RLX 테크놀로지 2026년 2분기 실적 발표 콜: 마진 확대 및 유럽 성장

핵심 요약

• 2026년 2분기 순매출은 자체 해외 판매량 증가와 2025년 5월 인수 효과에 힘입어 전년 동기 대비 14.8% 증가한 10억 1,000만 위안을 기록했다. 해외 시장이 전체 순매출의 약 70%를 차지했다.
• 매출총이익은 전년 동기 대비 47.8% 증가한 3억 5,780만 위안을 기록했다. 매출총이익률은 공급망 최적화, 수율 개선, 유리한 지역 및 제품 믹스에 힘입어 전년 동기 대비 790베이시스포인트(bp), 전분기 대비 360베이시스포인트 상승한 35.4%를 달성했다.
• 비GAAP 영업이익은 전년 동기 대비 28.8% 증가한 1억 4,960만 위안을 기록하며, RLX 테크놀로지의 11분기 연속 비GAAP 영업이익 흑자를 달성했다. 비GAAP 순이익은 2억 3,880만 위안이었다.
• 매출은 수출 규제 조정과 관련된 출하 조기 집행 수혜를 입었던 1분기 이후 전분기 대비 감소했다. 경영진은 주요 해외 시장의 기저 수요가 여전히 견조하다고 밝혔다.
• RLX는 2026년 7월 서유럽 유통 플랫폼에 대한 지배지분 투자를 완료했다. 해당 사업은 2026년 3분기부터 연결 실적에 전액 반영될 예정이며, 이에 따라 보고되는 해외 매출은 증가하지만 유통 사업의 수익성이 상대적으로 낮아 그룹의 매출총이익률(%)은 하락할 것으로 보인다.
• 경영진은 중국 본토의 연간 매출이 전년과 비슷한 수준을 유지할 것으로 예상하는 한편, 유럽 인수를 통해 하반기 보고되는 해외 매출이 대폭 증가할 것으로 전망했다.

주요 재무 데이터

사업 및 영업 실적

해외 시장 확장은 RLX 테크놀로지의 핵심 성장 동력으로 유지되었다. 경영진은 2분기 성장의 원인으로 자체 해외 판매량 증가와 2025년 5월 인수한 유럽 전자담배 업체의 기여를 꼽았다.

규제에 따른 수출 조정에 앞서 1분기 출하가 조기 집행되면서 전분기 대비 매출은 감소했다. RLX는 수익성이 낮은 물량을 유통 채널에 밀어내기보다는 소매 판매 및 건전한 채널 재고를 우선시하고 있다고 밝혔다.

유럽은 여전히 회사의 확장 전략에서 중심적 역할을 하고 있다. 2026년 7월 인수한 서유럽 유통업체는 3만 개 이상의 소매 판매점에 직접 제품을 공급하고 있으며, 2만 개 이상의 독립 상인을 연결하는 자체 B2B 플랫폼을 운영 중이다. RLX는 이 플랫폼을 개방형 멀티 브랜드 마켓플레이스로 유지하는 한편, 자체 공급망 규모와 브랜드 관계를 활용해 유통 비용을 절감하고 조달 조건을 개선할 계획이다.

RLX는 또한 전자담배 제품군을 넘어 사업을 확장하고 있다. 차세대 구강용 니코틴 파우치 제품군이 상용화되었으며, 동남아시아에 건설 중인 제조 허브에 추가 생산 능력이 계획되어 있다. 이 시설은 여러 제품 카테고리를 지원하고 관세 측면의 입지를 개선하며 물류를 효율화할 것이다. 또한 RLX는 적절한 시장 및 규제 여건을 기다리고 있는 궐련형 전자담배(heat-not-burn) 기술과 시장 투입 준비가 완료된 제품을 보유하고 있다.

경영진 가이던스

경영진은 2026년 3분기부터 서유럽 유통 플랫폼의 연결 실적 반영이 시작됨에 따라 하반기 보고되는 해외 매출이 대폭 증가할 것으로 예상하고 있다. 자체 성장은 소매 판매와 채널 재고 품질을 중심으로 지속 관리될 예정이다.

제품 믹스와 출하 흐름이 정상화됨에 따라 매출총이익률은 경영진이 설명한 건전하고 균형 잡힌 수준으로 회복될 것으로 예상된다. 수익성이 낮은 유통 사업의 연결 반영으로 매출총이익률(%)은 낮아지겠지만, 경영진은 이번 거래를 통해 절대적인 금액 기준의 영업이익과 순이익은 확대될 것으로 기대하고 있다.

중국 본토 시장의 경우 경영진은 연간 매출이 전년과 비슷한 수준일 것으로 전망하고 있다. 이러한 전망은 불법 전자담배 제품에 대한 단속 강화에도 불구하고, 규제 승인 일정이 보다 보수적으로 잡혀 있음을 반영한 것이다.

RLX는 자체 성장, 수익 증대형 M&A, 주주 환원에 자본을 배분할 계획이다. 자사주 매입과 배당은 이사회 승인 및 시장 상황에 따라 결정된다. 경영진에 따르면 인수 대상 기업은 명확한 현금 회수 기간을 가져야 하며, 구조적으로 지분 희석을 일으키지 않고 주당순이익(EPS) 증대에 기여해야 한다.

리스크 및 주목할 점

• 해외 규제가 점차 세분화되고 규제가 강화되고 있다. 경영진은 밋밋한 포장(plain packaging), 규격화된 기기, 소매 진열 제한, 향/맛 설명 제한, 다크 스토어(배송 전용 매장) 운영 등 영국에서 시행될 가능성이 있는 규제안을 언급했다.
• 경영진은 절대적인 이익 규모 증가를 기대하고 있으나, 유럽 유통업체 인수로 인해 RLX의 매출 믹스가 변화하고 연결 매출총이익률(%)은 낮아질 것이다.
• RLX는 위안화로 실적을 보고하는 반면 미국 달러와 영국 파운드로 매출을 창출하기 때문에 금리 변동과 환율 노출로 인한 변동성이 발생할 수 있다.
• 무역 마찰, 관세 변화, 지정학적 불확실성은 회사가 동남아시아 제조 투자를 결정하게 된 배경 요소로 남아 있다.
• RLX는 비상장 관계사들이 제출한 PMTA(시판 전 담배 제품 신청)에 대한 당국의 결정을 기다리고 있다. 회사는 규제 및 단속 방향에 대한 장기적 가시성이 확보될 때까지 미국 내 대규모 상업적 출시를 진행하지 않을 계획이다.

애널리스트 Q&A 주요 내용

자본 배분 및 M&A: RLX는 다중 카테고리 R&D, 동남아시아 제조, 신제품 출시 등 고수익 자체 투자에 우선순위를 둘 것입니다. 또한 R&D, 제조, 자체 브랜드, 시장 진입(route-to-market) 역량을 강화하는 대규모 인수도 고려할 것입니다. 경영진은 고정된 밸류에이션 캡이나 매출 기준을 정하지 않았습니다.

하반기 해외 성장: 경영진은 절제된 자체 성장과 2026년 3분기부터 시작되는 신규 인수 서유럽 플랫폼의 연결 실적 반영에 따른 대폭적인 보고 매출 기여를 기대하고 있습니다.

유럽 시장 경쟁: RLX는 전자담배, 차세대 구강용 니코틴, 궐련형 전자담배 제품에 걸친 다중 카테고리 실행력이 점차 중요해지고 있다고 보고 있습니다. 경영진은 공급망 효율성, 제품 개발, 전문 소매점과의 관계, 현지 유통에 대한 통제력 강화를 자사의 경쟁 우위 요소로 강조했습니다.

니코틴 파우치: RLX는 신규 생산 능력이 본격화된 후 서유럽 및 북유럽 전역의 확장된 유통망 및 B2B 플랫폼과 니코틴 파우치 포트폴리오를 직접 연결할 계획입니다.

중국 및 미국: 경영진은 불법 제품에 대한 중국 당국의 단속을 장기적으로 긍정 평가하지만, 단기적으로는 승인 일정이 보수적일 것으로 예상하고 있습니다. 미국 시장의 경우 RLX는 ROI 중심의 접근 방식을 유지하며, 상당한 자본을 투입하기 전에 더 명확한 규제 가시성을 기다릴 것입니다.

실적 발표 컨퍼런스 콜 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Hello, ladies and gentlemen. Thank you for standing by for RLX Technology Inc.'s Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Today's conference call is being recorded and is expected to last for about 40 minutes.

I will now turn the call over to your host, Mr. Sam Tsang, Head of Capital Markets for the company. Please go ahead, Sam.

Sam Tsang

Thank you very much. Hello, everyone, and welcome to RLX Technology's Second Quarter 2026 Earnings Conference Call. The company's financial and operational results were released through PR Newswire services earlier today and have been made available online. You can also view the earnings press release by visiting our IR website at ir.relxtech.com. Participants on today's call include our Chief Executive Officer, Ms. Kate Wang; our Chief Financial Officer, Mr. Chao Lu; and me, Sam Tsang, Head of Capital Markets.

Before we continue, please note that today's discussions will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements typically contain words such as may, will, expect, anticipate, aim, estimate, intend, plan, believe, potential, continue or other similar expressions.

Forward-looking statements involve inherent risks and uncertainties. The accuracy of these statements may be impacted by a number of business risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, many of which are factors that are beyond our control.

The company's, its affiliates, advisers and representatives do not undertake any obligation to update these forward-looking information, except as required under the applicable law.

Please note that RXL Technology's earnings press release and this conference call include discussions of unaudited GAAP financial measures as well as unaudited non-GAAP financial measures. RLX's press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited GAAP measures.

For today's call, management will use English as the main language. We will also provide simultaneous interpretation on the Chinese line. Please note that the Chinese line is in listen-only mode and Chinese interpretation is for convenience purposes only. In case of any discrepancy, management statements in the original language will prevail.

I will now turn the call over to Ms. Kate Wang. Please go ahead.

Wang Ying

Thank you, Sam, and thank you all for joining today's call. We delivered solid second quarter financial and operational results, supported by our commitment to quality-driven resilience and compliant global growth.

Our top line grew 14.8% year-over-year in the second quarter, mainly driven by our expanding international footprint. Gross profit increased 47.8% year-over-year to RMB 367.8 million. As expected, revenue and gross profit moderated sequentially, not due to any softening in demand, but rather reflecting a trade inventory normalization following the first quarter's shipment pull forward driven by regulatory export adjustments. Because our distribution partners manage multi-brand portfolios, first quarter pre-stocking temporarily secured visibility into sell-out rates, leading to the shipment adjustments we saw this quarter.

Underlying demand across our key international markets remains healthy and resilient. Against this backdrop, we focused on two strategic priorities: sharpening retail execution and optimizing our global operational infrastructure. These deliberate refinements are designed to lay the foundation for our next era of sustainable, profitable growth. Rather than chasing low-margin volume, we are directing our capital towards building an agile, compliant global platform that can absorb regulatory shifts and quickly adapt to evolving demand.

Regulatory oversight across our international market is becoming more detailed and more restrictive enforced, from customs enforcement priorities to refined frameworks. The United Kingdom is a case in point. Proposed regulations cover plain packaging, standardized device authentic retail display bans, restricted flavor descriptions, and limits on dark store operations.

As an industry leader, we welcome these regulatory shifts. It poses the operational agility required to address them proactively. Engaging these stakeholders to foster high standard sustainable compliance frameworks.

Over the long term, clear and consistently enforced boundaries push out non-compliant, low-quality competition and raise barrier to entry. Our robust compliance infrastructure, R&D, and supply chain enables us to meet those standards early, enhancing our platform's operational predictability and long-term sustainability.

Our hands-on operational experience across international markets has taught us valuable lessons. In mature environments, traditional wholesaling model are no longer sufficient to sustain high-quality margin growth. As hardware technology and product standards stabilize, competition is shifting from pure product development to route-to-market execution.

Direct retail, promise proximity, and channel agility. As such, we are aggressively upgrading our distribution architecture through a targeted mix of direct channel investments, strategic distribution alliance, operational support, and channel innovation, and moving away from reliance on a single rigid distribution model.

In Asia, where our brand equity and consumer trust remains exceptionally strong, we are selectively broadening our footprint through localized commercial entities and proprietary channel models.

In Europe, where barriers to entry are higher, we are expanding through capital-efficient strategic partnerships and equity investments. By combining our world-class supply chain with local distribution leaders, we empower existing trading ecosystems while securing direct sell-out visibility and dedicated retail shelf space, establishing a durable competitive moat.

Europe is the cornerstone of our global growth strategy, where we are methodologically expanding our presence on the dual engine model with balanced targeted M&A with organic growth across channels.

In May 2025, we acquired a long-established European e-vapor company with an integrated local retail and online footprint and have been supporting its expansion as a collaborative partner ever since. Over the past year, this integration has brought us deep localized market insights and demonstrated the immense commercial value of aligning our global supply chain with trusted local operators.

Building on that acquisition, in July 2026, we made a strategic controlling investment in a leading B2B and FMCG physical distribution leaders in Western Europe. This entity has a robust offline footprint, directly serving retail end points across the market.

In B2B digital commerce, its proprietary ordering app connects with over 50% of independent retail points of sales in the country. Our integration philosophy centers on empowerment, not operational disruption. We do not intend to restructure their core operations or convert the platform into an exclusive outlet for our own products. They will remain an open multi-brand marketplace serving the broader retail ecosystem.

By applying our global supply chain scale and portfolio of brand relationships, we are confident that we can reduce these platforms' distribution costs and optimize sourcing terms.

While expanding our distribution reach, we are also accelerating our transformation into a multi-category, next-generation smoke-free product platform, extending beyond our leadership in e-vapor into a broader smoke-free portfolio. We have commercialized our modern oral nicotine pouch line and are steadily ramping up manufacturing capacity and the channel distribution.

In the heat-not-burn category, we hold extensive proprietary technology and patent reserves, as well as the pipeline of market-ready products awaiting optimal market and regulatory conditions for commercial launch.

To support these multi-category expansion and reduce our exposure to trade friction in the macroeconomic and geopolitical uncertainties, we are currently constructing a state-of-the-art manufacturing hub in Southeast Asia. The facility will cover multi-product categories, improve our tariff positions, and streamline logistics, supporting long-term sales resilience across our international markets.

Our mandate is clear: leverage our R&D capabilities, regulatory infrastructure, and newly strengthened route-to-market networks to capture market share and establish leading position across the global smoke-free ecosystem.

To sum up, we made meaningful progress this quarter, executing from a position of balance sheet strength. Our solid capital position gives us flexibility and the patience to say no to suboptimal, marginal, dilutive projects.

We remain financially disciplined, ensuring capital is deployed exclusively towards high-quality, value-accretive assets. By pairing direct channel control with multi-category product innovation, we are building a more resilient, diversified global platform structured to deliver sustainable long-term growth as the industry matures.

Now I will hand the call over to Chao to review our financial results in detail.

Chao Lu

Thank you, Kate, and hello, everyone. We delivered solid second quarter top line results with net revenues reaching RMB 1.01 billion, representing a 14.8% year-over-year increase from RMB 880 million in the prior year period.

Our top line growth was primarily driven by organic volume expansion in international markets, alongside incremental contributions from our acquisition completed in May 2025. For the quarter, international revenues remained our principal growth engine, accounting for approximately 70% of total net revenues.

As anticipated, second quarter net revenues moderated sequentially from first quarter 2026, which benefited from a one-time policy adjustment boost.

Turning to profitability. Gross profit rose 47.8% year-over-year to RMB 357.8 million in the second quarter. Gross margin expanded sequentially to 35.4%, up 790 basis points year-over-year and up 360 basis points sequentially, mainly due to supply chain optimization, manufacturing yield improvement, and favorable geographic and product mix shift.

We delivered our 11th consecutive quarter of positive non-GAAP operating profit, driven by top line expansion, favorable product mix and disciplined operating cost control. Non-GAAP income from operations reached RMB 149.6 million, up 28.8% year-over-year. Non-GAAP net income for the quarter stood at RMB 238.8 million.

Now let me provide additional financial and strategic context regarding the Western European transaction Kate highlighted earlier. In July 2026, we made a controlling investment in one of Western Europe's leading distributors of next-generation smoke-free products and FMCG goods. This entity brings two strategic assets to us, an extensive offline network directly serving over 30,000 retail endpoints across key national accounts and specialized retail, and a proprietary B2B digital commerce platform, connecting over 20,000 independent merchants. We expect to unlock significant operational and supply chain synergies from this transaction.

Furthermore, we are confident we can enhance this platform's margin profile over time by integrating RLX's global supply chain scale and brand portfolio. The entity's financial and operational results will be fully consolidated into RLX Technology's financial statements starting in the third quarter of 2026.

Behind our financial and operational progress is a deep commitment to corporate sustainability and long-term value creation. We published our 2025 ESG report this quarter, highlighting our advancements across corporate governance, product quality and safety, youth access prevention protocols, supply chain labor ethics, and environmental stewardship. From expanding employee welfare initiatives to enforcing ESG compliance across our supplier base, we continue to elevate our standards.

Furthermore, by embedding eco-friendly materials and adhering to responsible marketing practices, we ensure our expansion in both ethical and sustainable. Integrating these ESG principles into our core operations strengthens trust amongst adult consumers, regulators, employees and commercial partners, creating enduring value for all stakeholders.

Our robust balance sheet continues to serve as the bedrock of our global expansion strategy. As of June 30, 2026, our total capital resources, comprising cash, cash equivalent, restricted cash, short-term bank deposits and liquid investment securities stood at RMB 13.9 billion.

In closing, our second quarter performance underscores our operational and financial strength. Supported by this quarter's structural gross margin expansion, disciplined capital allocation and a healthy balance sheet, we are well positioned to strengthen our market leadership and deliver long-term value to our shareholders.

Thank you. Operator, we are now ready to take questions.

Operator

[Operator Instructions] The first question today comes from Christine Peng with UBS.

질의응답

Christine Peng

Thank you, management, for the results summary as well as the strategy outlook. So I have two questions for the management. So the first question is about the capital allocation strategy. Obviously, Mr. Lu just mentioned there is abundant cash resources on the balance sheet. So I was just wondering what's going to be the capital allocation strategy going forward by leveraging on this very strong cash balance.

The second question is about the acquisition strategy, which has become a very important driver of the company's development going forward. So I was wondering what is the criteria in terms of valuation multiple as well as the revenue and profit contribution from the acquisition going forward?

Sam Tsang

Thank you, Christine, for your two questions. So the first question is on the capital allocation strategy. Our capital allocation strategy is financially disciplined and designed to drive sustainable long-term total shareholder returns. We allocate capital across three core priorities. The first one is organic growth and high ROI core business initiatives. This includes funding multi-category R&D, supply chain localization, specifically our manufacturing hubs currently under construction in Southeast Asia and strategic product launches. When regulations and tariff shifts in a given market, we take an ROI-gated approach. Sustainable organic growth remains our primary engine.

Second, we selectively deploy capital into highly accretive M&A. We target assets that boost strategic capabilities across R&D, local manufacturing, proprietary brands, and route-to-market distribution, while meeting clear financial standards.

Third, we remain committed to direct shareholder returns. Our strong cash generation and liquid capital reserves allow us to consistently reserve excess capital for systematic share repurchases and dividend distributions, subject to Board approvals and prevailing market conditions.

Regarding your second question about our M&A criteria, we do not have a specific valuation cap or top line contribution threshold, but we do adhere to strict financial and operational standards.

On valuation, we benchmark targets directly against transaction comparables and our own public trading multiple. Every potential transaction must have a clear time line for a cash payback, be structurally non-dilutive and generate EPS accretion.

In terms of execution, we actively empower our investing company by providing capital support, supply chain integration, procurement optimization, and operational capabilities to unlock structural value. While we prioritize strategic fit and synergy potential across arbitrary size stores, our fitness operational bandwidth means we intentionally focus on larger-scale opportunities that can move the financial needle and meaningfully enhance our global infrastructure.

In summary, we deploy capital only where discipline -- where valuation discipline and clear strategic synergies full align. Thank you very much for your questions.

Operator

The next question comes from Lydia Ling with Citi.

Lydia Ling

Management, this is Lydia from Citi. I also have two questions. So first one is on what's your expectation on the overseas growth in the second half of the year and especially considering the -- both from the acquisition as well as the organic growth in the overseas market?

And my second question is on the margin side and what's your outlook for the second half, especially like considering the acquisition impact on your operation or profitability?

Sam Tsang

Thank you very much, Lydia, for your questions regarding our growth outlook and margin expectations. So regarding our growth outlook for the second half of the year, we are taking a quality focused pragmatic approach to driving international growth.

On organic performance, we are prioritizing retail sell-through velocity and channel inventory health rather than pushing volume into channels at any cost. This prudent recalibration established a solid, sustainable baseline for our ongoing operations.

In addition to our organic baseline, the financial consolidation of our newly acquired Western Europe distribution platform starting in the third quarter will deliver a step change increase in reported international revenue growth for the second half.

Beyond the immediate top line expansion, we anticipate compounding commercial synergies across medium to long term. While our organic growth rates reflects disciplined inventory management, the consolidation of our European platform, combined with operational synergies, gives us full confidence in delivering strong overall overseas performance in the second half.

Regarding our margin trajectory, the gross margin expansion observed in the second quarter was primarily driven by temporary product and revenue mix shift. As our product mix and shipment flows normalize in the second quarter, we expect gross margin to settle back a healthy balanced range.

While non-operating factors such as macroeconomic interest rate movements and foreign exchange dynamics from reporting in renminbi, while generating revenue in U.S. dollars and sterling may create minor headline fluctuations, we maintain strict operational cost controls.

Regarding our European acquisition, as we mentioned earlier, starting in the third quarter, we will consolidate the Western Europe downstream distribution platform. Distribution businesses naturally operates on a lower percentage gross margin profile than proprietary brand operations. Consequently, while percentage margins will reflect this structural mix shift on an absolute dollar basis, this transaction will meaningfully expand our operating profit and net profit scale. Thank you for your questions.

Operator

The next question comes from Yun Guo with Citic.

Yun Guo

Management, I also have two questions. And the first question is about the U.S. market. British American Tobacco is preparing to sell flavored e-cigarettes in the U.S. starting in the fourth quarter. What is our forward strategy for the U.S. market?

And the second question is about the domestic market. With the regulations on the illegal e-cigarettes becoming increasingly strict in China, what is the impact on the company?

Sam Tsang

Thank you for all your questions. One is on the U.S. market and the other one is on the China market. So for the U.S. market, we closely monitor U.S. regulatory developments and peers' action regarding PMTA enforcement. While adult smoker demand for diverse alternative proceeds, regulatory compliance and visibility remain the critical determinants for long-term commercial commitments in the U.S.

Our strategic stance towards the U.S. market is disciplined, agile, and strictly ROI-driven. Notably, our non-listed affiliates previously submitted PMTA applications, which are currently in advanced stages, awaiting regulatory approvals.

However, we will not commit large-scale capital growth to aggressively commercial rollouts until regulatory pathway and enforcement standards provide long-term credibility. In the interim, we are directing our capital and management bandwidth towards regulatory transparent markets across Europe and Asia, alongside scalable reduced risk categories such as modern oral nicotine pouches.

Regarding your question on the Mainland China markets, we view the tightening domestic regulatory environment and crack down on illegal non-compliant products as an overwhelming positive long-term development for the industry and for our company as well.

Eliminating illicit trade restores order to retail channels, removes bad actors and redirect consumer demand back to legal tax-paying brands like us. In the near term, as regulatory bodies intensify enforcement and refine administrative oversight, procedural time line for government approval has become more conservative.

Accordingly, we have adopted a prudent baseline in our internal forecasting and expect Mainland China sales for the full year to be broadly flat year-over-year. We remain in full compliance and continue to work closely with the regulators to support a transparent, legally compliant industry ecosystem. Thank you for your questions.

Operator

The next question comes from Zoe Zou with CICC.

Yuying Zou

Management, this is Zoe from CICC. I have two questions. First, with Philip Morris' growth rapidly in Europe, how do you see competition evolving ahead?

Secondly, could you walk us through the strategic plan for new categories like oral pouch?

Sam Tsang

Sure. Thanks Zoe, for your questions. So one is on the European market competition and the second one is on the oral nicotine pouches.

So for the first one, while we do not directly comment on our peers, multi-category execution across vaping, modern oral, and heat-not-burn tobacco products has clearly become mandatory for all major industry participants. While legacy tobacco companies have the capital to pay for key account listing fees, RLX holds distinct competitive advantages.

First, we are a pure-play non-cigarette business, meaning we are fully committed to harm reduction and replace combustible cigarettes without any internal channel conflict.

Second, we possess strong supply chain efficiency and product innovation capabilities, which combined with our deep relationships in specialty vape retail, position us to expand further into large chain channels.

Furthermore, through our strategic investments, we are actively strengthening our route-to-market and shelf space control. Combining our agile supply chain with direct control of local distribution gives us strong confidence in capturing market share across Europe.

So regarding our plans of the nicotine pouches, we think that modern oral nicotine pouches represents a principal growth driver in our business expansion. We have embedded specialized pouch production lines into our manufacturing hub currently under construction in Southeast Asia.

Once construction is complete and production ramp-ups, this facility will ensure supply chain resilience, scale and cost efficiency. Upon scaling, we will plug our oral pouch line directly into our strengthened European distribution architect, giving immediate access to retail point of sales and B2B platforms across Western and Northern Europe. Supported by a dedicated internal team, we are leveraging our proprietary R&D capabilities to continuously optimize product attributes. We are confident that our modern oral pouches will become a meaningful contributor to revenue and profits in the future. Thank you very much for your questions.

Operator

Due to time constraints, now I would like to turn the call back over to the company for closing remarks.

Sam Tsang

Thank you once again for joining us today. If you have further questions, please feel free to contact RLX Technology's Investor Relations team through the contact information provided on our website or Piacente Financial Communications.

Operator

This concludes this conference call. You may now disconnect your lines. Thank you.