Shares of RLX, China’s largest e-cigarette brand, plunge in New York on news Beijing might tighten regulations
- Draft regulations posted by Ministry of Industry and Information Technology suggest it will seek to regulate these products similarly to ordinary cigarettes
- RLX shares were trading 40 per cent lower on the New York Stock Exchange as of about 10am local time
The shares of RLX Technology, China’s largest e-cigarette brand, were trading significantly lower in New York on Monday, after Beijing signalled it would overhaul rules governing e-cigarettes and new tobacco products.
RLX’s shares were trading 40 per cent lower on the New York Stock Exchange as of about 10am local time, even as the benchmark S&P 500 index was trading higher.
The implications of the draft regulations could be wide-ranging as, with an estimated 300 million smokers, China is considered the world’s largest market for tobacco products.
But tobacco companies are increasingly facing scrutiny from regulators in China. In November 2019, the country banned the online sales of e-cigarette products to prevent minors from buying them.
The World Health Organization has also warned that e-cigarettes are bad for users and bystanders exposed to fumes, and that they can harm fetuses and affect teenagers’ brains. This warning is a direct blow to the e-cigarettes industry’s claims that vaping was less harmful than ordinary cigarettes.