ATrenew Group (RERE:NYSE), an electronic product circular economy enterprise, released its financial performance report for the fourth quarter and full year of the 2023 fiscal year on March 12, 2024.
The financial report reveals that in the fourth quarter of 2023, ATrenew's total revenue reached CNY 38.7 billion, representing a 29.9% year-on-year increase. Breaking down the revenue composition, 1P (self-operated) product sales income achieved a 31% year-on-year growth, reaching CNY 35.2 billion, while 3P (platform) service income was CNY 3.5 billion, reflecting a 19.7% year-on-year growth. The service fee rate significantly increased from 4.8% in the same period of 2022 to 5.36%.
In the fourth quarter of 2023, ATrenew's non-GAAP operating profit reached CNY 815.8 million, marking a 136% year-on-year increase. The company achieved operating profit for six consecutive quarters, with the quarterly non-GAAP operating profit margin rising from 1.2% in the same period of 2022 to 2.1%. The non-GAAP net profit reached CNY 91.02 million, setting a new historical high.
Looking at the full year, ATrenew's total revenue surged by 31.4% to CNY 129.7 billion, surpassing the growth rate of the second-hand industry and the consumer market. The 1P business income reached CNY 116.6 billion, representing a 34.4% year-on-year growth, while the 3P business income reached CNY 13.1 billion, showing a 9.6% year-on-year growth. Through adjusted development speed and single-unit strategies, the service fee rate increased by 92 basis points year-on-year to 5.39%.
Notably, in 2023, ATrenew's non-GAAP operating profit exceeded CNY 2.5 billion, marking a growth of over 35 times year-on-year, with a non-GAAP operating profit margin of 1.9%. The non-GAAP net profit reached CNY 230 million, reflecting a 342.9% year-on-year growth. By the end of the 2023 fiscal year, ATrenew Group achieved two consecutive complete fiscal years of profitability at the non-GAAP level. Simultaneously, the group achieved a net operating cash flow of CNY 240 million for the full year, surpassing expectations. As of the end of 2023, the total balance of the group's cash and cash equivalents, restricted funds, short-term investments, and third-party payment platform accounts reached CNY 28.5 billion, providing financial security for the stable operation of the group.
ATrenew's Chief Financial Officer, Chen Chen, stated, "In 2023, ATrenew's adjusted operating profit exceeded CNY 252 million. Through the effective balance of revenue growth and cost control, the overall profit of the group was promoted. This year, our primary task will continue to be the consolidation of the second-hand supply chain's capability and efficiency, while maintaining orderly investments in user service quality, user mentality, and price competitiveness to consolidate our leading industry position. Today, we are pleased to announce a new USD 200 million share repurchase plan, reaffirming the company's commitment to enhancing shareholder value."
As of December 31, 2023, ATrenew's offline stores span 268 cities nationwide, with a total of 1819 stores. Through the combination of offline stores and online platforms, the company continuously strengthens user penetration.
Building upon its established position in the secondhand 3C market, in 2023 ATrenew continued to emphasize its "multi-category recycling" strategy. This was achieved through store experiences and IT system upgrades, collaborating with professional service providers to enhance fulfillment capabilities. The implementation of the multi-category strategy further solidified the appeal of recycling scenarios to users, meeting diverse recycling needs and promoting the secondary circulation of more idle goods. By the end of 2023, the multi-category business had been rolled out in 252 stores nationwide, with an annual multi-category recycling GMV exceeding CNY 1 billion.
Simultaneously, ATrenew's "compliant refurbishment" strategy rapidly advanced, achieving a more complete value chain and greater profit margins. Since 2023, ATrenew has enhanced compliant refurbishment operational capabilities in major warehouses nationwide. The annual revenue from self-operated refurbishment business reached CNY 810 million, contributing 9.4% to the main recycling revenue. In the fourth quarter of 2023, the performance of compliant refurbishment business increased by 41.5% compared to the previous quarter.
In 2023, ATrenew entered an "efficiency year," promoting the application of automation technology to unleash economies of scale. The group continued to improve quality inspection accuracy, with the automated quality inspection system, represented by Matrix 3.0, reducing losses due to inspection errors by 19% throughout the year. Combined with big data algorithms, optimization of self-operated warehouse inbound and outbound shipping schemes reduced the non-GAAP fulfillment cost rate by 2.4 percentage points to 8.5% year-on-year.
With ATrenew's continuously strengthened secondhand supply chain capabilities, both B2B "Auction Hall" and B2C "Paipai" achieved remarkable performance. In the fourth quarter, Auction Hall platform revenue grew by 14.9% year-on-year, with 596,000 registered merchants, a 46.2% increase from 2022, and a fee rate increase of 69 basis points to 6.02%. Looking at the entire year, Auction Hall's overall fee rate reached 6.17%, a 189 basis point increase year-on-year. In 2023, the group's B2C retail GMV reached CNY 2.88 billion. Paipai's annual compliant refurbished retail revenue reached CNY 560 million, satisfying consumers' demand for high-quality secondhand purchases through self-operated after-sales warranty services.
Chairman and CEO of ATrenew, Chen Xuefeng, stated, "ATrenew is accelerating the creation of an industry-leading user experience and trust. The orderly development of trade-in programs with e-commerce platforms and mobile 3C brands; the service experience of multi-category recycling has gained more favor from users, making recycling prices more competitive. As we enter 2024, we maintain firm confidence in the group's core strategies, business tactics, and resilience in the circular economy."
As of the time of writing, ATrenew is priced at USD 1.59 per share, with a total market value of USD 3.49 billion.