ATRenew(RERE) 民生证券·2024-09-14 00:09Investment Rating - The report suggests a positive investment outlook for the company, recommending active attention due to its leading position in the second-hand 3C trading market and favorable growth prospects [2][3]. Core Insights - The company, Wanwu Xinxing (RERE), has established itself as a leader in the second-hand 3C product trading sector in China, benefiting from supportive government policies and increasing consumer acceptance of second-hand transactions [2][6]. - The company's revenue has shown robust growth, with a CAGR of approximately 48.8% from 2019 to 2023, and a 27.3% year-on-year increase in the first half of 2024 [2][13]. - Wanwu Xinxing has a strong cash position, with a total of 2.769 billion CNY in cash and equivalents as of the first half of 2024, enabling share buyback programs to enhance shareholder returns [2][16]. Company Overview - Wanwu Xinxing, founded in 2011, has evolved into a comprehensive platform for second-hand 3C products, offering services across various categories including electronics, luxury goods, and more [2][6]. - The company operates a multi-brand strategy with platforms like "Aihuishou," "Paimitang," and "Paipai," facilitating a full-chain transaction model from collection to sales [2][8]. - As of the first half of 2024, the company has expanded to 1,516 offline stores across over 260 cities in China, enhancing consumer trust and transaction volume [2][6]. Financial Analysis - From 2019 to 2023, the company's revenue increased from 3.932 billion CNY to 12.966 billion CNY, with a significant reduction in net losses, achieving a Non-GAAP net profit of 101 million CNY in the first half of 2024 [13][16]. - The adjusted operating profit margin has been on the rise, reaching 2.3% in the first half of 2024, indicating improved profitability [2][16]. Industry Overview - The second-hand consumer market in China is experiencing significant growth, driven by longer replacement cycles for consumer electronics and increasing acceptance of second-hand products [20][21]. - The market for second-hand consumer electronics is projected to grow from 143.8 billion CNY in 2018 to 425.4 billion CNY in 2022, with a CAGR of 31.1% [24][26]. - Government policies promoting recycling and second-hand transactions are expected to further support market expansion [26][27].