ATRenew(US:RERE) Guohai Securities·2024-05-23 02:32Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [2][6]. Core Insights - The company reported a total revenue of 3.65 billion RMB for Q1 2024, representing a year-on-year increase of 27.1%. The Non-GAAP operating profit was 80 million RMB, up 80.8% year-on-year, with a Non-GAAP operating profit margin of 2.2%, an increase of 0.7 percentage points compared to the same period last year [3][4]. - The company anticipates Q2 2024 revenue to be between 3.67 billion and 3.77 billion RMB, reflecting a year-on-year growth of 23.8% to 27.2% [3]. Revenue Breakdown - The company's Q1 2024 revenue breakdown shows that 1P product revenue was 3.31 billion RMB, a year-on-year increase of 28.5%, primarily driven by increased sales of second-hand electronic products, which accounted for 90.7% of total revenue, up 1.0 percentage points year-on-year [4]. - The 3P service revenue was 340 million RMB, a year-on-year increase of 15.1%, attributed to growth in the PJT market and multi-category recycling services [4]. Profitability Analysis - The gross profit margin for Q1 2024 was 19.3%, down 2.3 percentage points from the previous year. The company’s fulfillment expenses were 310 million RMB, up 16.3% year-on-year, due to increased personnel costs from more recycling transactions [4]. - The Non-GAAP net profit for Q1 2024 was 20 million RMB, a decrease of 58.7% year-on-year, with a Non-GAAP net profit margin of 0.6%, down 1.2 percentage points from the previous year [3][4]. Future Projections - The company is projected to achieve revenues of 16.4 billion, 20.4 billion, and 24.8 billion RMB for 2024, 2025, and 2026 respectively, with year-on-year growth rates of 27%, 24%, and 21% [6][7]. - Non-GAAP net profits are expected to be 400 million, 620 million, and 870 million RMB for the same years, with growth rates of 76%, 57%, and 39% respectively [6][7]. Market Performance - The company has outperformed the S&P 500 index over various time frames, with a 74.84% increase over the last 1 month and 146.36% over the last 3 months [5]. - As of May 21, 2024, the company's stock price was 2.64 USD, with a market capitalization of approximately 579.44 million USD [5]. Valuation Metrics - The report indicates a projected P/E ratio of 11, 7, and 5 for the years 2024, 2025, and 2026 respectively, suggesting a favorable valuation outlook [6][7].