A gas-solid two-phase flow reaction model was developed to evaluate the performance of a novel catalytic cracking reactor in the residue-to-chemicals (RTC) process. Coupled TFM, EMMS drag, and 12-lump kinetic models were employed to simulate the flow reaction process. The reaction temperature and product yields at the reactor exit aligned well with real industrial RTC reactor test results, indicating the reliability and effectiveness of the coupling model. Catalyst particles formed an internal circulation structure in the reactor, increasing the instantaneous catalyst-to-oil ratio. The reactor exhibited low axial and radial temperature gradients with higher reaction temperatures, accelerating the catalytic cracking rate and enhancing the selectivity for high-value products. The effects of the catalyst-to-oil ratio, catalyst inlet temperature, and feedstock mass flow rate on the flow reaction process were optimized. Results showed that both the catalyst-to-oil ratio and catalyst inlet temperature influenced the overall catalyst velocity distribution. Within the limit range, increasing the catalyst-to-oil ratio increased feedstock conversion, gasoline, LPG, dry gas, and coke yields, but decreased diesel yield. Conversely, increasing the feedstock mass flow rate showed opposite trends. Different trends in product yields were observed with varying inlet catalyst temperatures, with optimal product distribution at 973.15 K.