A：The main topics covered in the company's second quarter 2026 earnings conference call include the company's financial and operational results, discussions on GAAP and non-GAAP financial measures, management's remarks on strategic priorities and operational infrastructure, and the company's approach to regulatory changes and compliance.

A：The company is focusing on two strategic priorities: sharpening retail execution and optimizing its global operational infrastructure.

A：The company welcomes the new regulatory shifts in international markets and is actively engaging with stakeholders to foster high-standard sustainable compliance frameworks over the long term. It has a robust compliance infrastructure that meets these standards early, enhancing operational predictability and long-term sustainability.

A：The company is evolving its distribution architecture through a targeted mix of direct, strategic operational support and channel innovation, moving away from a single rigid distribution model. In Europe, it is expanding through capitalization, strategic partnerships, and investments, combining its world-class supply chain with local operators to secure direct sell visibility and dedicated retail shelf space.

A：The company acquired a long-established European e-commerce company, gaining deep localized market insights and the commercial value of aligning its global supply chain with trusted local operators. Subsequently, it made a strategic controlling investment in a leading B2B FMCG physical distribution leader in Western Europe, integrating its robust offline network and digital commerce capabilities, and creating an open multi-brand marketplace.

A：The company is advancing in its product expansion by commercializing its modern oral nicotine pouch line and further developing its heat-not-burn category products. It is constructing a state-of-the-art facility in Southeast Asia to improve product position, streamline logistics, and support long-term sales resilience across international markets. It is also confident in leveraging its R&D capabilities, regulatory structure, and planned market networks to capture market share and establish a leading position across the global smoke-free ecosystem.

A：The key financial results for the second quarter include a 14.8% year-over-year increase in net revenue to RMB 1.01 billion, a rise in gross profit to RMB 357.8 million, and an expansion in the growth margin to 35.4%, up 790 basis points year over year and 360 basis points sequentially. Non GAAP operating profit increased by 28.8% year over year to RMB 149.6 million, and non GAAP net income reached RMB 230.238.8 million.

A：The recent acquisition contributed to the company's international revenue growth, with the entity's financial support and operational results expected to be fully consolidated into RLX Technology's financial statements starting in the third quarter of 2026.

A：The company is committed to corporate sustainability and long-term value creation. They published their 2025 ESG report highlighting advancements across various aspects such as corporate governance, product quality, youth access prevention, supply chain, labor ethics, and environmental stewardship. The company continues to embed eco-friendly materials and responsible marketing practices into their core operations to ensure ethical and sustainable expansion.

A：The company's capital allocation strategy is financially disciplined and designed to drive sustainable long-term shareholder returns. They allocate capital across priorities such as organic growth, high ROI initiatives, and direct shareholder returns. For acquisitions, the company adheres to specific financial and operational standards, benchmarks against comparables, and ensures a clear timeline for cash payback and EPS accretion. They prioritize strategic fit and synergy potential.

A：While there is no specific evaluation based on top-line contribution threshold, the company does set financial and operational standards for acquisitions. Valuation is benchmarked against comparables and the company's own performance. Each potential transaction must have a clear cash payback timeline, generate EPS accretion, and align with strategic goals. The company also focuses on large-scale opportunities that can enhance global infrastructure.

A：The company is anticipating海外growth and has highlighted the acquisition as a key driver of its development. They are focusing on large-scale opportunities that can move the financial needle. The outlook for profitability in the second half of the year, considering acquisition impact, will be addressed in future discussions.

A：The consolidation of the Western Europe downstream distribution platform is anticipated to lead to a structural mix shift resulting in lower percentage margins on an absolute dollar basis. However, each transaction is expected to meaningfully expand operating profit and net profit scale.

A：The company's strategy for the US market in the third quarter includes closely monitoring regulatory developments and the actions of peers regarding PMTAs (Pre Market Tobacco Product Applications). While regulatory compliance and visibility are critical for long-term commercial commitments, the company will not commit large-scale capital growth for an aggressive commercial rollout due to the current regulatory pathway and enforcement standards. Instead, capital and management bandwidth are being directed towards regulatory transparency in Europe and Asia, alongside scalable reduced-risk categories.

A：The company views the tightening domestic regulatory environment and crackdown on illegal, noncompliant products in China as an overwhelmingly positive long-term development for both the industry and the company. The elimination of illicit trade is expected to restore order to retail channels and redirect consumer demand towards legal, tax-paying brands. As a result, the company has adopted a prudent baseline in internal forecasting and expects year-over-year sales in China for the full year to be broadly flat.

A：The strategic plan for oral nicotine pouches includes embedding specialized pouch production lines into the company's manufacturing hub under construction in Southeast Asia. Once operational, the facility will ensure supply chain resilience, scale, and cost efficiency. The pouches will then be ramped up in Europe through the company's strengthened PM Distribution Architecture, providing an immediate asset to retail point of sale and B2B platforms across Western and Northern Europe. The company is continuously optimizing product attributes using proprietary R&D capabilities, and is confident that these pouches will become a meaningful contributor to revenue and profits in the future.