Reviving ATRenew: A Case for Chinese Internet Retail

A finance expert from Bloomberg presents a case for investing in ATRenew, a Chinese internet retail company. Despite being in a competitive and low-margin industry, the expert believes in ATRenew's potential due to its solid fundamentals and growth prospects. The article highlights the company's focus on sustainability, strong e-commerce platform, and increasing market share. While caution is advised when investing in Chinese equities, the expert sees ATRenew as a breakout candidate with significant upside potential.

ATRenew Inc. (NYSE: RERE) has been making waves in the Chinese internet retail sector with its impressive Q2 2025 earnings report. The company, known for its focus on sustainability and e-commerce, reported a 32.2% increase in sales revenues, totaling RMB 4,991.5 million or USD $696.8 million. This growth was driven by a 32.2% increase in consumer products transacted, reaching 10.3 million units compared to 8.4 million units in the same period last year.

The company's operational income also improved significantly, with a GAAP net profit of RMB 72 million, compared to a loss of RMB 43 million in Q1 2025. Non-GAAP adjusted income from operations stood at RMB 121.3 million, a substantial increase from the RMB 94.1 million reported in the same period last year.

ATRenew's strong fundamentals are reflected in its balance sheet, which shows a negative net debt (debt-cash) and a low debt-to-equity ratio, indicating a strong cash position and low liabilities. Despite its recent stock price rally, RERE is still trading substantially lower compared to its post-IPO price of more than $15 per share, suggesting potential for further upside.

The company's business outlook for Q3 2025 is highly positive, with sales expected to grow between 24.7% and 27.1% year-over-year. This growth is driven by the increasing popularity of trade-ins, supported by the Chinese government's subsidies and the launch of new devices by leading high-tech brands.

While investing in Chinese equities carries some risks, ATRenew's solid fundamentals and growth prospects make it a compelling opportunity. The company's focus on sustainability, strong e-commerce platform, and increasing market share position it well to capitalize on the growing demand for second-hand electronics and luxury goods in China.

References:
[1] https://seekingalpha.com/article/4815986-atrenew-reports-brilliant-q2-2025-earnings-results