On March 12th, NYSE: RERE Group released its financial reports for the fourth quarter and full year of 2023. In the fourth quarter of 2023, Love Recycling achieved a revenue of 3.87 billion yuan, a year-on-year increase of 29.9%. The adjusted net profit was 91 million yuan, compared to 22.5 million yuan in the same period last year.
In 2023, the total revenue of Ai Recycling was 12.97 billion yuan, a year-on-year increase of 31.4%. The adjusted net profit was 230 million yuan, a significant increase from 50.8 million yuan in 2022.
Overall, Love Recycling's performance is impressive, not only achieving a historic high in quarterly revenue, but also achieving non GAAP level profitability for two consecutive years. Affected by the financial report, the stock price of Aihuo's stock rose more than 30% before the market.
At present, the sales revenue of self operated products is the most core source of revenue for Love Recycling. In 2023, the revenue of this business was 11.66 billion yuan, a year-on-year increase of 34.4%, accounting for approximately 89.9% of the total revenue. In the fourth quarter, the sales revenue of self operated products was 3.52 billion yuan, a year-on-year increase of 31%, accounting for about 91% of the total revenue.
The growth in sales revenue from self operated products is mainly due to the growth in sales of second-hand consumer electronics products through both online and offline channels of Aihuo. In terms of offline operations, as of December 31, 2023, Love Recycling's offline stores have spread to 268 cities across the country, with a total of 1819 stores.
In addition, Love Recycling's revenue from platform services last year was 1.31 billion yuan, a year-on-year increase of 9.6%. The platform service revenue in the fourth quarter was 350 million yuan, a year-on-year increase of 19.7%.
At present, the second-hand track where Love Recycling is located is also constantly experiencing policy "spring breeze". In February this year, the Opinions on Accelerating the Construction of a Waste Recycling System issued by the General Office of the State Council clearly proposed to improve the recycling network of waste appliances, electronic products and other waste materials and support the development of the "Internet plus+recycling" model.
In addition to second-hand consumer electronics, Love Recycling also continues to focus on "multi category recycling" in 2023, including photography equipment, luggage, watches, gold, famous wines, shoes and clothing, etc. According to the data, as of the end of 2023, iRecycle's multi category business has opened in 252 stores nationwide, with a GMV of over 1 billion yuan for multi category recycling throughout the year.
At the same time, Love Recycling is also rapidly advancing its "compliance refurbishment" strategy. Since 2023, Love Recycling has increased its operational capabilities for compliant refurbishment in major warehouses across the country. The annual revenue from self operated renovation business reached 810 million yuan, accounting for approximately 9.4% of the main revenue from recycling.
In the third quarter of last year, Love Recycling officially joined Apple's official recycling and trade in business system, serving Apple's users in mainland China's official website and offline flagship stores for recycling or trade in. In November of last year, iRecycle further obtained the recycling qualification for Apple's mainstream intergenerational products. Users can recycle and exchange iPhone 13, iPhone 14, and other models for new ones through Apple's direct sales channels. After Apple completes the front-end contract for the old phones, they will be handed over to Ai Recycling for disposal.
According to the financial report, in the fourth quarter of 2023 alone, Apple's official recycling business contributed 300 million yuan in revenue to iRecycle. In addition, Love Recycling is also collaborating with JD.com to provide users with "one-stop trade in" and "multiple item discounts for new" services. In 2023, JD's trade in business increased by 100% year-on-year.
As of the end of 2023, the total balance of cash and cash equivalents, restricted funds, short-term investments, and third-party payment platform accounts owned by Ai Hui was 2.85 billion yuan. As of the closing of the US stock market on March 11th, the stock price of Ai Hui was $1.19, with a total market value of approximately 1.925 billion yuan.