ATRenew: Old Phones, New Profits

The Buy Side
16 Followers
(16min)

Summary

  • ATRenew is a leading Chinese electronics refurbishment company, processing ~35 million devices annually with strong strategic partnerships (JD.com, Apple), 27% YoY revenue growth, and a scalable, low CapEx model.
  • The company is cash flow positive with ~$50M in annual free cash flow and holds a net cash position of $319M, ensuring operational resilience and flexibility.
  • With an enterprise value of $248M and a free cash flow yield of 21%, the stock is significantly undervalued, suggesting a fair value upside of 94% (target price $4.98).

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Investment Thesis

Today we're looking at a dominant Chinese player in the recycling industry of used electronics: ATRenew Inc. (NYSE:RERE). Due to their impressive revenue growth (+27% y/y), operational efficiency, low CapEx business model and

This article was written by

16 Followers
By analyzing more than 3,000 companies over the last ten years "The Buy Side" takes a disciplined, fundamentals-driven approach in identifying undervalued businesses. The mission is clear: build and preserve generational wealth by investing in high-quality companies at attractive prices.I've built my investment holding from scratch over nearly two decades — while studying & working — and have since reached the point where I live entirely off the returns it generates. This journey has deepened my conviction in long-term, fundamentals-based investing and the power of disciplined capital allocation.The focus is on dominant players in resilient sectors, led by shareholder-aligned management teams that generate strong free cash flows. This is made possible through a constant screening of around 10,000 publicly listed companies.Beyond investing, The Buy Side is committed to cultivating a community of like-minded value investors. We aim to empower the next generation of investors by sharing insights, tools, and frameworks to help them analyze companies with clarity and conviction.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of RERE either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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