The pushrod engine your mate polished up is known for having a pretty restrictive head - it's the same engine as the TT250 and Hawk.
The 4-valve OHC motor in the RX3 is a step up in sophistication, and I think it's about as good as it's going to get without compromising reliability.
When you get into small bikes, you start to realise that looking for performance can be a bit of a fool's errand; the gains are so small they're hardly worth it. There are exceptions; the pushrod 229cc in the Hawk and TT250 respond well, but they're quite restricted in factory form. For example, I own a Ninja 300 and that engine is just about 'there' from the factory. The only tuning changes I wanted was a smoother power curve, and an EFI map did just that. I don't think anyone has had more than 3-4hp extra on a full system, which is nice on track but you'd barely notice on the street.
I would see how you get on with it first, then look at gearing. That's where your going to be able to have the most influence on the bike's performance.
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