Smart Share Global Ltd. Q4 FY2022 earnings call

• Impact of COVID-19: COVID outbreaks in 2022 affected offline traffic, reducing revenue per power bank, GMV, and profitability. Outbreaks in Q4 led to week-over-week GMV declines. After lifting of containment, there was a surge in infections but signs of recovery from February 2023.
• Strategies: Transitioned to network partner model, reduced upfront fees, expanded coverage with 997,000 POI locations and 6.7 million power banks in circulation in 2022. Improved efficiency by reducing fixed costs, increasing BD efficiency, and introducing new hardware and software products. Focused on user experience with 24/7 support and high customer satisfaction rate.
• Recovery trends: 2023 Q1 GMV increased sequentially, and as of the second quarter, month-to-date GMV was up over 60% year-over-year.

For the fourth quarter of 2022, revenues were RMB 595.6 million. Mobile device charging business revenues were RMB 572.7 million, accounting for 96.2% of total revenues. Power bank sales were RMB 4.1 million, accounting for 2.5% of total revenues. Other revenue was RMB 7.8 million, accounting for 1.3% of total revenues. For the full year 2022, revenues were RMB 8.2 billion. Mobile device charging business revenues were RMB 2.8 billion, accounting for 97% of total revenues. Power bank sales were RMB 59.5 million, accounting for 2.1% of total revenues. Other revenue was RMB 24.6 million, accounting for 0.9% of total revenues.

• Energy Monster expects a strong rebound in revenues and GMV in 2023 based on current trends.
• The company expects to regain profitability for the full year 2023, having started to reach breakeven in March and with April GMV growth higher than March.

• Impact of COVID-19 outbreaks: Outbreaks led to reduced offline traffic, affecting revenue per power bank, GMV, and closure rate of location partners.

Q: Given the current positive trend, can the management share if the company has a real revenue guidance? And will the company be able to gain profitability in 2023? And if so, what is the target margin?

A: 2023 has started positively with clear year-on-year growth from February. They expect a strong rebound in revenues and GMV in 2023. They started to reach breakeven in March and expect to regain profitability for the full year 2023 based on current trends.

Q: Can management share a bit more on the difference between the current market and that of before COVID? Has there been any significant changes in terms of user habits or maybe POI competition? My second question is regarding the two models. Since the recovery process is already relatively clear, how would the company balance between the two models in the future?

A: User behavior in terms of ASP stayed relatively same, usage rate of power bank increased but not back to pre-COVID levels; users go out less on weekdays but more on weekends. POI composition: restaurants and shopping malls increased as percentage, entertainment and hotel POIs decreased. For balancing models, direct model focused on higher tier cities and large KAs, network partner model complements to capture rest of market, leveraging both models' scale and efficiencies to increase market share.