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energy monster(EM) - 2024 Q4 - Annual Report
EMenergy monster(EM)2025-04-28 11:22

Financial Performance - Total revenues for 2023 were RMB 2,958,647, an increase of 4.2% compared to RMB 2,838,190 in 2022[49]. - The mobile device charging segment generated revenues of RMB 2,869,215 in 2023, up from RMB 2,813,619 in 2022, while the photovoltaic business contributed RMB 50,995 in 2023[49]. - Gross profit for 2023 was RMB 1,752,456, a decrease of 22.5% from RMB 2,264,955 in 2022[49]. - Net income for 2023 was RMB 88,744, a significant recovery from a net loss of RMB 730,753 in 2022[49]. - Total third-party revenues reached RMB 2,838,190,000 for the year ended December 31, 2022[58]. - The net loss attributable to ordinary shareholders was RMB 730,753,000, reflecting significant operational challenges[58]. - The company incurred a net loss of RMB 13.5 million (US1.9million)in2024,followinganetincomeofRMB88.7millionin2023andanetlossofRMB730.8millionin2022,with2023′snetincomeattributedtotherecoveryinofflinefoottrafficinChina[82].−Revenuegeneratedunderthedirectmodeldecreasedsignificantlyin2024aspartofthecompany′sstrategicshifttowardsthenetworkpartnermodel,whichbeganinQ22023[88].RegulatoryEnvironment−TheCSRC′snewfiling−basedregulatorysystemforoverseasofferingsandlistingscameintoeffectonMarch31,2023,affectingfuturecapitalraisingactivities[32].−ThePCAOBhasnotissuedanynewdeterminationregardingitsabilitytoinspectorinvestigateregisteredpublicaccountingfirmsinmainlandChinaandHongKongasofthedateofthisannualreport[29].−ThecompanymayfacesanctionsfromtheCSRCifitfailstocompleterequiredfilingproceduresforfutureoffshoreofferings[33].−Thecompany’sADSsmaybeprohibitedfromtradingintheU.S.undertheHFCAAifthePCAOBisunabletoinspectorinvestigatecompletelyauditorslocatedinChina[29].−CompliancewithexistingandfuturePRClawsrelatedtodatasecurityandpersonalinformationprotectionmayincuradditionalcostsandnegativelyimpactthecompany′sreputation[137].VIEStructureandRisks−ThecompanyoperatesthroughaVIEstructureduetoforeignownershiprestrictions,whichmayexposeittoregulatoryrisks[202].−UncertaintiesregardingtheenforceabilityofcontractualarrangementswiththeVIEcouldaffectthecompany′scontrolandfinancialresults[204].−AnyfailurebytheVIEoritsshareholderstoperformcontractualobligationscouldleadtosignificantcostsandadverselyaffectthecompany′sbusiness[210].−TheenforceabilityoftheVIEcontractualagreementsdependsontheshareholdersofShanghaiZhixiang,whoownthemajorityofvotingshares[213].−PotentialconflictsofinterestexistbetweentheshareholdersoftheVIEandthecompany,whichmayadverselyaffectcontrolandeconomicbenefits[214].CashFlowandCapitalManagement−ThecompanyreportedanetcashgeneratedfromoperatingactivitiesofRMB416,499in2023,downfromRMB708,142in2022[54].−CashandcashequivalentsdecreasedtoRMB588,644in2023fromRMB948,773in2022[52].−ThecompanyreportedanetcashusedinoperatingactivitiesofRMB205,669,000fortheyearendedDecember31,2024[62].−Thecompanyhassignificantshort−terminvestmentstotalingRMB2,131,738,000,whichmayprovideliquidity[60].−Thetreasurydepartmentmonitorsinter−companycashtransfersbasedonprojectedannualcashflowstatements[34].ShareholderandDividendInformation−ThecompanyapprovedaspecialcashdividendofUS1.9 million) in 2024, following a net income of RMB 88.7 million in 2023 and a net loss of RMB 730.8 million in 2022, with 2023's net income attributed to the recovery in offline foot traffic in China[82]. - Revenue generated under the direct model decreased significantly in 2024 as part of the company's strategic shift towards the network partner model, which began in Q2 2023[88]. Regulatory Environment - The CSRC's new filing-based regulatory system for overseas offerings and listings came into effect on March 31, 2023, affecting future capital raising activities[32]. - The PCAOB has not issued any new determination regarding its ability to inspect or investigate registered public accounting firms in mainland China and Hong Kong as of the date of this annual report[29]. - The company may face sanctions from the CSRC if it fails to complete required filing procedures for future offshore offerings[33]. - The company’s ADSs may be prohibited from trading in the U.S. under the HFCAA if the PCAOB is unable to inspect or investigate completely auditors located in China[29]. - Compliance with existing and future PRC laws related to data security and personal information protection may incur additional costs and negatively impact the company's reputation[137]. VIE Structure and Risks - The company operates through a VIE structure due to foreign ownership restrictions, which may expose it to regulatory risks[202]. - Uncertainties regarding the enforceability of contractual arrangements with the VIE could affect the company's control and financial results[204]. - Any failure by the VIE or its shareholders to perform contractual obligations could lead to significant costs and adversely affect the company's business[210]. - The enforceability of the VIE contractual agreements depends on the shareholders of Shanghai Zhixiang, who own the majority of voting shares[213]. - Potential conflicts of interest exist between the shareholders of the VIE and the company, which may adversely affect control and economic benefits[214]. Cash Flow and Capital Management - The company reported a net cash generated from operating activities of RMB 416,499 in 2023, down from RMB 708,142 in 2022[54]. - Cash and cash equivalents decreased to RMB 588,644 in 2023 from RMB 948,773 in 2022[52]. - The company reported a net cash used in operating activities of RMB 205,669,000 for the year ended December 31, 2024[62]. - The company has significant short-term investments totaling RMB 2,131,738,000, which may provide liquidity[60]. - The treasury department monitors inter-company cash transfers based on projected annual cash flow statements[34]. Shareholder and Dividend Information - The company approved a special cash dividend of US0.015 per ordinary share, totaling US$7.7 million, funded by surplus cash on the balance sheet[34]. - Smart Share Global Limited's subsidiaries in China are subject to a 10% withholding tax on dividends, which can be reduced to 5% under certain conditions with Hong Kong[37]. - The company's PRC subsidiaries must set aside at least 10% of after-tax profits for statutory reserves, which are not distributable as cash dividends[43]. Operational Challenges and Market Conditions - The company faces intensified competition in the mobile device charging service industry, which may lead to pricing pressures and reduced financial margins[78]. - Economic conditions in China, including consumer demand and discretionary spending, significantly influence the company's business performance[90]. - The increasing affordability and portability of power banks and portable chargers may lead to reduced demand for mobile device charging services, adversely affecting user attraction and retention[94]. - Natural disasters and global events, including COVID-19, have negatively impacted the company's operations and financial performance[200]. Internal Controls and Financial Reporting - The company identified material weaknesses in internal control over financial reporting, which may impair the accuracy of financial results and investor confidence[176]. - As of December 31, 2024, the company had three additional material weaknesses related to financial reporting and accounting personnel, completeness of system-generated information, and remediation measures[179]. - The company revised previously issued financial statements for the years ended December 31, 2022, and 2023, correcting errors related to tax surcharges, commissions, and expected credit losses[180]. Research and Development - Research and development expenses remained stable at RMB 91,461 in 2023, compared to RMB 90,655 in 2022[50]. - Significant investments in research and development are necessary, but these efforts carry technical and business risks, and delays in product introduction may occur[112]. Supply Chain and Product Management - The company relies on suppliers and assembly partners for product procurement, and any disruptions in the supply chain could adversely affect operations and financial results[116]. - The company faces potential challenges in maintaining product quality, which is essential for consumer confidence and business success[125]. - Effective management of products and warehouses is critical, as mismanagement could lead to product obsolescence and significant write-downs[150]. Compliance and Legal Risks - The company may face claims under consumer protection laws, which could damage its reputation and result in significant costs for compliance and legal defense[95]. - The company is exposed to legal claims and regulatory proceedings that could adversely affect its reputation and financial condition[98]. - The company must comply with government regulations, including potential price controls, which could affect its pricing strategies and financial performance[106]. Strategic Outlook - Future outlook includes potential market expansion and new product development strategies[58]. - The company plans to expand its photovoltaic business, projecting revenues of RMB 479,850 for 2024[49]. - The company acknowledges that its relatively limited operating history makes it difficult to predict future growth and financial results[76].