Research Coverage on Small and Micro-Cap Companies, Zacks Small Cap Research

Zacks Small Cap Research

Research Coverage on Small and Micro-Cap Companies

Zacks Small Cap Research provides research coverage on small- and micro-cap companies that are “under-followed” or “under-valued” by Wall Street. We produce high quality equity research for the institutional and retail investor on microcap firms we believe are well positioned for future growth. The Zacks SCR analyst team has an average of 20 years of experience in investment research. We conduct significant due diligence in an effort to maintain the highest quality small-cap universe.

Equity Bottom-Up

<ul><li>Key 3Q24 takeaways include: 1) steady revenue growth reflecting government initiatives to promote consumer spending and trade-in activity, increasingly leveraging the company's strategic partnership with JD.com, and rising brand awareness/visibility 2) we expect multi-category contribution to continue to build, as management leverages the company's pricing and customer service competitive advantages to increasingly tap into massive/growing gold and luxury goods recycling markets 3) management remains focused on growing the number of new store openings over the next several years to meet rising demand trends and further expand the footprint and 4) senior officials seem intent on increasingly reinvesting in the business to accelerate customer acquisition growth, while remaining focused on managing expenses to support profitability.</li></ul>

Key 3Q24 takeaways include: 1) steady revenue growth reflecting government initiatives to promote consumer spending and trade-in activity, increasingly leveraging the company's strategic partnership with JD.com, and rising brand awareness/visibility 2) we expect multi-category contribution to continue to build, as management leverages the company's pricing and customer service competitive advantages to increasingly tap into massive/growing gold and luxury goods recycling markets 3) management remains focused on growing the number of new store openings over the next several years to meet rising demand trends and further expand the footprint and 4) senior officials seem intent on increasingly reinvesting in the business to accelerate customer acquisition growth, while remaining focused on managing expenses to support profitability.

RERE: 3Q24 Earnings - Adjusted Operating Income Beat on Higher Revenues/Margins  Investing for Growth

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/atrenew-inc" target="_blank" data-smartkarma-citation="entities:33426:1" rel="noopener">ATRenew (RERE US)</a> operates the largest pre-owned consumer electronics transactions and services platform in China. It is listed in June 2021 at US$14 per ADS. </li>
<li>The shares are down 63% YTD largely due to the tech market sell-off. Unlike most tech companies, ATRenew is starting to deliver growth with profits, cash generation and share buybacks.</li>
<li>The valuation is undemanding compared to a peer group of pre-owned marketplaces and global online retail marketplaces. It will also appeal to investors with an ESG mandate.</li>
</ul>



ATRenew (RERE US) operates the largest pre-owned consumer electronics transactions and services platform in China. It is listed in June 2021 at US$14 per ADS. 
The shares are down 63% YTD largely due to the tech market sell-off. Unlike most tech companies, ATRenew is starting to deliver growth with profits, cash generation and share buybacks.
The valuation is undemanding compared to a peer group of pre-owned marketplaces and global online retail marketplaces. It will also appeal to investors with an ESG mandate.


ATRenew (RERE US): Pre-Owned Satisfaction

<ul><li>Key 2Q24 takeaways include: 1) revenues likely to step function higher in the near term (4Q24 launch of Apple's iPhone 16) and beyond reflecting building recycling volumes and rising demand for pre-owned products, particularly in light of ongoing government support 2) management remains focused on increasingly tapping into recycling activity beyond consumer electronics (luxury goods, gold, jewelry, premium liquor), as well as further expanding the company's store footprint and upgrading existing locations to better showcase multi-category products and 3) we look for further margin expansion looking out to 2H24 and 2025 given a more favorable product/distribution mix.</li><li> From a stock perspective, we see further upside for RERE, as awareness and appreciation of the company's business model, growth prospects, competitive positioning, and valuation disconnect increasingly take hold.</li></ul>

Key 2Q24 takeaways include: 1) revenues likely to step function higher in the near term (4Q24 launch of Apple's iPhone 16) and beyond reflecting building recycling volumes and rising demand for pre-owned products, particularly in light of ongoing government support 2) management remains focused on increasingly tapping into recycling activity beyond consumer electronics (luxury goods, gold, jewelry, premium liquor), as well as further expanding the company's store footprint and upgrading existing locations to better showcase multi-category products and 3) we look for further margin expansion looking out to 2H24 and 2025 given a more favorable product/distribution mix. From a stock perspective, we see further upside for RERE, as awareness and appreciation of the company's business model, growth prospects, competitive positioning, and valuation disconnect increasingly take hold.

2Q24 Earnings: Adjusted Operating Income Beat on Higher Revenues  Growth Outlook Remains Bright

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Event-Driven

<ul>
<li>PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.</li>
<li>The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.</li>
<li>In this note, we'll talk about the latest developments, possible outcomes and implications.</li>
</ul>


PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.
The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.
In this note, we'll talk about the latest developments, possible outcomes and implications.


China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>
<a href="https://www.smartkarma.com/entities/atrenew-inc" target="_blank" data-smartkarma-citation="entities:33426:1" rel="noopener"></a><strong><a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com Inc. (9618 HK)</a></strong>-backed<a href="https://www.smartkarma.com/entities/atrenew-inc" target="_blank" data-smartkarma-citation="entities:33426:1" rel="noopener"><strong> ATRenew (RERE US)</strong></a>, one of the pioneers of China's circular economy, registered its first non-GAAP net profit in the 3Q22.</li>
<li>The improvement pivoted off core business stability (consumer electronic devices recycling and sales) and an increasing revenue stream from its multi-category recycling business, including luxury goods.</li>
<li>This is all positive. However ATR, like all US-listed China plays, faces the prospect of a potential delisting under the HFCAA just 16 months away.</li>
</ul>



JD.com Inc. (9618 HK)-backed ATRenew (RERE US), one of the pioneers of China's circular economy, registered its first non-GAAP net profit in the 3Q22.
The improvement pivoted off core business stability (consumer electronic devices recycling and sales) and an increasing revenue stream from its multi-category recycling business, including luxury goods.
This is all positive. However ATR, like all US-listed China plays, faces the prospect of a potential delisting under the HFCAA just 16 months away.


China

ATRenew Inc. owns and operates pre-owned consumer electronics transactions and services platform. The Company develops technology-driven pre-owned consumer electronics transactions and services platform. ATRenew serves customers worldwide.

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ATRenew (RERE US)

RERE: 3Q24 Earnings - Adjusted Operating Income Beat on Higher Revenues/Margins Investing for Growth

Key 3Q24 takeaways include: 1) steady revenue growth reflecting government initiatives to promote consumer spending and trade-in activity,...

Zacks Small Cap Research

ATRenew (RERE US): Pre-Owned Satisfaction

Unlike most tech companies, ATRenew is starting to deliver growth with profits, cash generation and share buybacks. The valuation remains undemanding.

Arun George

2Q24 Earnings: Adjusted Operating Income Beat on Higher Revenues Growth Outlook Remains Bright

Key 2Q24 takeaways include: 1) revenues likely to step function higher in the near term (4Q24 launch of Apple's iPhone 16) and beyond reflecting...

Zacks Small Cap Research

China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US...

Sumeet Singh

ATRenew: Round & Round It Goes

ATR is trading cheap. Even cheaper when taking into account its net cash position. I would not be surprised to see ATR seek a secondary listing in...

David Blennerhassett

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