Chinese Vaping Firm RLX Prices U.S. IPO Above Marketed Range

(Bloomberg) -- Chinese e-cigarette maker RLX Technology Inc. has priced its U.S. initial public offering above a marketed range at $12 a share, according to a person familiar with the information and asked not to be identified because it wasn’t public yet.

RLX Technology will raise $1.4 billion based on the 116.5 million American depositary shares it had marketed. The company, backed by Sequoia Capital China, had targeted a share price or $8 to $10 each.

A representative for the company didn’t immediately respond to a request for comment.

The IPO is being led by Citigroup Inc. and China Renaissance Holdings Ltd. The company’s ADS, each representing one ordinary share, are expected to begin trading Friday on the New York Stock Exchange under the symbol RLX.

The pricing of the IPO was reported earlier by GlobalCapital.

The IPO, the first major U.S. listing this year by a China-based company, signals continuing investor demand, even as deteriorating U.S.-China relations saw the NYSE earlier this month delist three Chinese telecommunications firms blacklisted in December in an executive order by then-U.S. President Donald Trump.

Read More: Behind the NYSE’s Swerves on Delisting China Stocks: QuickTake

The sparring between Washington and Beijing is set to broadly limit Chinese companies’ access to U.S. capital markets, after President Trump signed a law last year that could lead to them being kicked off U.S. exchanges if American regulators can’t vet their audit papers.

Still, the long-trailed moves appeared to have little discernible effect on Chinese companies’ thirst for U.S. capital.

Almost $15 billion was raised by Chinese IPOs on U.S. exchanges in 2020, the second-most on record, according to data compiled by Bloomberg. Many of those deals were either increased in size or priced above their marketed ranges following overwhelming demand from investors.

RLX, founded in 2018, is China’s largest e-cigarette maker with 62.6% of the country’s market, according to a report by China Insights Consultancy cited in the company’s IPO prospectus.

Known for its RELX-branded devices, the company’s products are available in at least 13 countries including Canada, the U.K., Indonesia, New Zealand and South Korea, its website shows.

The vaping industry has boomed in China even as the country banned online sales of e-cigarettes just over a year ago. China has joined other countries globally in putting pressure on vaping amid concerns about its potential health effects.

China is the world’s largest potential vaping market, with an estimated 286.7 million adult smokers in 2019, RLX said in its prospectus. But vaping products only have a 1.2% penetration rate, compared with 32.4% in the U.S.

Another Chinese e-cigarette maker, Smoore International Holdings Ltd., listed in Hong Kong last year and has soared over 500% from its offer price.