Initiation of Coverage ATRenew Inc.: From REcycle to REtail, a path towards RE-rate

Research evidence excerpt

Initiation of Coverage ATRenew Inc.: From REcycle to REtail, a path towards RE-rate

cs devices recycled in China increased

from around 70m in 2021 to 120m in 2025, equivalent to 11%/20% of new devices sold in

respective years. ATRenew is currently JD’s exclusive trade-in partner for relevant consumer

electronics categories, with the existing cooperation framework extended to 2030. Within the 1P

segment, 1PtoC has been the key growth and margin driver. During 2023-25, 1PtoC delivered a

revenue CAGR of 86%, significantly outpacing the 12% CAGR of 1PtoB, with its contribution rising

to 45% as of Q126. Meanwhile, non-GAAP OPM has expanded from 0.1% in 2022 to 2.6% in 2025.

WHAT´S PRICED IN? ATRenew is now trading at just 6x 2027E PE (vs 33% earnings growth in 2028E), 1SD below its 3-year

mean and a 51%/86% discount to China internet/overseas secondhand platform peers. We think

ATRenew's promising earnings growth outlook is highly undervalued, especially with a 10% 2027E

dividend yield backed by management's stated commitment to shareholder returns.

Upside/Downside the nar planationimage/chartt

Spectrum rative

an ex

o

t for

t

repor

Plea se r efer of this

Value drivers (2027E) 1P revenue growth 3P revenue growth 1P GPM Non-GAAP OPM

US$7.57 upside 28% 15% 16.4% 3.8%

US$5.50 base 23% 10% 15.4% 3.5%

US$2.62 downside 18% 5% 13.4% 3.0%

Source: UBS estimates

Company Description Founded in 2011, ATRenew is a leading technology-driven recycling and trade-in platform for pre-

owned consumer products in China, with a core focus on consumer electronics. The company covers

the full value chain from consumer sourcing, standardized inspection, grading and pricing, to

redistribution through PJT Marketplace, Paipai Marketplace, AHS platforms and other channels. In