A：The highlights of RLX Technology's fourth quarter and fiscal year 2025 earnings include a strong finish to a highly successful year despite a complex global economy, the consumer-first strategy, and the effective execution of initiatives that solidify the company's position as an industry leader in the global smokeless tobacco transition.

A：During 2025, RLX Technology started from zero in a key market in East Asia and executed flawlessly over the year, launching two successful product series, opening 425 franchise stores, capturing over 20% of the specialty store channel, and increasing channel revenue by over 200%. The company also started to replicate these successes with a global blueprint, focusing on a single store economic model to explore potential franchise expansion opportunities.

A：RLX Technology is building a deep competitive moat in Europe by investing in a leading European firm for local distribution, moving key leaders to focus on Western Europe, building major strategic partnerships, leveraging a world-class supply chain to supply premium products tailored for European tastes, and ensuring strict compliance with local regulations.

A：In mainland China, the business remains strong and steady, with domestic revenue growing by over 20% in 2025 compared to the previous year. The company capitalized on market improvements by enhancing product options, optimizing distribution networks, and upgrading retail operations. The company is committed to supporting a healthy, compliant market by not compromising on quality and safety, and by creating compliant products that offer superior performance, satisfaction, and value to move adult users away from the illicit market.

A：RLX Technology is integrating artificial intelligence directly into its core operations, transforming massive global data into a competitive advantage. This is helping improve product design, supply chain management, predict consumer preferences, launch new products faster, and accelerate global delivery. Additionally, AI is handling routine work, allowing the team to focus on complex problems and strategy, thereby generating operational leverage and keeping the company lean, fast, and efficient as it scales globally.

A：RLX Technology's strategic priorities include connecting its highly efficient AI-enabled global supply chain directly to deep local retail networks and tailoring its approach to each market to create a profitable business model. The company enters 2026 with incredible momentum, rapidly growing global revenue, a strong balance sheet, and healthy cash reserves. The company is defining the future of the global smokeless tobacco transition through its innovation and strategic execution.

A：In the fourth quarter of 2025, the company's net revenues reached RMB 1.14 billion, up 40.3% year over year. For the full year, total net revenues grew 44% to RMB 3.96 billion. The company recorded a non GAAP operating profit of RMB 158 million in the fourth quarter and non GAAP net income surged to RMB 1.16 billion for the full year.

A：The revenue growth and profitability were driven by three factors: rapid international expansion, the successful integration of the company's European investment, and steady growth in mainland China.

A：For 2026, the company expects a stable and predictable environment for its international business. They anticipate volume growth and revenue growth to align closely with the industry expectation of double-digit growth. The company plans to continue geographic expansion, with a strong pipeline of international markets for the first half of the year. Although specific details on new markets are not shared, the company is highly confident in the progress being made.

A：The company's capital allocation strategy remains focused on maximizing long-term shareholder value. They intend to distribute non-GAAP operating profit to shareholders through dividends, subject to board approval. The company has returned over 500 million US dollars to shareholders through dividends and share repurchases to date. Going forward, they plan to continue finding opportunities to optimize capital structure and enhance shareholder returns.

A：In mainland China, the company is facing challenges such as the presence of illegal products from unverified workshops. Despite this, the domestic business grew by over 20% in 2026. The company expects growth to continue but at a more normalized pace due to the high base of 2025. As an industry leader, the company is working with regulators to bring users back to high-quality, regulated products.

A：The company's investment plan in Europe involves strategic investments and organic growth, targeting tools for steel profiles for distributors with their own retail networks and complementary brands that fit well with their current products. They are actively looking for targets and aim to close more transactions this year, although potential deals carry some uncertainty and are not included in the budget. In Asia, the regulatory landscape is shifting towards legalization and the introduction of new excise taxes. The company's strategy remains consistent, utilizing dynamic pricing to manage cost adjustments under new tax regimes.

A：In Korea, the company's core strength is natural nicotine which is already taxed, so the new policy of higher taxes does not materially affect them. They anticipate that the industry will pass the tax increases on to consumers, maintaining their compound position. In Southeast Asia, the company is leveraging dynamic pricing to manage cost adjustments under new tax regimes. Despite regulatory changes, the company's products maintain a significant price advantage, leading to resilient consumer demand. The company welcomes the regulations as they indicate industry maturity and support their leadership position in the long run.

A：Management views consumer demand for the company's products as highly resilient due to their deep integration into daily routines. Even with macroeconomic and geopolitical headwinds, consumer purchasing in key markets remains strong. The company's reduced-risk products offer a structural price advantage, providing revenue insulation from broader economic fluctuations. Energy and freight volatility have minimal impact on their margins due to the high value-to-weight ratio of their products. The company is also developing an AI-enabled ERP system to optimize the supply chain and is well-positioned to protect margins and sustain growth.

A：The company has started the rollout of its one-hour products in Europe in the second half of 2025 and is using a multi-brand strategy to adapt to local market dynamics in the UK. Production is ramping up at the new facility in Southeast Asia, and while marketing efforts are currently intentional and controlled, feedback from consumers and distributors has been overwhelmingly positive. The demand is present, and the supply chain needs time to reach full commercial share. The company's main goal in China is channel expansion, focusing on building new partnerships to expand its footprint for oral products. Revenue growth in this category is expected as supply chain stabilizes and marketing initiatives expand.