RLX Technology (NYSE:RLX) stock is taking a beating on Monday following talk of stricter regulations for vaping products in China.
Early drafts of new regulations would result in vaping and other new tobacco products in the country being more in line with those of traditional tobacco products. These new regulations are coming from China’s Ministry of Industry and Information Technology and State Tobacco Monopoly Administration.
China taking a stronger stance on vaping products means that RLX Technology could face difficulties growing its business. No company wants to see new government regulations for its industry, and that’s especially true for vaping in China.
The Chinese government holds a strong grip on the tobacco industry in the country with a monopoly on the market. It doesn’t want to lose this grip either as cigarette sales made up 5.45% of all tax revenue in 2018, reports Reuters.
RLX Technology stock is particularly sensitive to negative news as it hasn’t been on the public market for very long. The company held its IPO in January of this year and raised $1.4 billion in the process. It priced shares at $12 each and included 116.5 million in total for the offering. Investors that are wanting to learn more about the company and its IPO can check out this link.
RLX stock is seeing major movement following today’s news. As of this writing, more than 70 million shares of the stock have changed hands. To put that in perspective, the company’s daily average trading volume is roughly 12 million shares.
RLX stock was down 44.1% as of Monday morning and is down 63.1% since its IPO.
RLX Technology isn’t the only Chinese stock that has been in the news of late.
There are quite a few stocks from China that have been popping up in the news recently. That includes electric vehicle (EV) stocks, such as Nio (NYSE:NIO) and XPeng (NASDAQ:XPEV), as well as healthcare stock Zhongchao (NASDAQ:ZCMD). Let’s take a look at the other big news for Chinese stocks that investors need to be aware of.
More on Chinese Stocks
- NIO Stock: Nio Just Got a Big Boost From Tesla’s China Blow
- Strong Sales, Deliveries Create Solid Value Case for XPeng Stock
- ZCMD Stock: Why Chinese Healthcare Play Zhongchao Is Skyrocketing Today
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article.