Smart Share Global Surges 7% Pre-market on Q2 Results

Will strong business performance turn the company's stock on uptrend? Since IPO, shares are down 66%.
Aug. 23, 2021 11:49
Smart Share Global Surges 7% Pre-market on Q2 Results

The stock in Smart Share Global Ltd. (Nasdaq: EM) surged 7% in pre-market trading Monday after the company reported better-than-expected revenue for the second quarter.

The Chinese company, which offers mobile charging services, booked $150.6 million in revenue for the June quarter, up 53% year-over-year. Net income narrowed to $1.3 million, according to the report.

Smart Share Global generates the majority of its revenues from the rent of mobile power banks at public hubs under the brand Energy Monster. It also sells power banks – sales increased 83% to $4.9 million – and provides ad services, which brought in $1.4 million in revenue in the second quarter.

As of June, Smart Share offered its services in 771,000 unique locations, or points of interests (POIs), compared with 716,000 in March 2021. The company counted 255.1 million registered users.

Mars Guangyuan Cai, chairman and CEO of Smart Share Global, noted the company's expanded market share within the mobile device charging service industry to 35.2% during the first half of 2021.

In the third quarter, Smart Share said it expects to generate revenue of between 900 million yuan to 930 million yuan. The company noted that the forecast reflects the potential impact of the Covid-19 outbreak.

CFO Maria Yi Xin commented, "Looking into the third quarter, we continue to see headwinds that will impact what traditionally has been the peak quarter of the year."

For Smart Share Global, the financial report today marks its second as a publicly traded company. It debuted in a $150 million IPO in early April, priced below the expected range, at $8.50 apiece. Since, shares in the company have been on a slide, now worth $3.11 per share as of pre-market Monday.

On Friday, EM stock hit its 52-week low of $2.93 per share. Its ceiling has been $10 per share.

Backed by Alibaba Group, Softbank, Xiaomi Corp., and Hillhouse Capital, Smart Share said it was the largest mobile device charging provider in China in terms of revenue in 2020.

Separately, the company has been wrapped up in an ownership dispute with a Shanghai VC firm, which claimed chairman Cai owes it a 3% stake in the company.

EM, Energy Monster, Smart Share