183,862 — Short-term investments, net_ Available-for-sale (ii) — 561,940 — As of December 31, 2022 (As adjusted) Short-term investments_ Fair value option (i) — 2,434,864 — Long-term investment securities, net_ Available-for-sale (i) — 557,492 — (i) The Group classifies the short-term and long-term investment securities as held-to-maturity or available-for-sale, whose classification determines the respective accounting methods stipulated by ASC 320. For certain investment securities, the Company elects the fair value option at the date of initial recognition and carries these investments subsequently at fair value. (ii) The Group values these investment securities classified as available-for-sale with fair value option elected based on quoted prices of similar products provided by banks at the end of each year, and accordingly, the Group classifies the valuation techniques that use these inputs as Level 2. |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and contingencies | |
Schedule of future minimum commitments under non cancelable agreements | As of December 31, 2023, future minimum commitments under non-cancelable agreements were as follows: Rental RMB 2024 4,220 |
Geographic information (Tables)
Geographic information (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Geographic information | |
Schedule of geographic information | For the year ended December 31, 2021 (As adjusted) December 31, 2022 (As adjusted) December 31, 2023 RMB RMB RMB Total Revenue: China 8,520,978 5,332,779 1,357,884 International — — 228,513 8,520,978 5,332,779 1,586,397 |
Nature of operations and reor_3
Nature of operations and reorganizations - First Reorganization (Details) | May 18, 2018 item |
Nature of operations and reorganizations | |
Preferred Share Financing, Number of Investors | 2 |
Nature of operations and reor_4
Nature of operations and reorganizations - Second Reorganization (Details) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 | Jan. 12, 2021 | Jan. 11, 2021 | Nov. 25, 2020 | Sep. 25, 2020 | Jan. 02, 2018 |
Nature of operations and reorganizations | |||||||
Ordinary shares, shares authorized | 15,000,000,000 | 15,000,000,000 | 15,000,000,000 | 5,000,000,000 | 500,000,000 | 500,000,000 | |
Ordinary shares, shares issued | 1,570,790,570 | 1,570,790,570 | 143,681,557 | 2 | 1 | ||
Ordinary shares, shares outstanding | 143,681,557 | 2 | 1 | ||||
Ordinary shares, par value (in USD per share) | $ 0.00001 | $ 0.00001 | $ 0.00001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Relx HK | |||||||
Nature of operations and reorganizations | |||||||
Equity interests (as a percent) | 100% |
Nature of operations and reor_5
Nature of operations and reorganizations - Summary of major subsidiaries, VIE and VIE's subsidiaries (Details) | Dec. 31, 2023 |
Beijing Yueke Technology Co., Ltd. | |
Nature of operations and reorganizations | |
Percentage of direct or indirect economic ownership (as a percent) | 100% |
Shanghai Wuke Information Technology Co., Ltd. ("Shanghai Wuke") | |
Nature of operations and reorganizations | |
Percentage of direct or indirect economic ownership (as a percent) | 100% |
Mons Co., Ltd | |
Nature of operations and reorganizations | |
Percentage of direct or indirect economic ownership (as a percent) | 100% |
Beijing Wuxin Technology Co., Ltd. | |
Nature of operations and reorganizations | |
Percentage of direct or indirect economic ownership (as a percent) | 100% |
Shenzhen Wuxin Technology Co., Ltd. | |
Nature of operations and reorganizations | |
Percentage of direct or indirect economic ownership (as a percent) | 100% |
Ningbo Wuxin Information Technology Co., Ltd. ("Ningbo Wuxin") | |
Nature of operations and reorganizations | |
Percentage of direct or indirect economic ownership (as a percent) | 100% |
Nature of operations and reor_6
Nature of operations and reorganizations - Share splits and waiver of amount due to the Parent (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands | Jan. 12, 2021 USD ($) shares | Jan. 11, 2021 USD ($) $ / shares shares | Nov. 25, 2020 CNY (¥) shares | Dec. 31, 2023 CNY (¥) shares | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 CNY (¥) shares | Dec. 31, 2022 $ / shares | Nov. 25, 2020 $ / shares | Sep. 25, 2020 $ / shares shares | Jan. 02, 2018 $ / shares shares | |||
Nature of operations and reorganizations | |||||||||||||
Issuance of ordinary shares upon Initial Public Offering ("IPO") (in shares) | 143,681,555 | ||||||||||||
Ordinary shares, shares issued | 143,681,557 | 1,570,790,570 | 1,570,790,570 | 1,570,790,570 | 2 | 1 | |||||||
Ordinary shares, shares outstanding | 143,681,557 | 2 | 1 | ||||||||||
Ordinary share, par value | $ / shares | $ 0.00001 | $ 0.00001 | $ 0.00001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||
Share split ratio | 10 | ||||||||||||
Common stock, value | $ 150 | $ 50 | ¥ 104 | [1] | $ 15 | [1] | ¥ 104 | [1],[2] | |||||
Ordinary shares authorized | 15,000,000,000 | 5,000,000,000 | 15,000,000,000 | 15,000,000,000 | 15,000,000,000 | 500,000,000 | 500,000,000 | ||||||
Net amount due to the Parent waived | ¥ | ¥ 600,000 | ||||||||||||
Class B ordinary shares | |||||||||||||
Nature of operations and reorganizations | |||||||||||||
Ordinary shares, shares issued | 308,714,990 | 308,714,990 | |||||||||||
Share split ratio | 1 | ||||||||||||
Re-designate ordinary shares | 1,436,815,570 | ||||||||||||
[1] As of December 31, 2022, there were 1,570,790,570 ordinary shares issued, par value US $0.00001 per share, including 257,720,484 ordinary shares that consist of treasury shares held by the Company’s depositary bank and shares reserved for future exercise of share-based awards. As of December 31, 2023, there were 1,570,790,570 ordinary shares issued, par value US $0.00001 per share, including 299,188,826 ordinary shares that consist of treasury shares held by the Company’s depositary bank and shares reserved for future exercise of share-based awards. The Company acquired various companies on December 13, 2023, which was accounted for as an under common control transaction in accordance with ASC 805-50. The Company retrospectively adjusted the above comparative consolidated balance sheets in prior year. Refer |
Nature of operations and reor_7
Nature of operations and reorganizations - Share distribution (Details) | Apr. 16, 2021 shares |
Class A ordinary shares | |
Nature of operations and reorganizations | |
Number of shares distribution | 952,618,780 |
Class B ordinary shares | |
Nature of operations and reorganizations | |
Percentage of voting power of the Company's total issued | 86.60% |
Beneficial Ownership | Class B ordinary shares | |
Nature of operations and reorganizations | |
Percentage of voting power of the Company's total issued | 39.40% |
Relx Holdings Limited | Class B ordinary shares | |
Nature of operations and reorganizations | |
Number of shares distribution | 618,171,790 |
Nature of operations and reor_8
Nature of operations and reorganizations - VIE arrangements between Relx HK's PRC subsidiaries (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Equity Interest Pledge Agreement | |
Nature of operations and reorganizations | |
Initial term of agreement (in years) | 10 years |
Exclusive Business Cooperation Agreement | |
Nature of operations and reorganizations | |
Initial term of agreement (in years) | 10 years |
Exclusive Option Agreement | |
Nature of operations and reorganizations | |
Initial term of agreement (in years) | 10 years |
Exclusive Assets Option Agreement | |
Nature of operations and reorganizations | |
Initial term of agreement (in years) | 10 years |
Nature of operations and reor_9
Nature of operations and reorganizations - Consolidated financial information of the VIE and its subsidiaries (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2023 USD ($) | |||
Current assets | |||||||
Cash and cash equivalents | ¥ 2,390,298 | ¥ 1,268,512 | [1] | ¥ 5,208,967 | [1] | $ 336,666 | |
Restricted cash | 29,760 | 20,574 | [1] | 500 | [1] | 4,192 | |
Short-term bank deposits, net | 2,631,256 | 7,084,879 | 370,605 | ||||
Receivables from online payment platforms | 6,893 | 3,000 | 971 | ||||
Short-term investments, net | 3,093,133 | 2,434,864 | 435,659 | ||||
Accounts and notes receivable, net | 60,482 | 51,381 | 8,519 | ||||
Inventories | 144,850 | 130,901 | 20,402 | ||||
Prepayments and other current assets, net | 508,435 | 198,932 | 71,612 | ||||
Total current assets | 8,983,843 | 11,198,155 | 1,265,350 | ||||
Non-current assets | |||||||
Property, equipment and leasehold improvement, net | 77,358 | 87,871 | 10,896 | ||||
Intangible assets, net | 69,778 | 7,552 | 9,828 | ||||
Long-term investments, net | 8,000 | 8,000 | 1,127 | ||||
Deferred tax assets, net | 58,263 | 63,894 | 8,206 | ||||
Right-of-use assets, net | 52,562 | 75,008 | 7,403 | ||||
Long-term bank deposits, net | 1,757,804 | 1,515,428 | 247,582 | ||||
Other non-current assets, net | 4,874 | 13,458 | 686 | ||||
Total non-current assets | 7,331,254 | 5,180,669 | 1,032,586 | ||||
Total assets | 16,315,097 | 16,378,824 | 2,297,936 | ||||
Current liabilities | |||||||
Accounts and notes payable | 266,426 | 269,346 | [1] | 37,525 | |||
Contract liabilities | 49,586 | 75,226 | [1] | 6,984 | |||
Salary and welfare benefits payable | 39,256 | 127,749 | [1] | 5,529 | |||
Taxes payable | 77,164 | 109,676 | [1] | 10,868 | |||
Accrued expenses and other current liabilities | 103,996 | 161,455 | [1] | 14,648 | |||
Lease liabilities - current portion | 29,435 | 45,955 | [1] | 4,146 | |||
Total current liabilities | 668,671 | 789,830 | [1] | 94,180 | |||
Non-current liabilities | |||||||
Deferred tax liabilities | 23,591 | 8,653 | [1] | 3,323 | |||
Lease liabilities - non-current portion | 24,419 | 39,968 | [1] | 3,439 | |||
Total non-current liabilities | 48,010 | 48,621 | [1] | 6,762 | |||
Total liabilities | 716,681 | 838,451 | [1] | 100,942 | |||
Net revenues | 1,586,397 | $ 223,439 | 5,332,779 | [2] | 8,520,978 | [2] | |
Cost of revenues | 856,329 | 120,611 | 2,974,981 | [2] | 4,848,918 | [2] | |
Excise tax on products | (342,354) | (48,220) | (52,668) | [2] | |||
Operating expenses | (884,424) | (124,568) | (1,241,719) | [2] | (1,373,355) | [2] | |
Net income | 540,988 | 76,196 | 1,408,732 | [1],[2] | 2,028,124 | [1],[2] | |
Net cash provided by operating activities | 198,703 | 27,987 | 486,829 | [1] | 1,799,892 | [1] | |
Net cash (used in)/ generated from investing activities | 2,091,145 | 294,532 | (4,133,040) | [1] | (7,870,660) | [1] | |
Net cash generated from/(used in) financing activities | (1,193,216) | $ (168,061) | (477,270) | [1] | 9,904,121 | [1] | |
Related Party | |||||||
Current assets | |||||||
Amounts due from related parties | 118,736 | 5,112 | 16,724 | ||||
Current liabilities | |||||||
Amounts due to related parties | 101,927 | 423 | [1] | $ 14,356 | |||
VIE | |||||||
Current assets | |||||||
Cash and cash equivalents | 927,097 | 956,918 | |||||
Restricted cash | 29,718 | 20,574 | |||||
Short-term bank deposits, net | 99,996 | 130,000 | |||||
Receivables from online payment platforms | 5,398 | 2,817 | |||||
Short-term investments, net | 2,148,719 | 2,434,864 | |||||
Accounts and notes receivable, net | 20,490 | 50,259 | |||||
Inventories | 72,468 | 130,122 | |||||
Amounts due from group companies | 129,214 | 98,515 | |||||
Prepayments and other current assets, net | 112,575 | 80,267 | |||||
Total current assets | 3,648,336 | 3,909,448 | |||||
Non-current assets | |||||||
Property, equipment and leasehold improvement, net | 52,102 | 75,780 | |||||
Intangible assets, net | 53,672 | 4,718 | |||||
Long-term investments, net | 8,000 | 8,000 | |||||
Deferred tax assets, net | 42,808 | 54,736 | |||||
Right-of-use assets, net | 42,529 | 57,261 | |||||
Long-term bank deposits, net | 1,398,376 | 1,167,325 | |||||
Other non-current assets, net | 2,599 | 10,871 | |||||
Total non-current assets | 1,600,086 | 1,378,691 | |||||
Total assets | 5,248,422 | 5,288,139 | |||||
Current liabilities | |||||||
Accounts and notes payable | 224,383 | 268,761 | |||||
Contract liabilities | 11,319 | 3,829 | |||||
Salary and welfare benefits payable | 19,519 | 53,438 | |||||
Taxes payable | 36,932 | 93,700 | |||||
Accrued expenses and other current liabilities | 95,125 | 132,762 | |||||
Amounts due to group companies | 275,376 | 261,729 | |||||
Lease liabilities - current portion | 25,422 | 36,905 | |||||
Total current liabilities | 688,076 | 851,547 | |||||
Non-current liabilities | |||||||
Deferred tax liabilities | 7,695 | 8,653 | |||||
Lease liabilities - non-current portion | 18,092 | 30,593 | |||||
Total non-current liabilities | 25,787 | 39,246 | |||||
Total liabilities | 713,863 | 890,793 | |||||
Excise tax on products | (342,354) | (52,668) | |||||
Other (expenses)/income | 220,220 | 132,736 | (367,311) | ||||
Net income | (156,037) | 1,277,211 | 2,000,417 | ||||
Net cash used in operating activities with group company | (210,479) | (512,685) | |||||
Other operating activities | 202,414 | 641,865 | 1,842,887 | ||||
Net cash provided by operating activities | (8,065) | 129,180 | 1,842,887 | ||||
Loans to group companies | (80,805) | (450,769) | (96,058) | ||||
Repayment of loans from group companies | 61,590 | 342,000 | 191,620 | ||||
Other investing activities | (53,451) | (343,317) | 2,755,324 | ||||
Net cash (used in)/ generated from investing activities | 34,236 | 234,548 | (2,659,762) | ||||
Borrowings under loans from group companies | 543,912 | 390,358 | |||||
Repayment of borrowings under loans from group companies | (590,760) | (164,408) | |||||
Other financing activities | 763 | 10,785 | |||||
Net cash generated from/(used in) financing activities | (46,848) | 225,187 | (10,785) | ||||
VIE | Related Party | |||||||
Current assets | |||||||
Amounts due from related parties | 102,661 | 5,112 | |||||
Current liabilities | |||||||
Amounts due to related parties | 0 | 423 | |||||
VIE | Third-party | |||||||
Non-current liabilities | |||||||
Net revenues | 1,338,746 | 5,330,992 | 8,520,978 | ||||
Cost of revenues | 664,660 | 2,965,169 | 4,848,190 | ||||
Operating expenses | 484,994 | 713,520 | 1,182,492 | ||||
VIE | Inter-group | |||||||
Non-current liabilities | |||||||
Net revenues | 15,937 | 4,533 | |||||
Cost of revenues | 1,268 | 144 | |||||
Operating expenses | ¥ 237,664 | ¥ 459,549 | ¥ 122,568 | ||||
[1] The Company acquired various companies on December 13, 2023, which was accounted for as an under common control transaction in accordance with ASC 805-50. The Company retrospectively adjusted the above comparative consolidated balance sheets in prior year. Refer The Company acquired various companies on December 13, 2023, which was accounted for as an under common control transaction in accordance with ASC 805-50. The Company retrospectively adjusted the above comparative consolidated statements of comprehensive income in prior years. Refer to Note 1 (e) for detailed information. |
Nature of operations and reo_10
Nature of operations and reorganizations - Business combination (Details) - Business Combination ¥ in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | |
Nature of operations and reorganizations | ||
Equity interests (as a percent) | 100% | 100% |
Business combination consideration transferred | ¥ 173,274 | $ 24,362 |
Significant accounting polici_4
Significant accounting policies - Convenience translation (Details) | Dec. 31, 2023 $ / ¥ |
Convenience translation | |
Noon buying rate | 7.0999 |
Significant accounting polici_5
Significant accounting policies - Investments and Accounts and notes receivable, net (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |||
Significant accounting policies | ||||||
Impairment recorded for long-term investments | ¥ 0 | $ 0 | ¥ 4,000 | [1] | ¥ 0 | [1] |
Allowance for doubtful accounts | ¥ 2,884 | ¥ 201 | ¥ 141 | |||
[1] The Company acquired various companies on December 13, 2023, which was accounted for as an under common control transaction in accordance with ASC 805-50. The Company retrospectively adjusted the above comparative consolidated balance sheets in prior year. Refer |
Significant accounting polici_6
Significant accounting policies - Property equipment and leasehold improvement, net (Details) | Dec. 31, 2023 |
Transportation equipment | |
Significant accounting policies | |
Estimated useful lives (in years) | 5 years |
Office building | |
Significant accounting policies | |
Estimated useful lives (in years) | 40 years |
Minimum | Electronic equipment | |
Significant accounting policies | |
Estimated useful lives (in years) | 3 years |
Minimum | Furniture and office equipment | |
Significant accounting policies | |
Estimated useful lives (in years) | 3 years |
Minimum | Machinery and equipment | |
Significant accounting policies | |
Estimated useful lives (in years) | 2 years |
Maximum | Electronic equipment | |
Significant accounting policies | |
Estimated useful lives (in years) | 5 years |
Maximum | Furniture and office equipment | |
Significant accounting policies | |
Estimated useful lives (in years) | 5 years |
Maximum | Machinery and equipment | |
Significant accounting policies | |
Estimated useful lives (in years) | 10 years |
Significant accounting polici_7
Significant accounting policies - Intangible assets (Details) | Dec. 31, 2023 |
License of copyright | |
Significant accounting policies | |
Estimated useful lives (in years) | 2 years |
Trademark | |
Significant accounting policies | |
Estimated useful lives (in years) | 2 years |
Brands | |
Significant accounting policies | |
Estimated useful lives (in years) | 10 years |
Channel relations | |
Significant accounting policies | |
Estimated useful lives (in years) | 6 years |
Minimum | Purchased software | |
Significant accounting policies | |
Estimated useful lives (in years) | 2 years |
Maximum | Purchased software | |
Significant accounting policies | |
Estimated useful lives (in years) | 3 years |
Significant accounting polici_8
Significant accounting policies - Impairment of long-lived assets other than goodwill (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Impairment of long lived assets | |||
Impairment loss | ¥ 0 | ¥ 0 | ¥ 0 |
Impairment charge | ¥ 5,080 | ¥ 42,529 | ¥ 0 |
Significant accounting polici_9
Significant accounting policies - Lease (Details) | Dec. 31, 2023 |
Minimum | |
Significant accounting policies | |
Term of lease (in months) | 1 month |
Maximum | |
Significant accounting policies | |
Term of lease (in months) | 60 months 15 days |
Significant accounting polic_10
Significant accounting policies - Revenue recognition (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Significant accounting policies | |||
Contract asset | ¥ 0 | ¥ 0 | |
Revenue, Remaining Performance Obligation, Optional Exemption, Performance Obligation [true false] | true | ||
Payment terms (in days) | 30 days | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01 | |||
Significant accounting policies | |||
Payment period of licensed offline distributors (in months) | 1 month |
Significant accounting polic_11
Significant accounting policies - Additional details (Details) ¥ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Oct. 31, 2022 | Dec. 31, 2023 CNY (¥) segment | Dec. 31, 2023 USD ($) segment | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |||
Selling expenses | |||||||
Advertising expenses | ¥ 31,899 | ¥ 57,954 | ¥ 192,541 | ||||
Shipping expenses | 8,925 | 40,710 | 67,632 | ||||
Subsidy income. | |||||||
Subsidy income | 124,480 | 338,112 | 197,311 | ||||
Employee benefits | |||||||
Total amounts of employee benefits expenses incurred | ¥ 49,609 | 86,666 | 75,028 | ||||
Statutory reserves. | |||||||
Minimum percentage of general reserve fund | 10% | 10% | |||||
Maximum percentage of general reserve fund | 50% | 50% | |||||
Minimum percentage of statutory surplus fund | 10% | 10% | |||||
Maximum percentage of statutory surplus fund | 50% | 50% | |||||
Profit appropriation to statutory surplus fund | ¥ 25,492 | 1,319 | 0 | ||||
Segment reporting | |||||||
Number of operating segment | segment | 1 | 1 | |||||
Provision for Loan and Lease Losses | |||||||
Provision for credit losses | ¥ 1,615 | $ 227 | 25,039 | [1] | 2,562 | [1] | |
Unrecognized tax benefits, interest on income taxes expense | ¥ 0 | ¥ 0 | ¥ 0 | ||||
Exercise taxes | 36% | ||||||
[1] The Company acquired various companies on December 13, 2023, which was accounted for as an under common control transaction in accordance with ASC 805-50. The Company retrospectively adjusted the above comparative consolidated balance sheets in prior year. Refer |
Significant accounting polic_12
Significant accounting policies - Concentration and risk (Details) | 12 Months Ended | ||
Dec. 31, 2023 Distributor customer | Dec. 31, 2022 Distributor | Dec. 31, 2021 Distributor item | |
Revenue | Customer concentration | Offline distributor A | |||
Significant accounting policies | |||
Number of distributor | 1 | 1 | 1 |
Accounts and notes receivable | Credit concentration | Offline distributor | |||
Significant accounting policies | |||
Number of distributor | 2 | 2 | |
Number of customer | customer | 4 | ||
Total concentration risk | 61% | 33% | 28% |
Purchases | Supplier concentration | One supplier A | |||
Significant accounting policies | |||
Number of suppliers | item | 1 | ||
Total concentration risk | 58% | 80% | 75% |
Accounts and notes payable due | Supplier concentration | One supplier A | |||
Significant accounting policies | |||
Total concentration risk | 74% | 86% | 89% |
Cash and cash equivalents (Deta
Cash and cash equivalents (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | [1] | |
Cash and cash equivalents | ||||||
Shortterm bank deposits with initial terms within three months | ¥ 155,819 | ¥ 52,767 | ||||
Cash at bank | 2,234,479 | 1,215,745 | ||||
Cash and cash equivalents | ¥ 2,390,298 | $ 336,666 | ¥ 1,268,512 | [1] | ¥ 5,208,967 | |
[1] The Company acquired various companies on December 13, 2023, which was accounted for as an under common control transaction in accordance with ASC 805-50. The Company retrospectively adjusted the above comparative consolidated balance sheets in prior year. Refer |
Bank deposits, net (Details)
Bank deposits, net (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) |
Short-term bank deposits, net | ¥ 2,631,256 | $ 370,605 | ¥ 7,084,879 |
Long-term bank deposits, net | 1,757,804 | $ 247,582 | 1,515,428 |
Total | 4,389,060 | 8,600,307 | |
Allowance for credit losses | 2,408 | 5,559 | |
Short-term bank deposits | |||
Assets pledged to secure notes payable | ¥ 0 | ¥ 154,922 |
Investment securities (Details)
Investment securities (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Investment securities | ||
Investment securities | ¥ 8,329,242 | ¥ 5,844,322 |
Allowance for credit losses | 5,213 | 3,739 |
Available-for-sale | ||
Investment securities | ||
Investment securities | 561,940 | |
Held-to-maturity | ||
Investment securities | ||
Investment securities | 347,331 | |
Long-term investment securities | Held-to-maturity | ||
Investment securities | ||
Investment securities | 5,236,109 | 2,851,966 |
Long-term investment securities | Available-for-sale | ||
Investment securities | ||
Investment securities | 557,492 | |
Short-term investments | ||
Investment securities | ||
Investment securities | ¥ 2,183,862 | ¥ 2,434,864 |
Accounts and notes receivable_3
Accounts and notes receivable, net (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) |
Accounts and notes receivable, net | |||
Accounts receivable | ¥ 63,508 | ¥ 51,582 | |
Allowance for doubtful accounts | (3,026) | (201) | |
Accounts and notes receivable, net | ¥ 60,482 | $ 8,519 | ¥ 51,381 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) |
Inventories | ||||
Finished goods | ¥ 117,665 | ¥ 123,672 | ||
Raw materials | 27,185 | 7,229 | ||
Inventories | 144,850 | $ 20,402 | 130,901 | |
Write-downs of inventories | ¥ 35,695 | ¥ 179,694 | ¥ 89,071 |
Prepayments and other current_3
Prepayments and other current assets, net - Schedule of prepayments and other current assets, net (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) |
Prepayments and other current assets, net | ||||
Value Added Tax ("VAT") recoverable | ¥ 28,597 | ¥ 38,974 | ||
Prepaid service fees and selling expenses | 7,842 | 9,000 | ||
Prepayments to suppliers | 2,700 | 4,054 | ||
Deferred charges | 1,321 | 452 | ||
Deposits for rental | 11,669 | 13,216 | ||
Interest receivable | 446,528 | 95,204 | ||
Receivable from financial institution | 1,511 | 35,241 | ||
Others | 20,027 | 20,893 | ||
Prepayments and other current assets | 520,195 | 217,034 | ||
Less: allowance for credit losses | (11,760) | (18,102) | ¥ (154) | |
Prepayments and other current assets, net | ¥ 508,435 | $ 71,612 | ¥ 198,932 |
Prepayments and other current_4
Prepayments and other current assets - Additional Information (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Prepayments and other current assets, net | |||
Allowance for credit losses recorded | ¥ 11,760 | ¥ 18,102 | ¥ 154 |
Prepayments and other current_5
Prepayments and other current assets - Schedule of movements in the allowance of prepayments and other current assets for credit losses (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Prepayments and other current assets, net | ||
Balance as of January 1 | ¥ 18,102 | ¥ 154 |
Write-off | (6,862) | |
Amounts charged to expenses | 520 | 17,948 |
Balance as of December 31 | ¥ 11,760 | ¥ 18,102 |
Property, equipment and lease_3
Property, equipment and leasehold improvement, net - Schedule of property, equipment and leasehold improvement, net (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2023 USD ($) | |||
Property, Plant and Equipment [Line Items] | |||||||
Total property, equipment and leasehold improvement | ¥ 247,259 | ¥ 226,192 | |||||
Less: accumulated depreciation | (154,656) | (122,033) | |||||
Less: accumulated impairment | (15,245) | (16,288) | |||||
Property, equipment and leasehold improvement, net | 77,358 | 87,871 | $ 10,896 | ||||
Depreciation expense | 37,622 | $ 5,299 | 76,041 | [1] | ¥ 40,865 | [1] | |
Impairment of other non-current assets | 5,008 | 28,561 | ¥ 0 | ||||
Leasehold improvement | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Total property, equipment and leasehold improvement | 97,509 | 94,336 | |||||
Machinery and equipment | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Total property, equipment and leasehold improvement | 123,142 | 121,547 | |||||
Land | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Total property, equipment and leasehold improvement | 8,376 | ||||||
Office building | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Total property, equipment and leasehold improvement | 8,328 | ||||||
Furniture and office equipment | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Total property, equipment and leasehold improvement | 6,746 | 7,289 | |||||
Electronic equipment | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Total property, equipment and leasehold improvement | 1,809 | 2,149 | |||||
Transportation equipment | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Total property, equipment and leasehold improvement | ¥ 1,349 | ¥ 871 | |||||
[1] The Company acquired various companies on December 13, 2023, which was accounted for as an under common control transaction in accordance with ASC 805-50. The Company retrospectively adjusted the above comparative consolidated balance sheets in prior year. Refer |
Intangible assets, net - Group
Intangible assets, net - Group Intangible assets (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2023 USD ($) | |||
Intangible assets, net | |||||||
Total intangible assets | ¥ 94,358 | ¥ 23,212 | |||||
Less: accumulated amortization | (23,203) | (14,283) | |||||
Less: accumulated impairment | (1,377) | (1,377) | |||||
Intangible assets, net | 69,778 | 7,552 | $ 9,828 | ||||
Amortization expense | 8,892 | $ 1,252 | 5,367 | [1] | ¥ 4,774 | [1] | |
Impairment losses on intangible assets | 0 | 1,377 | ¥ 0 | ||||
License of copyright | |||||||
Intangible assets, net | |||||||
Total intangible assets | 4,098 | 3,530 | |||||
Purchased software | |||||||
Intangible assets, net | |||||||
Total intangible assets | 23,264 | 19,115 | |||||
Trademark | |||||||
Intangible assets, net | |||||||
Total intangible assets | 44 | ¥ 567 | |||||
Brands | |||||||
Intangible assets, net | |||||||
Total intangible assets | 34,522 | ||||||
Channel relations | |||||||
Intangible assets, net | |||||||
Total intangible assets | ¥ 32,430 | ||||||
[1] The Company acquired various companies on December 13, 2023, which was accounted for as an under common control transaction in accordance with ASC 805-50. The Company retrospectively adjusted the above comparative consolidated balance sheets in prior year. Refer |
Intangible assets, net - Amorti
Intangible assets, net - Amortization expenses (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) |
Estimated amortization expenses | |||
2024 | ¥ 12,885 | ||
2025 | 10,368 | ||
2026 | 9,465 | ||
2027 | 8,858 | ||
2028 | 8,858 | ||
Thereafter | 19,344 | ||
Intangible assets, net | ¥ 69,778 | $ 9,828 | ¥ 7,552 |
Long-term investments, net- Gro
Long-term investments, net- Group long-term investments (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) |
Long-term investments, net | |||
Total measurement alternative investments | ¥ 13,000 | ¥ 13,000 | |
Less: impairment | (5,000) | (5,000) | |
Long-term investments, net | 8,000 | $ 1,127 | 8,000 |
Investee A | |||
Long-term investments, net | |||
Total measurement alternative investments | 1,000 | 1,000 | |
Investee B | |||
Long-term investments, net | |||
Total measurement alternative investments | 4,000 | 4,000 | |
Investee C | |||
Long-term investments, net | |||
Total measurement alternative investments | ¥ 8,000 | ¥ 8,000 |
Long-term investments, net - Ad
Long-term investments, net - Additional Information (Details) ¥ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||
Mar. 31, 2021 CNY (¥) | Jul. 31, 2019 CNY (¥) | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | [1] | Dec. 31, 2021 CNY (¥) | [1] | |
Long-term investments, net | ||||||||
Cash consideration | ¥ 430,788 | $ 60,675 | ¥ 8,000 | |||||
Impairment recorded for long-term investments | ¥ 0 | $ 0 | ¥ 4,000 | ¥ 0 | ||||
Investee A | ||||||||
Long-term investments, net | ||||||||
Equity interests acquired (as a percent) | 13.34% | |||||||
Cash consideration | ¥ 1,000 | |||||||
Investee B | ||||||||
Long-term investments, net | ||||||||
Equity interests acquired (as a percent) | 20% | |||||||
Cash consideration | ¥ 4,000 | |||||||
Investee C | ||||||||
Long-term investments, net | ||||||||
Equity interests acquired (as a percent) | 5% | |||||||
Cash consideration | ¥ 8,000 | |||||||
[1] The Company acquired various companies on December 13, 2023, which was accounted for as an under common control transaction in accordance with ASC 805-50. The Company retrospectively adjusted the above comparative consolidated balance sheets in prior year. Refer |
Goodwill (Details)
Goodwill (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
Goodwill. | ||||
Addition | ¥ 66,506 | |||
Balance as of December 31 | 66,506 | $ 9,367 | ||
Impairment charges | ¥ 0 | ¥ 0 | ¥ 0 |
Other non-current assets, net_2
Other non-current assets, net (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2023 USD ($) | |
Other non-current assets, net | ||||
Prepayments on long-term assets | ¥ 6,717 | ¥ 13,398 | ||
Deposits for rental | 4,183 | 6,423 | ||
Other non-current asset | 10,900 | 19,821 | ||
Less: impairment | (6,026) | (6,363) | ||
Other non-current assets | 4,874 | 13,458 | $ 686 | |
Impairment loss on other non-current assets | ¥ 72 | ¥ 12,591 | ¥ 0 |
Accounts and notes payable (Det
Accounts and notes payable (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | ||
Accounts and notes payable | ||||
Accounts payable | ¥ 109,410 | ¥ 52,493 | ||
Notes payable(a) | 157,016 | 216,853 | ||
Total accounts and notes payable | 266,426 | $ 37,525 | 269,346 | [1] |
Restricted cash | ||||
Accounts and notes payable | ||||
Notes payable secured by restricted cash | 18,579 | |||
Notes payable secured by short-term investments | 26,436 | |||
Long-term bank deposits | ||||
Accounts and notes payable | ||||
Notes payable(a) | 154,922 | |||
Short-term bank deposits | ||||
Accounts and notes payable | ||||
Assets pledged to secure notes payable | ¥ 0 | ¥ 154,922 | ||
Minimum | ||||
Accounts and notes payable | ||||
Terms of short-term notes payable (in days) | 91 days | |||
Maximum | ||||
Accounts and notes payable | ||||
Terms of short-term notes payable (in days) | 92 days | |||
[1] The Company acquired various companies on December 13, 2023, which was accounted for as an under common control transaction in accordance with ASC 805-50. The Company retrospectively adjusted the above comparative consolidated balance sheets in prior year. Refer |
Accrued expenses and other cu_3
Accrued expenses and other current liabilities - Accrued expenses and other current liabilities (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | |
Accrued expenses and other current liabilities | ||||
Deposits from offline distributors, retailers and others | ¥ 9,427 | ¥ 11,017 | ||
Professional service fee payables | 18,194 | 15,154 | ||
Product warranty | 3,208 | 5,051 | ||
Payables on equipment | 1,575 | 7,020 | ||
Patent application fee payables | 1,508 | |||
Accrued liabilities to suppliers | 44,140 | 72,909 | ||
Payable related to employees' exercise of share-based awards | 3,168 | 20,509 | ||
Payable related to termination of lease contracts | 6,191 | |||
Others | 24,284 | 22,096 | ||
Accrued expenses and other current liabilities | ¥ 103,996 | $ 14,648 | ¥ 161,455 | [1] |
[1] The Company acquired various companies on December 13, 2023, which was accounted for as an under common control transaction in accordance with ASC 805-50. The Company retrospectively adjusted the above comparative consolidated balance sheets in prior year. Refer |
Accrued expenses and other cu_4
Accrued expenses and other current liabilities - Product warranty activities (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Product warranty activities | ||
Balance at the beginning | ¥ 5,051 | ¥ 4,185 |
Provided during the year | 21,116 | 52,693 |
Utilized during the year | (22,959) | (51,827) |
Balance at the end | ¥ 3,208 | ¥ 5,051 |
Lease - Supplemental informatio
Lease - Supplemental information related to operating leases (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | |
Lease | ||||
Lease right-of-use assets, net | ¥ 52,562 | $ 7,403 | ¥ 75,008 | |
Lease liabilities - current portion | 29,435 | 4,146 | 45,955 | [1] |
Lease liabilities - non-current portion | 24,419 | $ 3,439 | 39,968 | [1] |
Total lease liability balance | ¥ 53,854 | ¥ 85,923 | ||
Weighted average remaining lease term | 1 year 10 months 17 days | 1 year 10 months 17 days | 2 years 2 months 26 days | |
Weighted average annual discount rate | 4.75% | 4.75% | 4.75% | |
[1] The Company acquired various companies on December 13, 2023, which was accounted for as an under common control transaction in accordance with ASC 805-50. The Company retrospectively adjusted the above comparative consolidated balance sheets in prior year. Refer |
Lease - Summary of lease cost r
Lease - Summary of lease cost recognized in statements of comprehensive (loss) income (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Summary of lease cost | |||
Operating lease expense | ¥ 54,565 | ¥ 89,629 | ¥ 74,869 |
Short-term lease expense | 5,430 | 5,596 | 3,174 |
Total lease cost | ¥ 59,995 | ¥ 95,225 | ¥ 78,043 |
Lease - Supplemental cash flow
Lease - Supplemental cash flow information related to operating leases (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Lease | |||
Cash payments for operating lease liabilities, included in operating cash flows | ¥ 62,636 | ¥ 77,189 | ¥ 68,825 |
Lease liabilities arising from obtaining right-of-use assets | 38,746 | 35,311 | ¥ 152,422 |
Decrease in lease liabilities due to termination of lease contracts | ¥ (12,657) | ¥ (53,510) |
Lease - Additional Information
Lease - Additional Information (Details) | Dec. 31, 2023 |
Minimum | |
Lease | |
Remaining lease terms for operating leases (in months) | 1 month |
Maximum | |
Lease | |
Remaining lease terms for operating leases (in months) | 52 months |
Lease - Aggregate future minimu
Lease - Aggregate future minimum rental payments (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Aggregate future minimum rental payments under non cancelable agreement | ||
2024 | ¥ 31,106 | |
2025 | 18,846 | |
2026 | 6,357 | |
2027 | 44 | |
2028 | 13 | |
Total minimum lease payment | 56,366 | |
Less: imputed interest | (2,512) | |
Total lease liability balance | ¥ 53,854 | ¥ 85,923 |
Income tax expense - Additional
Income tax expense - Additional Information (Details) ¥ in Thousands, ₩ in Millions | 12 Months Ended | ||||
Dec. 31, 2023 KRW (₩) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 | Dec. 31, 2018 | Dec. 31, 2023 CNY (¥) | |
Income tax | |||||
Statutory tax rate (as a percent) | 25% | 25% | 25% | ||
High and New Technology Enterprise | Shenzhen Wuxin Technology Co., Ltd. [Member] | |||||
Income tax | |||||
Preferential tax rate | 15% | ||||
Cayman Islands | |||||
Income tax | |||||
Withholding tax | ¥ | ¥ 0 | ||||
Hong Kong | |||||
Income tax | |||||
Statutory tax rate (as a percent) | 16.50% | ||||
Withholding income tax on dividends distributed two | 5% | ||||
Hong Kong | Minimum [Member] | |||||
Income tax | |||||
Withholding income tax on dividends distributed two | 10% | ||||
Hong Kong | Maximum [Member] | |||||
Income tax | |||||
Withholding income tax on dividends distributed two | 15% | ||||
PRC | |||||
Income tax | |||||
Statutory tax rate (as a percent) | 25% | ||||
Additional tax deduction on qualified research and development expenses (as a percent) | 75% | 75% | 50% | ||
Additional tax deduction on qualified research and development expenses in certain qualified manufacture industry (as a percent) | 100% | ||||
Withholding income tax on dividends distributed one | 10% | ||||
Percentage of share in FIE for withholding tax at a rate of no more than five percent | 25% | ||||
Undistributed earnings and reserves for distribution | ¥ | ¥ 3,153,855 | 2,832,451 | |||
Withholding income tax for undistributed earnings of subsidiaries | ¥ | 0 | 0 | |||
Unrecognized tax liabilities | ¥ | ¥ 315,386 | ¥ 283,245 | |||
Shenzhen | |||||
Income tax | |||||
Preferential tax rate | 15% | ||||
Korea | |||||
Income tax | |||||
Withholding income tax on dividends distributed one | 20% | ||||
Korea | First Korean won (KRW) 200 million | |||||
Income tax | |||||
Statutory tax rate (as a percent) | 9% | ||||
Assessable income for taxable rate | ₩ 200 | ||||
Korea | Taxable income over KRW200 million up to KRW20 billion | |||||
Income tax | |||||
Statutory tax rate (as a percent) | 19% | ||||
Korea | Taxable income over KRW20 billion up to KRW300 billion | |||||
Income tax | |||||
Statutory tax rate (as a percent) | 21% | ||||
Korea | Taxable income over KRW300 billion | |||||
Income tax | |||||
Statutory tax rate (as a percent) | 24% | ||||
Korea | Minimum [Member] | |||||
Income tax | |||||
Local income tax rate, percentage | 0.90% | ||||
Korea | Minimum [Member] | Taxable income over KRW200 million up to KRW20 billion | |||||
Income tax | |||||
Assessable income for taxable rate | ₩ 20,000 | ||||
Korea | Minimum [Member] | Taxable income over KRW20 billion up to KRW300 billion | |||||
Income tax | |||||
Assessable income for taxable rate | ₩ 20,000 | ||||
Korea | Maximum [Member] | |||||
Income tax | |||||
Local income tax rate, percentage | 2.40% | ||||
Korea | Maximum [Member] | Taxable income over KRW200 million up to KRW20 billion | |||||
Income tax | |||||
Assessable income for taxable rate | ₩ 200 | ||||
Korea | Maximum [Member] | Taxable income over KRW20 billion up to KRW300 billion | |||||
Income tax | |||||
Assessable income for taxable rate | ₩ 300,000 | ||||
Indonesia | |||||
Income tax | |||||
Statutory tax rate (as a percent) | 0.50% |
Income tax expense - Current an
Income tax expense - Current and deferred components of income taxes (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |||
Current and deferred components of income taxes | ||||||
Current tax expense | ¥ 46,260 | ¥ 410,478 | ¥ 646,979 | |||
Deferred tax (benefit)/expense | 4,495 | $ 633 | (38,898) | [1] | (15,553) | [1] |
Income tax expense | ¥ 50,755 | $ 7,149 | ¥ 371,580 | [2] | ¥ 631,426 | [2] |
[1] The Company acquired various companies on December 13, 2023, which was accounted for as an under common control transaction in accordance with ASC 805-50. The Company retrospectively adjusted the above comparative consolidated balance sheets in prior year. Refer The Company acquired various companies on December 13, 2023, which was accounted for as an under common control transaction in accordance with ASC 805-50. The Company retrospectively adjusted the above comparative consolidated statements of comprehensive income in prior years. Refer to Note 1 (e) for detailed information. |
Income tax expense - Reconcilia
Income tax expense - Reconciliation of the differences between the statutory income tax rate and the effective income tax rate (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of the differences between the statutory income tax rate and the Company's effective income tax rate | |||
Statutory income tax rate of the PRC | 25% | 25% | 25% |
Tax effect of permanent differences | 2% | 1% | 2% |
Change in valuation allowance | (2.00%) | 0% | 1% |
Tax effect of preferential tax rates | 1% | (1.00%) | (1.00%) |
Effect of income tax in jurisdictions other than the PRC | (21.00%) | (2.00%) | (1.00%) |
Tax effect of Super Deduction and others | 3% | (2.00%) | (2.00%) |
Effective income tax rate | 8% | 21% | 24% |
Income tax expense - Tax holida
Income tax expense - Tax holiday (Details) - CNY (¥) ¥ / shares in Units, ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income tax expense | |||
Tax holiday effect | ¥ 8,793 | ¥ 24,365 | ¥ 36,430 |
Basic | |||
Income tax expense | |||
Net income per share effect | ¥ 0.01 | ¥ 0.02 | ¥ 0.03 |
Diluted | |||
Income tax expense | |||
Net income per share effect | ¥ 0.01 | ¥ 0.02 | ¥ 0.03 |
Income tax expense - Deferred t
Income tax expense - Deferred tax assets and deferred tax liabilities (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
Deferred tax assets: | |||||
Net operating tax loss carry forwards | ¥ 36,235 | ¥ 34,306 | |||
Inventory write-downs | 23,433 | 33,128 | |||
Product warranty | 481 | 1,263 | |||
Accrued expenses and others | 17,137 | 28,464 | |||
Less: Valuation Allowance | (3,613) | (16,145) | ¥ (15,415) | ||
Total deferred tax assets, net | 73,673 | 81,016 | |||
Deferred tax liabilities: | |||||
Accelerated depreciation of property, equipment and leasehold improvement | (16,145) | (18,130) | |||
Unrealized investment income | (7,301) | (7,645) | |||
Assets arisen from business combination | (15,555) | ||||
Total deferred tax liabilities | (39,001) | (25,775) | |||
Presentation in the consolidated balance sheet: | |||||
Deferred tax assets, net | 58,263 | $ 8,206 | 63,894 | ||
Deferred tax liabilities | (23,591) | $ (3,323) | (8,653) | [1] | |
Net deferred tax assets | ¥ 34,672 | ¥ 55,241 | |||
[1] The Company acquired various companies on December 13, 2023, which was accounted for as an under common control transaction in accordance with ASC 805-50. The Company retrospectively adjusted the above comparative consolidated balance sheets in prior year. Refer |
Income tax expense - Valuation
Income tax expense - Valuation allowance (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income tax expense | ||
Balance as of January 1 | ¥ 16,145 | ¥ 15,415 |
Addition | 12,532 | 730 |
Balance as of December 31 | ¥ 3,613 | ¥ 16,145 |
Revenues (Details)
Revenues (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |||
Revenues | ||||||
Total revenues | ¥ 1,586,397 | $ 223,439 | ¥ 5,332,779 | [1] | ¥ 8,520,978 | [1] |
Sales to offline distributors | ||||||
Revenues | ||||||
Total revenues | 1,487,084 | 5,168,559 | 8,361,073 | |||
Others | ||||||
Revenues | ||||||
Total revenues | ¥ 99,313 | ¥ 164,220 | ¥ 159,905 | |||
[1] The Company acquired various companies on December 13, 2023, which was accounted for as an under common control transaction in accordance with ASC 805-50. The Company retrospectively adjusted the above comparative consolidated statements of comprehensive income in prior years. Refer to Note 1 (e) for detailed information. |
Share-based compensation (Detai
Share-based compensation (Details) ¥ in Thousands | 12 Months Ended | |||||||||||
Nov. 01, 2022 CNY (¥) | Nov. 01, 2022 $ / shares | Apr. 16, 2021 shares | Jan. 12, 2021 | Jan. 11, 2021 | Dec. 28, 2020 shares | Dec. 31, 2023 CNY (¥) installment | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | Apr. 30, 2019 shares | Feb. 28, 2019 shares | Sep. 30, 2018 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Sharebased compensation expense | ¥ | ¥ 362,868 | ¥ 166,161 | ¥ 223,345 | |||||||||
Share split ratio | 10 | |||||||||||
Class B ordinary shares | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Share split ratio | 1 | |||||||||||
Parent Incentive Plans | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Sharebased compensation expense | ¥ | ¥ 362,868 | ¥ 166,161 | ¥ 211,947 | |||||||||
Contractual term (in years) | 10 years | |||||||||||
Share split ratio | 10 | 10 | ||||||||||
Exercise price per share | $ / shares | $ 0 | |||||||||||
Incremental cost of modification | ¥ | ¥ 22,307 | |||||||||||
Parent Incentive Plans | Minimum | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Vesting period (in years) | 4 years | |||||||||||
Equal annual installments for vesting | installment | 4 | |||||||||||
Parent Incentive Plans | Maximum | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Vesting period (in years) | 7 years | |||||||||||
Equal annual installments for vesting | installment | 7 | |||||||||||
Parent Incentive Plans | Class B ordinary shares | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Number of shares available for issuance | 22,493,577 | 22,493,577 | 22,493,577 | |||||||||
Parent Incentive Plans | Class A ordinary shares | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Number of shares available for issuance | 224,935,770 | |||||||||||
Number of additional shares authorized | 57,472,620 | |||||||||||
2021 Plan | Class A ordinary shares | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Number of shares available for issuance | 22,493,577 | |||||||||||
Number of additional shares authorized | 5,747,262 |
Share based compensation - Summ
Share based compensation - Summary of options granted (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Contractually Granted - beginning balance | 126,581,250 | 126,581,250 | 124,660,750 | |
Granted | 12,012,400 | 1,920,500 | ||
Forfeited | (9,056,467) | |||
Contractually Granted - ending balance | 138,593,650 | 126,581,250 | 126,581,250 | 124,660,750 |
Granted (for Purpose of Measuring Share-based Compensation Expense) - beginning balance | 43,681,848 | 15,835,670 | 11,271,880 | |
Granted | 30,811,514 | 27,846,178 | 4,563,790 | |
Forfeited | (303,241) | (1,695,896) | ||
Granted (for Purpose of Measuring Share-based Compensation Expense) - ending balance | 74,493,362 | 43,681,848 | 15,835,670 | 11,271,880 |
Number of Shares | ||||
Beginning balance | 41,468,341 | 13,925,404 | 11,057,510 | |
Granted | 30,811,514 | 27,846,178 | 4,563,790 | |
Exercised | (10,802,458) | |||
Forfeited | (303,241) | (1,695,896) | ||
Ending balance | 52,420,930 | 41,468,341 | 13,925,404 | 11,057,510 |
Vested and exercisable | 6,221,650 | 11,126,832 | 1,115,739 | |
Weighted Average Exercise Price | ||||
Beginning balance | $ 0.171 | $ 0.336 | $ 0.181 | |
Granted | 0.130 | 0.171 | 0.670 | |
Exercised | 0.268 | |||
Forfeited | 0.144 | 0.780 | $ 0.222 | |
Ending balance | 0.163 | 0.171 | 0.336 | $ 0.181 |
Vested and exercisable | $ 0.190 | $ 0.200 | $ 0.009 | |
Weighted average remaining contractual life (years) | ||||
Weighted average remaining contractual life | 6 years 7 months 13 days | 7 years 21 days | 7 years 4 months 6 days | 8 years 1 month 17 days |
Granted | 6 years 10 months 6 days | 7 years 4 months 28 days | 7 years 10 months 13 days | |
Vested and exercisable | 5 years 5 months 23 days | 6 years 2 months 26 days | 7 years | |
Aggregate intrinsic value | ||||
Beginning balance | $ 88,297 | $ 49,627 | $ 97,280 | |
Granted | 48,251 | 59,041 | 14,741 | |
Ending balance | 116,149 | 88,297 | 49,627 | $ 97,280 |
Vested and exercisable | $ 11,263 | $ 23,361 | $ 4,341 | |
Nonemployees | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Outstanding share options held by non - employees | 7,817,866 | 5,973,185 | ||
Restricted Share Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Forfeited | (80,321) | |||
Number of Shares | ||||
Forfeited | (80,321) |
Share-based compensation - Summ
Share-based compensation - Summary of the restricted share units (RSU) activity under the 2021 Plan (Details) - shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Forfeited | (9,056,467) | |
Restricted share units (RSU) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Contractually Granted - Beginning balance | 30,981,708 | 8,514,375 |
Granted | 9,514,319 | 22,467,333 |
Contractually Granted - Ending balance | 40,496,027 | 30,981,708 |
Granted (For Purposes of Measuring Share-based Compensation Expense) - Beginning balance | 4,354,338 | |
Granted | 2,471,222 | |
Forfeited | (3,413,780) | 4,434,659 |
Vested | (458,719) | |
Granted (For Purposes of Measuring Share-based Compensation Expense) - Ending balance | 2,953,061 | 4,354,338 |
Share-based compensation - Ince
Share-based compensation - Incentive Plans (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Sharebased compensation expense | ¥ 362,868 | ¥ 166,161 | ¥ 223,345 |
Exercised | 10,802,458 | ||
Parent Incentive Plans | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Sharebased compensation expense | ¥ 362,868 | ¥ 166,161 | ¥ 211,947 |
Unrecognized compensation expense | ¥ 563,615 | ||
Unrecognized compensation cost is expected to be recognized over a weighted-average period (in years) | 1 year 3 months 7 days | ||
Equity Incentive Plans | Stock option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares options vested | 5,897,276 | 10,011,093 | 1,115,739 |
Exercised | 11,364,636 | 9,648,928 | 0 |
Equity Incentive Plans | Restricted Share Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares options vested | 469,719 | 0 | 0 |
Share-based compensation - Opti
Share-based compensation - Option pricing model (Details) - Parent Incentive Plans - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk free interest rate, minimum (as a percent) | 3.55% | 3.93% | 1.01% |
Risk free interest rate, maximum (as a percent) | 4.18% | 3.99% | 1.74% |
Expected volatility, minimum (as a percent) | 77.50% | 86.07% | 50.33% |
Expected volatility, maximum (as a percent) | 87.20% | 87.99% | 53.78% |
Fair value of underlying ordinary share of the Parent (US$) | $ 2 | $ 2.3 | $ 3.9 |
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected terms (in years) | 5 years | 5 years | 7 years |
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected terms (in years) | 8 years | 8 years | 9 years |
Share-based compensation - Rest
Share-based compensation - Restriction of the Parent's ordinary shares held by the Founding Members (Details) ¥ in Thousands | 1 Months Ended | 12 Months Ended | ||||||
Dec. 17, 2020 CNY (¥) | May 18, 2018 | Jan. 31, 2021 CNY (¥) shares | Dec. 31, 2023 CNY (¥) shares | Dec. 31, 2022 CNY (¥) shares | Dec. 31, 2021 CNY (¥) shares | Dec. 31, 2021 $ / shares | Dec. 31, 2020 $ / shares shares | |
Weighted-Average Grant Date Fair Value | ||||||||
Sharebased compensation expense | ¥ | ¥ 362,868 | ¥ 166,161 | ¥ 223,345 | |||||
Restricted shares | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Impact on the awards' fair value | ¥ | ¥ 0 | |||||||
Number of Shares | ||||||||
Beginning balance | 24,589,302 | 24,589,302 | 65,571,473 | |||||
Vested | 0 | 0 | (24,589,302) | (40,982,171) | ||||
Ending balance | 24,589,302 | |||||||
Weighted-Average Grant Date Fair Value | ||||||||
Beginning balance | $ / shares | $ 0.09 | $ 0.09 | ||||||
Vested | $ / shares | $ 0.09 | 0.09 | ||||||
Ending balance | $ / shares | $ 0.09 | |||||||
Vested | 0 | 0 | 24,589,302 | 40,982,171 | ||||
Sharebased compensation expense | ¥ | ¥ 11,398 | ¥ 0 | ¥ 0 | ¥ 11,398 | ||||
Restricted shares | Second anniversary of grant date | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting percentage | 50% | |||||||
Restricted shares | Year 1 after the second anniversary of grant date | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting percentage | 25% | |||||||
Restricted shares | Year 2 after the second anniversary of grant date | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting percentage | 25% |
Share-based compensation - Shar
Share-based compensation - Share Based Compensation Related to Parent's Series D Financing (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||||
Nov. 25, 2020 shares | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | [1] | Dec. 31, 2021 CNY (¥) | [1] | |
Share-based compensation | |||||||
Number of shares issued | 143,681,555 | ||||||
Share-based compensation expenses | ¥ 362,868 | $ 51,108 | ¥ 166,161 | ¥ 223,345 | |||
[1] The Company acquired various companies on December 13, 2023, which was accounted for as an under common control transaction in accordance with ASC 805-50. The Company retrospectively adjusted the above comparative consolidated balance sheets in prior year. Refer |
Shareholders' equity (Details)
Shareholders' equity (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||||||||||
Nov. 25, 2020 $ / shares shares | Nov. 30, 2023 CNY (¥) | Nov. 30, 2023 USD ($) $ / shares | Jan. 31, 2021 USD ($) shares | Dec. 31, 2023 CNY (¥) Vote shares | Dec. 31, 2023 USD ($) Vote shares | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 $ / shares | Dec. 31, 2022 CNY (¥) shares | Dec. 08, 2021 USD ($) | Jan. 11, 2021 $ / shares | Sep. 25, 2020 $ / shares shares | Jan. 02, 2018 $ / shares shares | ||
Shareholders' equity | ||||||||||||||||
Ordinary shares, shares issued | 143,681,557 | 1,570,790,570 | 1,570,790,570 | 1,570,790,570 | 2 | 1 | ||||||||||
Ordinary share, par value | $ / shares | $ 0.0001 | $ 0.00001 | $ 0.00001 | $ 0.00001 | $ 0.0001 | $ 0.0001 | ||||||||||
Ordinary share par or stated value before shares split | $ / shares | $ 0.0001 | |||||||||||||||
Conversion ratio of Class B ordinary shares to Class A ordinary share | 1 | 1 | ||||||||||||||
Number of shares issued | 143,681,555 | |||||||||||||||
Proceeds from issuance of ordinary share upon IPO, net of issuance costs | $ 1,553,000 | ¥ 10,042,422 | [1] | |||||||||||||
Authorized amount per share repurchase program | $ | $ 500,000 | |||||||||||||||
Share repurchase (in shares) | 95,700,000 | 95,700,000 | ||||||||||||||
Share repurchase | ¥ | ¥ 996,628 | ¥ 500,370 | ¥ 127,516 | |||||||||||||
Amount of capped call options purchased | $ | $ 100,600 | |||||||||||||||
Minimum percentage of general reserve fund | 10% | 10% | ||||||||||||||
Maximum percentage of general reserve fund | 50% | 50% | ||||||||||||||
Net assets restricted | ¥ 71,724 | $ 10,102 | ¥ 73,571 | |||||||||||||
Proceeds from sale of treasury stock | 209,500 | $ 29,500 | ||||||||||||||
Treasury stock reissued | 199,500 | $ 27,900 | ||||||||||||||
Dividend | ¥ | ¥ 93,265 | |||||||||||||||
Ordinary shares | ||||||||||||||||
Shareholders' equity | ||||||||||||||||
Dividends Payable | $ / shares | $ 0.01 | |||||||||||||||
Class A ordinary shares | ||||||||||||||||
Shareholders' equity | ||||||||||||||||
Ordinary shares, shares issued | 1,262,075,580 | 1,262,075,580 | ||||||||||||||
Number of votes entitled for each share | Vote | 1 | 1 | ||||||||||||||
Class A ordinary shares | IPO | ||||||||||||||||
Shareholders' equity | ||||||||||||||||
Number of shares issued | 133,975,000 | |||||||||||||||
Class B ordinary shares | ||||||||||||||||
Shareholders' equity | ||||||||||||||||
Ordinary shares, shares issued | 308,714,990 | 308,714,990 | ||||||||||||||
Number of votes entitled for each share | Vote | 10 | 10 | ||||||||||||||
Converted ordinary shares issued | 0 | 0 | 309,456,800 | |||||||||||||
ADS | ||||||||||||||||
Shareholders' equity | ||||||||||||||||
Share repurchase (in shares) | 95,700,000 | 95,700,000 | ||||||||||||||
Share repurchase | $ | $ 188,500 | |||||||||||||||
Dividend | ¥ 93,265 | $ 13,035 | ||||||||||||||
ADS | IPO | ||||||||||||||||
Shareholders' equity | ||||||||||||||||
Number of shares issued | 133,975,000 | |||||||||||||||
[1] The Company acquired various companies on December 13, 2023, which was accounted for as an under common control transaction in accordance with ASC 805-50. The Company retrospectively adjusted the above comparative consolidated balance sheets in prior year. Refer |
Net income per ordinary share_2
Net income per ordinary share (Details) ¥ / shares in Units, ¥ in Thousands | 12 Months Ended | |||||||
Jan. 11, 2021 | Nov. 25, 2020 shares | Dec. 31, 2023 $ / shares | Dec. 31, 2023 CNY (¥) ¥ / shares shares | Dec. 31, 2022 CNY (¥) ¥ / shares shares | Dec. 31, 2021 CNY (¥) ¥ / shares shares | |||
Net income per ordinary share | ||||||||
Additional shares issued for share split (in shares) | 143,681,555 | |||||||
Share split ratio | 10 | |||||||
Numerator: | ||||||||
Net (loss)/income attributable to RLX Technology Inc. | ¥ | ¥ 534,328 | ¥ 1,441,219 | ¥ 2,024,713 | |||||
Numerator for basic and diluted net (loss)/income per ordinary share (Basic) | ¥ | 534,328 | 1,441,219 | 2,024,713 | |||||
Numerator for basic and diluted net (loss)/income per ordinary share (Diluted) | ¥ | ¥ 534,328 | ¥ 1,441,219 | ¥ 2,024,713 | |||||
Denominator: | ||||||||
Weighted average number of ordinary shares | 1,311,401,901 | 1,319,732,802 | [1] | 1,401,371,494 | [1] | |||
Adjustments for dilutive options and RSUs | 29,043,752 | 8,411,290 | 8,319,385 | |||||
Denominator for net (loss)/income per ordinary share - diluted | 1,340,445,653 | 1,328,144,092 | [1] | 1,409,690,879 | [1] | |||
Net income per ordinary share | ||||||||
-Basic | (per share) | $ 0.057 | ¥ 0.407 | ¥ 1.092 | [1] | ¥ 1.445 | [1] | ||
-Diluted | (per share) | $ 0.056 | ¥ 0.399 | ¥ 1.085 | [1] | ¥ 1.436 | [1] | ||
[1] The Company acquired various companies on December 13, 2023, which was accounted for as an under common control transaction in accordance with ASC 805-50. The Company retrospectively adjusted the above comparative consolidated statements of comprehensive income in prior years. Refer to Note 1 (e) for detailed information. |
Related party transactions - Ma
Related party transactions - Major Related Party Transaction (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Relx Inc. | |||
Expenses allocated from/(to) related parties: | |||
Sharebased compensation expenses allocated from RELX Inc. | ¥ (474,132) | ||
Expenses allocated to Relx Inc. | ¥ (13,370) | ¥ (4,883) | |
Expenses allocated from Relx Inc. | 2,696 | 399 | |
Sales of products to related party | 293,530 | 66,752 | 42,267 |
Expenses allocated from Relx Inc.'s operations | 71,156 | ||
Other | 1,212 | ||
Redemption of long-term investments by Relx Inc. and Sunnyheart Inc. | 588,872 | ||
Related Party | |||
Expenses allocated from/(to) related parties: | |||
Total | ¥ 944,096 | ¥ 62,268 | ¥ 516,399 |
Related party transactions - Fi
Related party transactions - Financing Received From and Provided to Related Parties (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | ||
Financing (received from)/provided to related parties: | ||||
Funds provided by RELX Inc. | ¥ 0 | ¥ 0 | ¥ 0 | |
Funds paid back to RELX Inc. | 0 | ¥ 0 | 11,174 | [1] |
Investment prepayment returned from Relx Inc. | (21,006) | |||
Others | (327) | |||
Total | (41,434) | ¥ (9,832) | ||
Relx Inc.'s operations and Sunnyheart Inc | ||||
Financing (received from)/provided to related parties: | ||||
Financing proceeds received on behalf of RELX Inc. | ¥ (41,107) | |||
[1] The Company acquired various companies on December 13, 2023, which was accounted for as an under common control transaction in accordance with ASC 805-50. The Company retrospectively adjusted the above comparative consolidated balance sheets in prior year. Refer |
Related party transactions - _2
Related party transactions - Major Balances with Related Parties (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2023 USD ($) | Nov. 25, 2020 CNY (¥) | ||
Amounts due from related parties, Current | |||||||
Increase (Decrease) in Due to Related Parties, Current | ¥ 60,397 | $ 8,507 | ¥ 423 | [1] | |||
Current liabilities | |||||||
Funds advance provided by RELX | (109,410) | (52,493) | |||||
Net amount due to the Parent waived | ¥ 600,000 | ||||||
Related Party | |||||||
Current liabilities | |||||||
Due from Related Parties, Current, Total | 118,736 | 5,112 | $ 16,724 | ||||
Total | (101,927) | (423) | [1] | $ (14,356) | |||
Net revenue from related party | 944,096 | 62,268 | ¥ 516,399 | ||||
Related Party | Expenses allocated to Relx Inc.'s operations | |||||||
Current liabilities | |||||||
Due from Related Parties, Current, Total | 7,980 | 5,112 | |||||
Total | (5,411) | ¥ (423) | |||||
Related Party | Sales to related parties | |||||||
Current liabilities | |||||||
Due from Related Parties, Current, Total | 97,326 | ||||||
Related Party | Purchase from related parties | |||||||
Current liabilities | |||||||
Total | (55,311) | ||||||
Related Party | Funds received from related parties | |||||||
Current liabilities | |||||||
Total | (41,107) | ||||||
Related Party | Others | |||||||
Current liabilities | |||||||
Due from Related Parties, Current, Total | 13,430 | ||||||
Total | ¥ (98) | ||||||
[1] The Company acquired various companies on December 13, 2023, which was accounted for as an under common control transaction in accordance with ASC 805-50. The Company retrospectively adjusted the above comparative consolidated balance sheets in prior year. Refer |
Fair value measurement (Details
Fair value measurement (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) |
Assets measured at fair value | |||
Short-term investments securities, net | ¥ 8,329,242 | ¥ 5,844,322 | |
Long-term investment securities, net | 8,000 | $ 1,127 | 8,000 |
Short-term investments | |||
Assets measured at fair value | |||
Short-term investments securities, net | 2,183,862 | 2,434,864 | |
Available-for-sale | |||
Assets measured at fair value | |||
Short-term investments securities, net | 561,940 | ||
Recurring | Level 2 | |||
Assets measured at fair value | |||
Short-term investments | 2,183,862 | 2,434,864 | |
Short-term investments securities, net | ¥ 561,940 | ||
Recurring | Level 2 | Available-for-sale | |||
Assets measured at fair value | |||
Long-term investment securities, net | ¥ 557,492 |
Fair value measurement - Additi
Fair value measurement - Additional Information (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |||
Fair value measurement | ||||||
Impairment of long-term investments | ¥ 0 | $ 0 | ¥ 4,000 | [1] | ¥ 0 | [1] |
Impairment on acquired intangible assets and fixed assets | 5,008 | 29,938 | ¥ 0 | |||
Nonrecurring | ||||||
Fair value measurement | ||||||
Financial assets, measured at fair value | 0 | 0 | ||||
Financial liabilities, measured at fair value | ¥ 0 | ¥ 0 | ||||
[1] The Company acquired various companies on December 13, 2023, which was accounted for as an under common control transaction in accordance with ASC 805-50. The Company retrospectively adjusted the above comparative consolidated balance sheets in prior year. Refer |
Commitments and contingencies_2
Commitments and contingencies (Details) ¥ in Thousands | Dec. 31, 2023 CNY (¥) |
Aggregate future minimum rental payments under non cancelable agreement | |
2024 | ¥ 4,220 |
Geographic information (Details
Geographic information (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Total revenues | ¥ 1,586,397 | $ 223,439 | ¥ 5,332,779 | [1] | ¥ 8,520,978 | [1] |
China | ||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Total revenues | 1,357,884 | ¥ 5,332,779 | ¥ 8,520,978 | |||
International | ||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Total revenues | ¥ 228,513 | |||||
[1] The Company acquired various companies on December 13, 2023, which was accounted for as an under common control transaction in accordance with ASC 805-50. The Company retrospectively adjusted the above comparative consolidated statements of comprehensive income in prior years. Refer to Note 1 (e) for detailed information. |