Chinese vaping firm RLX raises $1.4 billion in U.S. IPO - sources

RELX vaping products by RLX Technology Inc are seen displayed at a store inside a shopping mall in Beijing
Chibuike Oguh, Echo Wang and Scott Murdoch
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By Chibuike Oguh, Echo Wang and Scott Murdoch

(Reuters) - Chinese vaping firm RLX Technology Inc sold shares in its U.S. initial public offering (IPO) on Thursday at $12 a piece, above its target range, to raise $1.4 billion, according to three sources with direct knowledge of the matter.

The IPO values Beijing-based RLX at $18.6 billion. The company had set an initial target price range of $8-$10 per share for a sale of around 116.5 million shares.

RLX did not respond to a request for comment and the sources could not be named as the information had not yet been made public.

RLX's share offering comes as Chinese listings face increased scrutiny from the U.S. government.

Former President Donald Trump signed legislation last month that would kick Chinese companies that do not adhere to American auditing standards off U.S. stock exchanges.

The political skirmishes between the United States and China did not dissuade U.S.-based investors from buying into the deal, said one source on condition of anonymity as he was not authorised to talk to media.

"Not one person said the U.S., China tensions are holding me back," the person with direct knowledge said.

Trump also signed an executive order in November banning U.S. investment in companies deemed to have ties to the Chinese military.

In 2020, there were 35 IPOs by Chinese firms in the United States raising a total of $13.5 billion, up from $3.5 billion in the previous year.

So far in 2021, three Chinese companies have already raised $319 million from IPOs, according to data provider Dealogic.

Founded in 2018, RLX earned 2.2 billion yuan ($324.2 million) in the first nine months of 2020, up 93% from the previous year.

The company sells vaping products under the RELX brand.

It is controlled by Chief Executive Kate Wang, the former head of China operations for U.S. ride hailing firm Uber Technologies Inc.

Shares in RLX are due to begin trading on the New York Stock Exchange on Friday under the symbol "RLX."

Citigroup and China Renaissance are the lead underwriters.

(Reporting by Chibuike Oguh in New York, Echo Wang in Miami and Scott Murdoch in Hong Kong; Editing by Stephen Coates & Shri Navaratnam)