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].