ATRenew(US:RERE) BambooWorks·2025-03-14 00:52Core Viewpoint - The company, 万物新生 (RERE.US), plans to expand its 爱回收 store network to 5,000 locations over the next three years, nearly doubling its current size, to enhance brand recognition and strengthen its consumer-facing recycling and retail business [1][5]. Group 1: Business Expansion and Strategy - The company aims to significantly increase its physical store presence, which is crucial for reaching consumers and building brand awareness in a predominantly online retail environment [3]. - The expansion plan includes adding 800 new stores this year, with a long-term goal of increasing direct sales to consumers from 17% in Q1 2023 to 50% [5]. - The company is also investing 100 million yuan in new media marketing on platforms like Douyin and Kuaishou to boost brand visibility [5]. Group 2: Financial Performance - In Q4, the company reported a revenue increase of 25.2% year-on-year to 4.85 billion yuan (669 million USD), with an annual growth rate of 25.9% [3]. - The company achieved a net profit of 77.4 million yuan in Q4, marking a more than threefold increase compared to previous records, and a reversal from a net loss of 16.7 million yuan in the same period last year [4]. - The operating profit for the quarter was 53.1 million yuan, indicating a positive trend in profitability [4]. Group 3: Partnerships and New Business Ventures - The company is optimizing its iPhone recycling partnership with Apple, which is currently in a "model transition period" to enhance profitability [5]. - Despite achieving a revenue target of 1 billion yuan from this partnership last year, the CFO anticipates a decline in scale but positive operating profit margins in Q1 2025 [5]. - The company has terminated several unprofitable overseas e-commerce projects but is exploring new cross-border business opportunities, particularly in exporting recycled phones [5]. Group 4: Market Context and Valuation - The recent policy change in January 2023, which includes smartphones in the national recycling subsidy program, is expected to increase the supply of used devices for the company [6]. - The company's current price-to-sales ratio stands at 0.38, which is relatively low compared to competitors, indicating potential for growth [6].