Q3 2024 ATRenew Inc Earnings Call
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Silence
Speaker Change: Good morning and good evening, ladies and gentlemen. Thank you for standing by and welcome to AT Renew, Inc.'s 3rd Quarter 2024 Earnings Conference Call.
Speaker Change: At this time, all purchase events are in a listen-only mode.
Speaker Change: We will be hosting a question and answer session after management's prepared remarks.
Please note, today's event is being recorded.
Speaker Change: I will now turn the call over to the first speaker today, Mr. Jeremy Ji, Director of Corporate Development and Investor Relations of the company. Please go ahead, sir.
Jeremy Ji: Thank you. Hello everyone and welcome to AT Renews third quarter 2024 earnings conference call. Speaking first today is Kerry Chen, our founder, chairman and CEO, and he'll be followed by Rex Chen for CFO. After that we'll open the call to the questions from analysts.
Speaker Change: A third quarter 2024 financial results were released earlier today. The earnings price release and investor slides accompanying this call are available at our IR website, ir.18renew.com. There will also be a transcript following this call for your convenience.
Speaker Change: For today's agenda, Kerry will share his thoughts about the quarterly performance and business strategy, followed by Rex, who will address the financial highlights. Both Kerry and Rex will join the Q&A session.
Please pay attention to the safe harbor statements.
Speaker Change: Some of the information you hear during our discussion today will consist of forward-looking statements and I refer you to our safe harbor statements in the earliest press release.
Speaker Change: Any forward-looking statements that management makes on this call are based on assumptions as of today, and that AT Renew does not take any obligations to upgrade our assumptions on these statements.
Speaker Change: Also, this call includes discussions on certain non-GAAP financial measures. Please refer to our earnings press release, which contains a reconciliation of non-GAAP measures to GAAP measures.
Speaker Change: Finally, please note that, unless otherwise stated, all figures mentioned during this conference call are in RMB, and all comparisons are on a year-over-year basis.
Speaker Change: I'd now like to turn the call over to Kerry for business and strategy updates.
Thank you very much.
Kerry Chen: Hello, investors and analysts. Welcome to the third quarter of WanWu Xinsheng Group's sales call for the year 2024. We are delighted to share with you the company's sales, the latest developments in consumer products, and our strategic thinking on the second-hand industry.
Speaker Change: Hello, everyone, and welcome to AT Renew's third quarter 2024 earnest conference call. We are pleased to share our performance highlights, our latest practices in promoting consumer goods trade-ins, and our strategic insights on the pre-owned industry.
回顾三季度的业绩,集团总收入为40.5亿元人民币,实现了24.4%的同比增长,符合我们之前的预估水平。
在中国二手手机3C回收与交易的整体市场环境中, 我们的主营回收业务大幅领先于行业增速。
Speaker Change: Our total revenue for the third quarter reached $4.05 billion, achieving year-over-year growth of 24.4%, which is in line with our focus.
Speaker Change: To dive deeper, product revenue grew by 25.6% year-over-year. Breakdown by sources, our core recycling business revenue in mainland China increased by over 30% year-over-year, significantly outpacing the growth of the overall second-hand consumer electronics recycling and transaction market in China.
Speaker Change: At a time when consumption is slowing down, users continue to increase their demand for recycled, portable items. We continue to strengthen our stable layout.
截止2024年三季度末,我們在全國運營1637間愛回收門店。 線下門店作為回收端的主要交付場景,是提升用戶信任和獲取一手回收貨源的重要渠道。
为此,我们会不断提升爱回收门店的服务能力和用户体验,锁定爱回收作为第一回收品牌的用户心智。
Speaker Change: In the next two to three years, we expect to accelerate the pace of power generation.
Speaker Change: As consumer spending slows down, we keep our pace to open new physical stores to meet growing demand for the resulting of idle goods.
Speaker Change: At the end of the third quarter this year, we had a total of 1,637 AHS stores nationwide.
Speaker Change: Physical stores as our primary consumer touchpoint to collect pre-owned products remain the most crucial channel for building user trust and securing first-hand sources of supply.
Speaker Change: We will continue to enhance our AHS stores' service capabilities and user experience to reinforce the top-of-mind brand awareness of AHS Recycle. As a result, we anticipate accelerating our store opening in the next two to three years.
Speaker Change: In terms of the trend of recovery, we shared at the last quarter's press conference that rescue innovation has become a more and more mainstream user option.
即使是在手機3C品類沒有得到國家補貼的情況下
Speaker Change: In the third quarter, the total revenue growth of JD.com through its recycling and renewable energy business has exceeded 40%. Among them, renewable energy has achieved three times the growth.
值得一提的是,近期的双11的大促,通过联合京东通讯,共同投入用户体验和交付。
Speaker Change: We have created the fastest growth record in recent years. In the 21st full-week period, the total revenue growth of JD.COM is 77%. Among them, you can rest assured that you will be loved by wider users. The revenue growth is 246%.
Speaker Change: Yanxue business has also reached 71% in comparison with Jindong These will be reflected in our four-quarter performance
Speaker Change: We fully engage in this policy of banning large scale consumer goods through economic interests at home.
Speaker Change: Long-term supply chain capabilities, joint construction with JD, from recycling, quality control to sales, all-round capability, provide the best service experience in the industry for users.
此外,第三季度,我們的蘋果官方移植換新業務也取得了健康增長,毛利率取得了較好的環比改善。
Speaker Change: Regarding the trend of our recycling business, we shared interim data during our second quarter earnings call that highlighted the growing mainstream adoption of trading services among users.
Speaker Change: Although smartphones and other consumer electronics have not yet been provided with direct trading subsidies, we observe strong demand for trading services.
Speaker Change: In the third quarter, the value of goods collected through JD.com via regular recycling and trading services increased by over 40% year-over-year, of which trading services doubled year-over-year.
Speaker Change: It is worthy mentioning that in recent single-state grant promotion, we worked closely with JD Electronics Business Group by co-investing in user experience and order fulfillment capabilities. We have achieved the fastest growth rate in recent years.
Speaker Change: During the grant promotion, the total value of products recycled via JD.com increased by 77% year-over-year.
Speaker Change: Trading solutions became even more popular, generating a year-over-year increase of 246% in value of products collected.
Speaker Change: On the sales front, 1P retail revenue generated from JD.com increased by 71% year-over-year. These highlights will be reflected in our fourth quarter earnings.
Speaker Change: Against the backdrop of China's national consumption stimulus and trading subsidies, we fully utilize our established supply chain capabilities and end-to-end fulfillment capabilities covering recycling, inspection, and distribution co-built with JD.com, relentlessly enhancing educating trading user experience.
Speaker Change: Additionally, in the third quarter, our Apple official trading program also achieved healthy growth with a steady improvement in gross profit margins sequentially.
多品类回收业务依托爱回收门店的场景,模式轻,体验好,业绩增长亮眼。 本季度多品类回收额同比增长超过270%,带来的服务收入同比增长超过400%。
截止9月末,全國587間愛回送門店已配備多品類回收的能力
Speaker Change: In our category expansion efforts, the transaction value of goods and our multi-category recycling business increased by 270% year over year. This asset-light platform business, providing innovative user experience, is rooted in our existing stores.
Speaker Change: In the third quarter, service revenue generated from this segment grew by 400% year-over-year. As of the end of September, 587 NHS stores nationwide offered multi-category recycling services.
Speaker Change: The asset-light multi-category recycling business also serves as a key driver for obtaining higher service frequency and store visits per user, acquiring cross-selling. It also contributes incremental profit to existing stores and strengthens the competitive position of our stores.
Speaker Change: At the sales end, users' acceptance of second-hand goods is increasing. Our selection of 2C retail relies on self-recycling and self-cut supply chain. In the online Jingdong拍拍 scene, sales are carried out on the Aihuizhou official website and offline stores, to meet the needs of more users to purchase second-hand mobile electronic products that are cost-effective.
相继度,我们的严选二手商品
Speaker Change: In JD Paipai channel, or the official website channel, the store's self-operated channel
Speaker Change: and the new media retail channels have achieved 87.4%, 301.3% and 114.6% of the same growth respectively.
Speaker Change: The total revenue reached 9.7 billion yuan and continued to the second quarter, achieving a total growth rate of more than 120%.
Speaker Change: On the selling end, our direct-to-consumer sales have been particularly strong, as consumers are more open to pre-owned products.
Speaker Change: Leveraging our proprietary supply chain capabilities, our effective consumer engagement channels like PiPiOnJD.com, AHS Recycle official websites and physical stores meet growing user demand for value-driven pre-owned electronic products.
Speaker Change: In the third quarter, 1P2C product revenue through PiPiOnJD.com, AHS Recycle official websites and stores, as well as new media retail channels, grew by 87.4%, 301.3%, and 114.6% year-over-year respectively.
Wearing Tang, Xiaoxin Chen, Lixin Ju, Chen Chen, AiHuiShou Intl, Chen Chen, AiHuiShou Intl
在平台
Speaker Change: In terms of service revenue, the third quarter achieved a 13.9% share growth, accounting for 9.4% of total revenue.
服务的综合收费率为5.34% 环比稳定,其中,拍鸡榜主营橙色机收费率同比提升0.5% 拍拍pop业务,适当调低了收费率
Thank you.
Speaker Change: It increased by 13.9% year-over-year in the third quarter on an aggregated take rate of 5.34%.
Speaker Change: TechGrid of core PJT marketplace business had a 0.5% uplift compared to the same period of 2023. TechGrid of PiPiPop business adjusted down slightly, while PiPi piloted for its direct retail functions and upgraded its confinement offering.
并首次实现了GAAP层面的经营利润转正达2490万元 这与我们的规模效应相关,稍后由CFO REX展开分享
Speaker Change: On the profitability front, we achieved a non-gap operating income of $104 million this quarter, with a non-gap operating margin of 2.6%, and are reporting our first gap operating income of $24.9 million. This achievement is closely tied to our economies of scale, which our CFO Rex will elaborate on later.
下面我来分享一下对于二手行业增速和趋势的理解
Speaker Change: In terms of industry growth, based on the report of the second-hand mobile phone industry of IDC and the data analysis of platform transactions, the domestic second-hand mobile phone consumer electronics industry is developing at a rate of about 10%.
Speaker Change: Our first concrete judgment is that the increase of the old exchange rate is more than the big market It is a more popular way of recovery for domestic users It is driving the development of the second-hand industry
Speaker Change: The second judgment is that in the slow-paced period of consumption, users will continue to increase their demand for recycled items and high-quality second-hand mobile phones.
Speaker Change: We have observed, referencing IDC market insights, that China's second-hand consumer electronics industry is growing by roughly 10% year-over-year.
Speaker Change: We believe, firstly, trading becomes a trendy option among users, thus outpacing and driving the growth of the industry. Secondly, as consumer spending slows down, the demand for the disposal of pre-owned products and value-for-money quality-assured pre-owned smartphones continues to grow.
Speaker Change: As you can see, second-hand recycling and trading is a market in the growing stage.
Speaker Change: What we need to persist for a long time is the core advantage of Hangshi scene and supply chain, and the trust of users to the brand of Aihuizhou.
通過自有供應鏈能力做好合規的產業鏈翻新增值,實現更多商品可以QC零售,從而更大規模釋放規模效應和產業鏈的價值。
Speaker Change: At the same time, we also believe that in the second-hand consumer market, whether it is a mobile phone, 3G, or consumer electronics product, or a gold watch, bag, wristwatch, drink, or slipper, they all have a unique user demand and a large-scale trading value.
二回收將不斷創新,以體驗為核心,服務個人用戶對手機數碼以及更多品類商品的回收和二手交易需求。
Speaker Change: As many of you have experienced, the second-hand market is in its growth stage. For our core second-hand consumer electronics business, which is our business foundation, our long-term strategy focuses on strengthening our scenario plus supply chain advantages and consumer trust in the AHS Recycle brand, efficiently serving users while securing more first-hand sources of supply.
Speaker Change: By integrating supplies from consumers and businesses, leveraging our supply chain capabilities for compliant refurbishment, and increasing retail sales to consumers, we are achieving effective economies of scale and unleashing the value of the industry.
Speaker Change: We believe that within this massive second-hand market, whether consumer electronics, or gold and accessories, bags and watches, with vintage liquor or trendy footwear, there are unique trading characteristics and substantial market value.
Speaker Change: We will relentlessly focus on innovation, keep user experience centric, and expand our offerings to cover more services and product categories.
Speaker Change: On the brand, we believe that user value creation will gradually increase investment on new media platforms such as Douyin and Kuaishou, and continue to educate and strengthen the brand nature of the first recycling brand in Iowa.
Speaker Change: As we remain steadfast in creating user value, we are committed to building AHS Recycle into a top-of-mind brand in the long run. We continue educating consumers of the AHS Recycle brand via progressive brand exposure on new media platforms such as Douyin and Kuaishou.
展望长期发展,万物新生的目标是继续夯实二手回收、交易服务与优品零售的免君地位,持续加强第一回收品牌的新制,为用户提供有价格竞争力的回收和以旧换新体验。
并在业绩方面努力实现大幅领先于行业增速的成长
Speaker Change: Looking at longer-term development, we are committed to doubling the growth rate of the industry by further acquiring user mindshare, serving their needs for competitive recycling and trading experiences, and solidifying our industry-leading position in the full spectrum of recycling, transaction, and retailing services.
此外,在ESG方面,今年以來,愛回收與多個知名消費品品牌共同發起返航新生的活動,比如與歐勒亞集團達成戰略合作,以新模式的美裝空瓶回收換成新的機器。
下面请公司的CFO Rex 介绍一下财务情况
Speaker Change: This year, on the front of ESG, AHS Recycle has initiated the Revive Fanhongxinsheng campaign in collaboration with leading consumer brands.
Speaker Change: We established a group-wide strategic partnership with L'Oréal Group, encouraging consumers to responsibly dispose of empty cosmetic containers in exchange for physical gifts of L'Oréal brand.
Speaker Change: In addition to user attraction and repeated use of our services, this initiative encourages broader consumer brands' participation in eco-friendly recycling while raising awareness about environmental protection. Now I'd like to turn the call over to our CFO, Rex, for financial updates.
will close the public meeting, standby. Good afternoon.
Rex Chen: I am very happy to be able to communicate with you about the third quarter results of the Wang Xinsheng Group. The total revenue of this quarter has maintained a good growth.
Rex Chen: to realize the Negative Efficiency Theory and to achieve a new milestone with the quantitative Efficiency Theory in the GAP approach. Before we analyze the financial data, please note that unless there is another explanation, all the figures are in the RMB unit, and all the numbers and data are the same.
Rex Chen: Hello everyone, we are pleased to report another profitable quarter under non-gap measures and the first quarterly operating profit milestone under gap measures on strong year-over-year growth of total revenue.
Rex Chen: Before taking a detailed look at the financials, please note that all amounts are in RMB and all comparisons are on a year-over-year basis unless otherwise dated.
The third quarter, the company's total revenue grew by 24.4%.
到了40.51亿元,主要得益于产品收入的持续稳健增长。
Diseases are constantly increasing.
Rex Chen: 25.6% to 36.72%, mainly due to the growth of second-hand consumer electronics sales on and offline.
Rex Chen: In the third quarter, total revenues increased by 24.4% to $4,051 million.
Rex Chen: Net product revenues increased by 25.6% to $3,672 million, primarily driven by increased sales of pre-owned consumer electronics through our online and offline channels.
Speaker Change: The service revenue is 3.79 billion yuan, and the growth rate is 13.9%.
Speaker Change: mainly because of the multi-category recycling business of platform platforms and platform models, which has led to an increase in the number of service providers.
Speaker Change: Our platform supports the growth of the transaction size and synchronization.
Speaker Change: The total revenue of the third quarter is 5.30%. More than 30 million yuan of revenue comes from fast-growing multi-service business. The average revenue of multi-service business is healthy. Our multi-service business has contributed nearly 9% of the revenue in the third quarter, and 1.7% in the same period in 2023.
Speaker Change: Net service revenues were $379 million, representing an increase of 13.9%. The increase was primarily due to an increase in service revenue generated from PJT Marketplace and the multi-category recycling business.
Speaker Change: The growth in service revenues went along with the upward trend in the overall growth transaction value of our marketplaces, delivering an overall marketplace hit rate of 5.34% in the third quarter of 2024.
Speaker Change: During the quarter, multi-category recycling business contributed over $30 million to service revenues, delivering a healthy improvement in take rate.
Speaker Change: Our multi-category recycling business attributed to close to 9% of service revenues in the third quarter of 2024, compared with 1.7% in the same period of 2023.
Speaker Change: The reconciliations of GAP and non-GAP measures results are available in our earnest release and the corresponding Form 6K furnished with the USFDC.
商品成本增加了24.2%,是32.13亿元,与产品销售的增长一致。商品成本增加了24.2%,是32.13亿元,与产品销售的增长一致。 于三季度,集团成员的毛利率为20%,而去年同期为19.8%。于三季度,集团成员的毛利率为20%,而去年同期为19.8%。 我们一批业务的毛利率为11.7%,而去年同期为10.7%。我们一批业务的毛利率为11.7%,而去年同期为10.7%。
Speaker Change: Merchandise costs increased by 24.2% to $3,243 million in line with the growth in product sales.
Speaker Change: Gross margin at the group level was 20% in the third quarter, compared with 19.8% in the same period last year. Gross profit margin for our one-pay business was 11.7%, compared with 10.7% in the same period last year.
Speaker Change: New York's debt increased by 20.7% to 3.47 billion yuan. New York's debt increased by 21.9% to 3.44 billion yuan. The main reason for the increase in New York's debt is
Speaker Change: On the one hand, the increase in revenue and transaction volume has led to an increase in manpower and logistics.
Speaker Change: On the other hand, due to the group's expansion of the offline store network in the third quarter of 2024, the monthly fees related to the store have increased accordingly. The monthly fee of NGAP has dropped from 8.7% to 8.5% from the same period last year.
Speaker Change: Fulfillment expenses increased by 20.7% to $347 million, excluding share-based compensation expenses, which we will refer to as SBC from here on. Non-GAAP fulfillment expenses increased by 21.9% to $344 million.
Speaker Change: Under the non-gap measures, the increase was primarily due to, first, an increase in personnel costs and logistics expenses as we conducted more recycling and transaction activities compared with the same period of 2023. And second, an increase in operation facility-related expenses as we expanded our store networks in the third quarter of 2024.
Speaker Change: Non-gap fulfillment expenses as a percentage of total revenues decreased to 8.5% from 8.7%.
Speaker Change: The sales fee is increased from 1.3% to 3.15 billion yuan, including SBC fee, as well as the profit and loss generated by the acquisition of Wuxin Real Estate.
Speaker Change: The GAP sales fee increased by 12.7% to 2.57 billion yuan The main reason is the increase in advertising and marketing activities The GAP sales fee has increased from 7% last year to 6.3%
管理费用减少0.7%至6,930万元
The SBC fee will increase by 9.5%
is 5,540,000 yuan.
Speaker Change: mainly due to the cost of manpower and the increase in office expenses.
Speaker Change: NGAP management rate dropped from 1.6% to 1.4% from the same period last year.
Speaker Change: General and administrative expenses decreased by 0.7% to $69.3 million. If excluding FDC expenses, land-gap G&A expenses increased by 9.5% to $55.4 million, primarily due to increases in personnel costs and office-related expenses.
Speaker Change: Nangab GNA expenses as a percentage of total revenues decreased to 1.4% from 1.6%.
35.5% increase in R&D costs to 53.4 million yuan.
Speaker Change: In addition to the cost of SBC and Wuxin's assets, NGAT's R&D costs have increased by 47.2% to 49.6 million yuan.
Speaker Change: Mainly due to the continuous maintenance of the related personnel costs of the Group Operating Center and the system, the cost of development has increased from 1% to 1.2% in the same period last year.
Technology and content expenses.
Speaker Change: increased by 35.5% to $53.4 million, excluding FEC expenses and amortization of intangible assets and deferred costs resulting from assets and business acquisitions.
Speaker Change: Nangat technology and content expenses increased by 47.2% to 49.6 million. The increase was primarily due to an increase in personnel costs in connection with the ongoing maintenance of our operation centers and systems.
Speaker Change: In terms of profit, in the third quarter of 2024, Nengkai's net profit was 1.04 billion yuan, which is a 40.9% increase from the previous year.
年代的经营利润率为2.6%,2023年同期为2.3%
此外,我們本基督實現首次實現蓋火金銀利潤為2490萬元,這是歷史並購彈效進程的重要里程碑
Speaker Change: As a result, our non-gap operating income was 104 million in the third quarter of 2024, representing a substantial increase of 40.9% year-on-year.
Nangab Operating Profit Margin was 2.6%
compared to 2.3% in the third quarter of 2023.
Speaker Change: In addition to non-gap operating income, we are delighted to report our first quarterly operating income and the gap measures at
$24.9 million
Speaker Change: This reflected our milestone of digesting the majority of the impacts from the amortization we have been reporting.
Speaker Change: In terms of shareholder returns, we will continue to promote re-purchasing. The current re-purchasing plan allows us to make a re-purchase of at least US$50 million before June 27, 2025. In the third quarter of 2020, we re-purchased nearly 4.9 million shares of ADS with US$12.1 million.
截至2020年9月30日,我們已經將2010萬美元回饋給股東,共計回購約820萬股ADS。
Speaker Change: In terms of our ongoing share buyback plan, under which we are authorized to repurchase up to 50 million U.S. dollars of our ADSes through June 27, 2025, we have returned approximately 20.1 million U.S. dollars to our shareholders for a total of 8.2 million ADSes as of September 30, 2024. In the third quarter of 2024, we used 12.1 million U.S. dollars to repurchase approximately 4.9 million ADSes.
Speaker Change: Since September 30, 2020, cash and cash gifts, limited funds, short-term investments, and third-party payment platforms
款项合计24亿元,三季度末综合现金较二季度末有所减少,主要是我们在应对九月和十月品牌旗舰进行发行相应的移旧换新,四季度电商大出门锁定货源,以及在公开市场进行股票回购消耗了部分现金。 我们的综合现金储备仍然充足,可以保障可持续的发展前景。
Speaker Change: As of September 30th, 2024, cash and cash equivalents restricted cash
Speaker Change: and repurchase our ADSs in the open market. Total cash balance dropped compared with the end of the second quarter. Even though our cash position remains strong, safeguarding of sustainable growth obstacles.
关于四季度之一,我们预计总收入将在47.4亿元至48.4亿元。
认同率增长22%-24.9%
以上是僅反映當前我們對市場合併狀況的初步看法,預期有可能的變化。
Speaker Change: Now turning to the business outlook. For the fourth quarter of 2024, we anticipate total revenues to be between RMB4.5 billion and RMB4.5 billion.
Speaker Change: 740 million, and RMB 4840 million, representing an increase of 22.4% to 24.9% year-over-year. Please note that this forecast only reflects our current and preliminary views on the market and operational conditions, which are subject to change.
Speaker Change: This concludes our prepared remarks. Operator, we are now ready to take questions.
We will now begin the question-and-answer session.
Speaker Change: To ask a question, you may press star then 1 on your touchtone phone.
Speaker Change: If you are using a speakerphone, please pick up your handset before pressing the keys.
Speaker Change: If at any time your question has been addressed and you would like to withdraw your question, please press star then 2.
Speaker Change: When asking the question, please state your question in Chinese first, then repeat your question in English, for the convenience of everyone on the call.
Speaker Change: At this time, we will pause momentarily to assemble our roster.
Thank you for watching. Bye-bye.
Speaker Change: The first question today will be from Joyce Ju with Bank of America. Please go ahead.
Speaker Change: Thank you for the opportunity to ask me a question. My question is to ask if it is possible to ask about the impact on the group with the new subsidies of Ejio Huanxin. Specifically, how should the business volume brought by Ejio Huanxin be quantified? How can we judge the potential of the business growth brought to us by Ejio Huanxin in the fourth quarter and 2025? Then I will translate my question.
Speaker Change: Could management help elaborate a bit on how trading subsidies are driving your business growth? Specifically, how do you quantify the incremental business from trade-ins and what are the expectations for trading business in the fourth quarter of 2024 and also the year after? Thank you.
Speaker Change: First of all, I would like to thank everyone for your support.
Speaker Change: We cooperate closely with JD in the process of landing large-scale consumer products in the country. The leading industry in the country supports rescue innovation. In the third quarter, the recovery growth brought by JD's recovery channels and rescue innovation business exceeded 40%.
Among them, blockchain has achieved over one hundred percent growth.
Speaker Change: The growth rate of the new Zeng family continues during the double 11 period. The growth rate of Weizhou and Tongbi is more than 246%.
Acarina is a fast-growing company.
Speaker Change: Shandong and Africa jointly provided a smooth distribution and distribution channel for users and made a joint investment during the Double 11 2. Added the influence of the mobile phone brand on the release of new products before the Double 11 and the brand's attention to the Double 11
Speaker Change: 3. The customer's habit is to move from placing an order in JD to placing an order in Yijiu Guanxin.
今年用舊手機3C小家電
折抵換購,新家電的業務可以活躍進行
Speaker Change: There are 100,000 orders during the Double 11, and users are using their old phones to buy new products and recharge their batteries.
Speaker Change: Thank you for your question. We've been working closely with JD.com as a first mover in supporting the National Consumer Group's trade-in program.
Speaker Change: In the third quarter, our recycling and trading business through JD.com increased by over 40%.
Speaker Change: with their trading business doubled. This momentum continued during the single-state grant promotion, where trading recycling value increased by 246% year-over-year.
Speaker Change: There were three factors. First, convenient trading options were offered with joint efforts by JD and AHS Recycle. Second, many phone brands launched new products ahead of the grand promotion coupled with trading subsidies. Third, consumers prefer trading services over regular recycling services.
Speaker Change: Although smartphones have not yet enjoyed direct subsidies from the current nationwide trading stimulation scheme, our partnership with JD on cross-category trading is thriving thanks to our industry-leading second-hand supply chain capabilities.
Speaker Change: Users are actively exchanging their used smartphones and small appliances for discounts on new home appliances. For instance, there were 100,000 orders where users traded in their used phones when purchasing new home appliances during the grant promotion.
Speaker Change: We think that the consumer way of saving money is still in its early stages. The internet business and the platform and the brand still need to continue to educate the users so that more consumers can experience a cost-effective way of spending.
舉個例子,我們預計京東通訊一年自營銷售超過6000萬臺的手機,隨著平臺合作等級的提升,我們在京東場景繼續提升,你就放心,深究率的空間依然巨大。
Xuefeng Chen, Jeremy Ji, Chen Chen
我们期待接下来在加大力度支持大规模设备更新,扩大消费品以交换新的品种和规模领域做更多的进展和延续的支持政策。
Speaker Change: We believe that in the change of consumer behavior of users, the necessity of saving money has become a mainstream way of spending. We firmly believe in the ability of the second-hand marriage chain to provide efficient infrastructure support for the industry and support the improvement of user consumption emotions. Next, we will continue to...
Speaker Change: to optimize the service experience of purchasing, ordering, ordering and delivery of Yijiu Huanxing and further improve the ratio of face-to-face transactions to better serve the Yijiu Huanxing and purchase demand of all Chinese users.
Speaker Change: We believe that the adoption of trading is still in its early stages.
Speaker Change: For instance, we expect that through JD Electronics, there is nearly 60 million units of smartphones distributed through this channel annually.
Speaker Change: and with the advancement of our collaboration, we expect the penetration rate of this scenario has substantial growth rate.
Speaker Change: As the Ministry of Finance advances its social and economic development objectives and fiscal policies, we look forward to progress on their goal to enhance the support for large-scale equipment upgrades and to expand the variety and scale of consumer goods trading programs.
Speaker Change: We believe that in the evolution of consumer behavior, trading is destined to become mainstream.
Speaker Change: We remain committed to strengthening our second-hand supply chain capabilities, providing efficient infrastructure support for the industry, and fostering improvements in consumer sentiment.
Speaker Change: As the next step, we continue optimizing private inquiry services, order placement, quality inspection, fulfillment experience, uplifting the proportion of face-to-face fulfillment orders, ultimately bringing our services to the next level.
Thank you for the question.
Thank you.
Speaker Change: The next question comes from Wan Zhao with CICC. Please go ahead.
Speaker Change: Good evening. Thank you for accepting my question. My question is that I would like to know more about the progress of our multi-product business in the third quarter.
Speaker Change: This year, we have seen a strong trend in the growth of multi-product recycling business. I would like to ask you about the contribution of this business, and how the company will plan the growth path of multi-product recycling business in the future.
Speaker Change: Thank you for taking my question. Could you please provide more color on the progress of your multi-category recycling business? This business segment has shown strength this year. What's the profit contribution and how do you plan to further grow this emerging segment? Thank you.
xie xie ti wo
Speaker Change: In the third quarter, the revenue of multi-products increased by more than 270%, creating a service revenue of more than 30 million yuan, or gross profit. After deducting the cost of door-to-door shopping and travel expenses, 46% was converted into the contribution profit of door-to-door shopping, further improving the competitiveness of door-to-door shopping.
Thanks for the question.
Speaker Change: Our multi-category recycling business is built on the AHS recycle brand and rapidly developed by leveraging the existing AHS stores.
It operates as an asset-light platform business model.
Speaker Change: To meet users' growing demands, we offer recycling services for luxury goods.
Speaker Change: After deducting store-end and fulfillment costs, 46% was converted to store-level operating profit. This has further enhanced the competitive strength of our stores.
Speaker Change: According to the category, gold and second-hand collectibles are the core categories of multi-products. The scale ranges from 77% to 18%. But in terms of service revenue contribution, the two categories are basically the same.
由于回收服务便捷,体验好,价格具有竞争力,报价透明,二回收的多品类回收服务受到了用户青睐。
Speaker Change: In China, the Australian luxury goods stock market is huge, and gold recycling has a huge scale. We have the advantage of service capability and price mechanism in such a huge market. It is worth looking forward to the long-term market space of corresponding multi-product recycling business.
Thank you. Thank you.
Speaker Change: Breaking down by category, gold and luxury goods remain core segments, accounting for 77% and 18% of the multi-category business respectively. In terms of revenue contribution, the two categories have similar levels.
Speaker Change: Users have embraced our multi-category setting services due to the convenient
and premium services. Competitive pricing and transparent service take great.
Speaker Change: We process the service capabilities and pricing advantages needed to thrive in this massive market, making the long-term potential for our multi-category cycling business promising.
我们在阿富汗门店绝交
多屏内回收服务,目前的769间二回收自营门店中,已经有587间实现了初步的多屏内回收服务的覆盖。
Speaker Change: In the large medium and low-end cities, we have the opportunity to explore the rich market of gold and other items in Jiamen branch. With the further expansion of the Alhuishan branch system, we are confident to serve the needs of more users.
Speaker Change: Of our 769 self-operated AHS stores, 587 now offer multi-category recycling services, with more services to add on down the road, gradually covering mainstream users in first and second-tier cities.
Speaker Change: In extended lower-tier cities, we are exploring opportunities to integrate the services with joint-operated stores. As we continue to expand AHS store networks, we are confident in our ability to meet the reflecting needs of more users.
Thank you.
Thank you.
Speaker Change: The next question comes from Michael Kim with Zach Small Cap Research. Please go ahead.
Speaker Change: Good morning or good evening, everyone. Maybe just to follow up on some of your earlier comments. Just curious to get your thoughts on
Speaker Change: What you're seeing in the market for pre-owned smartphones in terms of transaction volumes it would seem like there are tailwinds on both the supply side with ongoing growth and shipments of new smartphones in China as well as on on the demand side with
Speaker Change: rising demand for used phones just given the somewhat challenging macro backdrop. So just curious to get your thoughts there.
非常感谢提问,我先回答一下近期 号手手机交易量这个问题
Speaker Change: First of all, from the point of view of the supply chain, although the mobile phones in our main products have not directly benefited from the stock policy in the country's large-scale promotion and exchange of new backgrounds, but the ability to exchange new products in cross-products supports our better grasp of C-end recovery resources in the supply chain.
Speaker Change: Thank you for the question. First, on the supply side, under the National Trading Initiative, although our main category of mobile phones has not yet directly benefited from the subsidy policies, our cross-category trading capabilities have enabled us to better capture consumer and recycling sources.
Speaker Change: As discussed in the financial report conference, we have the ability to lead the industry in supply chain, including our ability to build ourselves and return to three-star preparation.
帮助我们实现商品的成色提升和销售
今年以来,我们的主营回收货源的合规翻新覆盖率从个位数初步提升到了有意义的双位数。
Speaker Change: to maintain a positive return on investment and growth. On the one hand, we will satisfy the needs of merchants who have the ability to buy and sell more by opening and closing factories. On the other hand, we will also play a role in the ability to select multiple channels of sales and directly meet the needs of Western users to purchase high-quality second-hand mobile phones that are cost-effective.
As mentioned in previous earnest calls,
Speaker Change: We have industry-leading supply chain capabilities, including our self-developed compliant refurbishment processes that enhance pre-owned products' quality and boost sales.
Speaker Change: This year, the coverage rate of compliant refurbishment in our 1P business has grown from single digits to meaningful double digits preliminarily. We are more effective at identifying products suitable for reconditioning, which has resulted in sustained revenue growth from refurbished products on both a quarterly and annual basis.
Speaker Change: On one hand, through our PGT marketplace, we are meeting the needs of more retailers. On the other hand, we leverage our self-operated AHS-ELECT retail channels to directly serve consumers seeking quality-assured, pre-owned smartphones.
Speaker Change: From our self-managed selection sales channels, this quarter, the selected retail income has achieved a 120% growth. Among them, the retail income of Erhuishou Men Dian and Guan Wang has increased by more than three times.
我们认为在消费缓行的趋势下,尤其是在下层人群市场,
Speaker Change: will have a lot of room for growth. We will also continue to increase investment in the brand, channels, and capability of QC sales.
Speaker Change: On retail distribution, our 1B to consumer revenue grew by 120% year-over-year.
Thank you.
Speaker Change: This concludes the question and answer session. I would like to turn the conference back over to management for any closing remarks.
Speaker Change: Thank you. Thank you all again for joining us. A replay of today's call will be available on our IR website shortly, followed by a transcript when ready. If you have any additional questions, please feel free to reach us at ir at hrenew.com. Have a nice day.
Thank you for watching!
Speaker Change: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.