Core Viewpoint - The consumer electronics market is undergoing adjustments due to fluctuations in upstream component prices, with the new device market affecting the second-hand recycling industry. Despite concerns, the performance of the second-hand electronics trading platform, Wanwu Xingsheng (Ai Huishou), remains strong, driven by a rise in gold prices and a significant increase in various recycling services [2][8]. Financial Performance - In Q3 2025, Wanwu Xingsheng reported total revenue of 5.15 billion RMB, a year-on-year increase of 27.1%. The non-GAAP operating profit reached 140 million RMB, up 34.9%, marking a historical high. The non-GAAP net profit was 110 million RMB, reflecting a 22.3% increase [2][3]. - The revenue structure shows that 1P (self-operated) product sales accounted for 4.73 billion RMB, a 28.7% year-on-year increase, making up 91.84% of total revenue [3][7]. Growth Drivers - The growth in the second-hand market is attributed to the early release of new devices due to chip iterations, which has boosted the trade-in market. The 1P to C revenue grew over 70%, and compliant refurbished product revenue surged by 102% [5][7]. - The gross margin for 1P business improved from 11.7% to 13.4% year-on-year, driven by enhanced capabilities in compliant refurbishment [5][7]. Service Expansion - The 3P (platform) service revenue was 420 million RMB, an 11.6% increase, primarily due to the growth in the Paipai business and multi-category recycling services [7]. - The average monthly profit contribution from multi-category services per store was approximately 7,000 RMB, with transaction volume growing by 95% year-on-year, contributing nearly 53 million RMB to service revenue [7]. Market Outlook - The penetration rate for second-hand mobile phone recycling in China remains low, providing significant growth potential compared to over 30% in developed economies. The second-hand device growth rate in China is notably higher than the global average [8]. - Despite the gradual withdrawal of national subsidies, which could negatively impact the new device market, the company remains optimistic about its limited exposure to these subsidies, particularly in high-end device sales [8][9]. Future Projections - For Q4 2025, Wanwu Xingsheng expects total revenue to be between 6.08 billion and 6.18 billion RMB, corresponding to a year-on-year growth of 25.4% to 27.4% [9]. - The company aims to accelerate its international expansion, particularly in emerging markets, leveraging its platform capabilities to establish compliant export channels for second-hand devices [9].

Core Viewpoint - Shenzhen Flashback Technology Co., Ltd. has submitted its listing application to the Hong Kong Stock Exchange for the third time, focusing on the second-hand mobile phone recycling market, where it ranks as the third largest player in China with a market share of approximately 1.3% [2][10]. Company Overview - Flashback Technology operates a closed-loop platform model involving upstream brand partners, its own recycling and refurbishment processes, and downstream wholesale sales [2]. - The company's primary revenue comes from the price difference of second-hand devices, with a heavy reliance on mobile phone categories [2]. Financial Performance - Despite being in a rapidly growing market, Flashback Technology has struggled with profitability, showing continuous net losses from 2021 to 2025, with cumulative losses exceeding 300 million yuan [8][9]. - Revenue increased from 750 million yuan in 2021 to 1.297 billion yuan in 2024, but the gross profit margin remained low at 4.8% in 2024, significantly below industry averages [8][10]. - Sales costs rose from 688 million yuan in 2021 to 1.235 billion yuan in 2024, accounting for over 90% of revenue, primarily due to the high costs of procuring second-hand electronic products [8][9]. Market Position and Competition - The second-hand mobile phone recycling market in China is projected to grow from 192.9 billion yuan in 2024 to 360 billion yuan by 2028, with a compound annual growth rate exceeding 16% [10]. - Flashback Technology's market share is limited, with the top two companies holding only 15.3% of the market, and its transaction volume is less than one-sixth of the leading competitor [10]. - Competitors are building barriers to entry, with established players diversifying their services, while Flashback Technology's business model remains overly dependent on B2B partnerships and the Xiaomi ecosystem [10][11]. Strategic Challenges - The company plans to use the funds from its listing to strengthen its supply chain, upgrade its AI quality inspection platform, and repay some debts, but there are concerns that this may be more of a "lifeline" than a genuine strategic upgrade [11]. - The sustainability of its profit model is questioned, as it relies heavily on the price difference of second-hand mobile phones, with limited long-term profitability prospects [11]. - Brand reputation and trust risks are significant, as issues related to data privacy and after-sales service could severely impact the company's image [11].