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RERE.US Corporate Blog – March 2023
Below is a summary of the recent business development of the Company and the industry headlines in March 2023. Regarding the operational metrics, please refer to the Company’s quarterly earnings release and its filings with the U.S. SEC.
Operational update
In March, a dozen jointly managed AHS Recycle shop-in-shops were newly opened in mid- and low-tier cities, including Baoding, Shijiazhuang, and Lishui to further popularize the recycling services. In late March, AHS Recycle successfully held its 2023 Store Partner Conference in Shenzhen, where the management team and franchisee representatives provided sharing sessions. AHS Recycle empowers its store partners with location picking, product display, and quality standardization capabilities as efforts to jointly improve recycling services for users.
PJT Marketplace upgrades prepayment rules for POP merchant users, by adjusting the transaction deposit according to the credit rating of each merchant user, including both buyers and sellers. PJT then adjusts the previously fixed platform prepayment multiples to floating multiples according to the level of its merchant users. The greater the transaction volume and credit rating, the greater the floating multiple, the higher prepayment multiple that the merchant can obtain, and the higher capital turnover efficiency of transactions. The new rules, which came into effect on April 6, were expected to strengthen user stickiness of active merchants on the platform, screen merchants with low transaction efficiency or non-compliant transactions, and further optimize the user structure of PJT Marketplace. In addition, PJT upgrades the sales guarantee service for sellers. If a seller accepts PJT’s suggested product prices under this program, the transaction payment will be credited to the seller immediately, and PJT will undertake after-sales responsibilities. This is believed to further improve sales and capital turnover efficiency for sellers.
Key highlights
ATRenew announces multiple milestones when reporting its 4Q&FY22 financials
On March 13, ATRenew released its financial report for the fourth quarter and full year of 2022, announcing multiple revenue and profit milestones, including a 26.9% year-on-year increase in annual revenue to RMB9.87 billion, and the number of pre-owned products recycled and transacted throughout the year reached 32 million. For the first time, ATRenew realized profitability on a full-year basis, reporting an annual non-GAAP operating profit of RMB6.9 million and a non-GAAP net profit of over RMB50.8 million. In addition, ATRenew achieved a net cash inflow of RMB200 million in 2022. As of December 31, 2022, there were 1,920 offline stores in 266 cities across China. The quality inspection operation capability covers 8 regional operation centers. The South China (Dongguan) automation operation center was put into use in the fourth quarter, further advancing ATRenew’s overall automation quality inspection efficiency. As a result, the non-GAAP fulfillment expenses as a percentage of total net revenues dropped by 2.8 percentage points to 8.7% in the fourth quarter, verifying an improved cost efficiency.
ATRenew also announced that it deepened its strategic cooperations with leading international OEMs for trade-in, which is expected to extend the service capabilities of ATRenew’s 1P recycling supply chain for retail scenarios and increase the recycling penetration rate in first- and second-tier cities in China.
CCTV reports on the circular economy and the re-commercialization of used electronics worth advocating
Recently, CCTV-2, the finance channel of China Central Television, reported on second-hand electronic product transactions under the circular economy, citing the business model of AHS Recycle established by ATRenew. According to the news report, giving a second life to idle electronics is worth advocating. This emerging industry with abundant opportunities shall be developed further soon. To view the news clip, please visit the WeChat video account of ATRenew, named “万物新生新鲜发布”.
Industry news
Government work report: promoting the green transformation of development mode, while conserving energy and reducing carbon emission in key areas
According to “China Business News”, Keqiang Li, former premier of China’s State Council, made a government work report at the first session of the 14th National People's Congress on March 5, pointing out that this year, China would promote the green transformation of the development model, improve policies to support green development, develop the circular economy, promote resource conservation and efficient utilization.