RLX Technology Announces Tenfold Dividend Hike Amid Regulatory Headwinds

Shareholders of RLX Technology are set for a significantly larger capital return, as the company’s board has approved a dramatic increase in its dividend payout. This move to enhance shareholder value comes alongside an extension of the existing share repurchase plan, signaling management’s confidence despite a tightening regulatory landscape in its core Chinese market. Investors are now weighing whether these robust capital return policies can offset looming fiscal challenges.

Capital Return Program Strengthened

The focal point of the announcement is a substantial rise in the annual dividend, which has been set at $0.10 per share. This represents a tenfold increase from the previous year’s payout of $0.01 per share. Shareholders of record as of January 26, 2026, will be eligible for the distribution, which is scheduled for payment on February 9, 2026.

Concurrently, the company’s board has extended the duration of its current share buyback authorization. The program, which had approximately $170 million remaining at the end of 2025, will now remain in effect until December 31, 2027.

Should investors sell immediately? Or is it worth buying RLX Technology?

Mounting Regulatory and Tax Pressures

These shareholder-friendly actions unfold against a backdrop of increasing state intervention in China’s e-vapor sector. At the start of 2026, the State Tobacco Monopoly Administration (STMA) implemented new regulations, introducing credit systems and production capacity limits. These measures are designed to curb industry overcapacity and standardize compliance through a formalized rating framework.

A more direct financial impact will stem from a pivotal tax policy change effective April 1, 2026. The Chinese government is eliminating the Value-Added Tax (VAT) rebate for e-cigarette exports, which previously stood at around 13%. This removal is expected to notably raise production costs for goods destined for international markets. Further regulatory tightening is anticipated in Hong Kong, where the possession and use of e-cigarette cartridges in public places is slated to be prohibited from mid-2026 onward.

Investor Focus Shifts to Forthcoming Earnings

The critical question for the market is whether the enhanced dividend can sufficiently counterbalance these growing operational and regulatory hurdles. Upcoming financial results are likely to provide crucial insights. RLX Technology is expected to release its next quarterly report between March 13 and 16, 2026. Market participants will scrutinize this disclosure for management’s strategy to mitigate the rising costs associated with the loss of export tax benefits and to navigate the evolving regulatory environment.