Smart Share Global Limited Q1 FY2024 earnings call

• GMV showed a slight year-over-year increase in Q1 2024, with the 2024 Chinese New Year holiday period seeing a 23% YOY daily GMV growth, though March had a slight decline. - First and second tier cities had a slight GMV decline, while third tier and lower tier cities saw a 4% YOY growth. - Transportation, healthcare, popular locations, and education POI types had the fastest growth with YOY increases of 42%, 30%, 27%, and 23% respectively, while entertainment, hotels, and shopping saw slight declines. - POI coverage expanded to a record high, with a net increase of 11,000 POIs, bringing total POI count to over 1.2 million, and cumulative registered users reached over 400 million. - Transitioned to the network partner model while maintaining core direct model portfolios, with network partner POIs reaching 79.7% by end of Q1. - Launched an award system for network partners, optimized low-efficiency and underperforming POIs under direct model, and expanded KA partnerships. - Developed new power banks and cabinet machines for improved user experience and efficiency. - Explored new initiatives in the new renewable sector and continued a successful Power Bank Recycling Campaign.

For the first quarter of 2024, revenues were RMB397.2 million. Mobile device charging revenues, making up 95.2% of total revenues, were RMB378.1 million. Revenues from the direct model were RMB155.2 million, down 45.1% year-over-year, primarily due to a decrease in the number of POIs under direct model. Revenues from the network partner model were RMB222.9 million, down 58% year-over-year, mainly because of a change in contractual arrangements. Other revenues, accounting for 4.8% of total revenues, were RMB19.1 million, up 95.4% year-over-year due to new business initiatives and increased user and advertisement efficiency.

• No specific numerical guidance provided. - Continued to focus on strengthening operational scale and efficiency, including further KA acquisition under direct operations, expanding network partner coverage and support, and optimizing POI quality to enhance margins. - Acknowledged ongoing soft consumption but remained optimistic about long-term consumption recovery in China.

• Seasonal fluctuations and decline in consumption confidence led to a slight GMV decline in March. - General softness in consumption affected first and second tier cities' GMV. - Certain segments like entertainment, hotels, and shopping saw slight declines.

Q: Please get more color on the outlook for the next quarter and rest of the year in terms of GMV growth and profitability, and if there's a general recovery in April or May.

A: Our operations rely on offline market and food traffic. Weekend is good but weekday is weaker than before. Consumption still has fluctuations. We don't provide guidance at this point. For April and May, consumption is still a bit weak, but we'll continue executing strategies in network expansion and model rebalancing to tackle consumption environment challenges.

Q: Elaborate on how transition to network partner model benefits the company and profitability of the two models, and share on new initiatives and when they'll make meaningful financial impact.

A: Network partner model is better in economics and coverage, while direct model helps acquire KAs. Direct model is still under water in profitability, so we optimize portfolio. Network partner model has stronger economics as partners purchase cabinets and power banks upfront and we take a portion of GMV. New initiatives in renewable energy sector are in early stage but potential to contribute more in second half of the year.