AiHuiShou International (NYSE: RERE), a Chinese reseller of used mobile phones, skyrocketed 11% in early trading Tuesday on better-than-expected revenue in the second quarter.
In its first earnings release since becoming a publicly traded company in New York, AiHuiShou reported 56% year-over-year revenue growth to $289.3 million in the three months through June. Total GMV increased nearly 70% to 7.8 billion yuan, and the number of products transacted was up 28% to7.8 million, according to the report.
Net loss in the second quarter widened nearly fivefold to $78.3 million, or $2.09 per share.
AiHuiShou's founder, chairman, and chief executive, Kerry Xuefeng Chen, noted the upgrade of the company's supply chain and automated operations.
Chief financial officer Rex Chen added, "Our proprietary system for automated inspection, grading, and pricing serves as the essential technical foundation to empower small merchants and provide optimal transaction services for our PJT Marketplace and Paipai Marketplace."
In the third quarter, AiHuiShou expects to generate between 1.87 billion yuan and 1.93 billion yuan in revenue.
The results sent RERE stock to $12.23 before noon Tuesday – but were not strong enough to take the stock up to IPO level. The recycled electronics company lifted off in mid-June after pricing at $14 per share and raised $227 million on Wall Street to boost its technology, sales channels, and service offerings. Since IPO to date, RERE shares are down about 13%.
In the statement today, AiHuiShou also said the underwriters exercised the greenshoe option and acquired and additional 1.9 million American depositary shares upon the IPO. Overall, the proceeds from the offering amounted to $253.5 million.
CEO Chen said about the offering, "Our NYSE listing in June marked a paramount milestone following a decade of commitment and effort to fulfill our mission to give a second life to all idle goods." The company has expressed its support of the development of a circular economy according to Beijing's long-term initiatives.
Chinese tech giant JD.com (Nasdaq: JD; HKEX: 9618) owns a stake of about 32% in AiHuiShou.