ATRenew(US:RERE) Haitong Securities International·2026-01-05 15:22Investment Rating - The report gives an "Outperform" rating for the company, with a target market value of 10.23 billion RMB and a target price of 6.61 USD based on a 15x PE for 2026 [4][17]. Core Insights - The second-hand trading platform is in a rapid growth phase, with significant competitive advantages in sourcing quality supply and pricing power. The company is exploring category expansion and steadily advancing its international business [1][4]. - The company is a leader in the domestic circular economy for second-hand goods, transitioning from a single recycling platform to a full industry chain service provider [21][22]. - The company benefits from the rational consumption trend and the increasing availability of quality social inventory, particularly in the 3C category, driven by policies encouraging trade-ins and product replacement cycles [4][25]. Financial Summary - Total revenue is projected to grow from 12,966 million RMB in 2023 to 32,253 million RMB in 2027, with year-on-year growth rates of 31.4%, 25.9%, 28.1%, 25.0%, and 23.3% respectively [3][16]. - Adjusted net profit is expected to increase from 225 million RMB in 2023 to 1,028 million RMB in 2027, with significant year-on-year growth rates of 342.9%, 39.5%, 27.7%, 70.1%, and 50.8% [3][15]. - The adjusted operating profit margin is projected to improve from 1.9% in 2023 to 3.7% in 2027 [3][15]. Business Model and Strategy - The company has established a comprehensive service system covering the entire supply chain from recycling to sales, utilizing a digital and supply chain-centric approach to enhance efficiency and transparency [31][32]. - The company operates through multiple platforms, including C2B, B2B, and B2C models, to facilitate standardized recycling and efficient circulation of idle consumer electronics [32][37]. - Strategic partnerships, particularly with JD.com, provide significant advantages in sourcing quality supply and enhancing market reach [43][4]. Market Dynamics - The second-hand electronic product trading market in China is expected to reach 858 billion RMB by 2025, with a growth rate of 21% [9]. - The company is well-positioned to benefit from the increasing trade-in rates and the elongation of replacement cycles for smartphones, which are critical for driving demand in the second-hand market [4][25].