The current China Securities Earnings Season is nearing its end. Judging from the disclosure, the full recovery of China Securities in 2023 has begun, and many companies that have exceeded expectations have emerged, such as JD, Ctrip, and Huazhu Group. With Monster Charging's recent results report for the fourth quarter and full year of 2023, this list continues to be extended.
What surpassed expectations is that although the power bank sharing circuit has faced a lot of pressure in recent years, and has even been questioned about “the more it rises, the more it loses,” Monster Charging's earnings report has caused controversy and made a name for itself. Financial reports show thatAll year 2023，Monster charging implementationBusinessrevenues! 30100 million yuan;Adjusted net profit was $108 million, compared with net loss of $683 million in 2022,performanceThe loss was drastically turned into a profit.
It is worth mentioning that Monster Charging announced its first dividend plan since listing in early March. After the market is closed on May 31, EST, it will distribute special cash dividends to registered shareholders.The dividend amount is $0.03 per ADS (American Depositary Shares), and the dividend rate will exceed 4% after paymentIt is comparable to high-dividend assets such as petroleum and petrochemicals.
The official announcement made a big dealdividendAfter that, Monster Charging took advantage of the heat to release its 2023 full-year results, once again injecting strength into the market.At the results conference call held on the evening of March 28,Monster chargingCEO Cai Guangyuan said, “Not only did net profit turn loss into profit, but our trading volume in 2023 also reached a record high.” According to reports, the monster will charge in 2023Mobile charging business GMV increased by more than 27% year-on-year.
Taking a deep dive into the financial data, we saw the logical support behind Monster Charging's strong reversal of losses.
First, consolidate and strengthen the advantages of scale. While shared charging networks continue to expand, Monster Charging's business data continues to climb. As of December 31, 2023, Monster Charging had a total of 1,234,000 POI (points) nationwide, with a cumulative total of 391.5 million registered users and 9.2 million online shared power banks, up 23.8%, 17.3%, and 36.6%, respectively. This shows that the boom in the shared power bank industry is unleashing demand, and the scale effect and network effect of leading companies are continuously expanding.
Second, the advantages of the “direct generation co-operation” model continue to be realized in performance. Monster Charging continues to promote the integration of the direct management model and the proxy model. Based on the long-term accumulation and accumulation of early cooperation with large cities and high-quality brands (KA), the service, operation and management experience has been successfully replicated to the agency business, boosting the rapid growth of the agency business. In 2023, Monster Charging added more than 4,000 new agents, and the proportion of agent points increased to 72.8%. The agency business contributed 1.8 billion yuan in revenue to Monster Charging, an increase of 49.3% over the previous year.
At the same time, starting in early 2023, a new generation of cabinets independently developed by Monster Charging has been put into use on a large scale.The new cabinet in terms of performance and costThey all showed significant advantagesOn the one hand, it has attracted more agents to charge monsters, and on the other hand, it has reduced equipment depreciation costs and improved asset efficiency.
Third,While its main business is developing steadily, Monster Charging has been incubating innovation in a low-key manner until nowNew businessFor the first time, it showed a good growth momentum. In 2023, Monster Charging's other revenue increased by 264.0% from 24.6 million yuan in 2022 to 89.4 million yuan. This portion of revenue comes from advertising revenue and new business. It has enhanced the resilience and elasticity of its performance to a certain extent.
Based on the results for the full year of 2023, we believe that the certainty that Monster Charging will continue to make profits in the future is gradually showing.
As far as the external environment is concerned, since 2023, the warm trend of offline consumption has continued to spread to the shared power bank industry. Compared with 2023, 2024 is positioned as a consumption promotion year. The focus will be on cultivating and expanding new types of consumption, and the popularity of consumption has continued unabated.
Admittedly, the strong recovery in Monster Charging's performance is to a certain extent taking advantage of the “Dongfeng” of the recovery of offline consumption and service industries, that is, maintaining a high boom in the core scenario of shared power banks; however, this is no accident. In 2023, under the impetus of the core strategy of “maintaining steady growth+improving operational efficiency”, Monster Charging began a key transformation. While maintaining resonance with the wave of consumer recovery, the quality of operations improved markedly.
Xu Peifeng, president of Monster Charging, said, “We are expanding the shared charging network through dual-mode collaborative development to cover more regions and scenarios. By actively recruiting new agency partners, the penetration of existing regions has been strengthened, and the development potential of new regions has been continuously exploited. Furthermore, with the dual model network effect and Monster Charging's brand effect mutually reinforcing, we have a significant advantage in expanding cooperation with chain brand merchants.”
In terms of business model considerations, the direct management model has an advantage in brand building, etc., and the agency model has advantages in terms of scale expansion and profit. Combined with their respective advantages, the direct generation co-operation model can achieve “1+1>2” efficiency. Monster Charging promotes the collaborative development of direct generation joint ventures, which is expected to further boost its own business growth and enhance profitability.
At the same time, from the supply side, Monster Charging helps further optimize service quality and user experience by giving full play to full-scenario penetration and dual-mode development advantages, efficiently connecting users, agents, and merchants, continuously enriching the supply of charging resources, continuously optimizing operation, technology, and brand sides, stimulating new demand, providing new supply, and improving resource matching and operational efficiency.
As of the end of 2023, Monster Charge's cash and cash equivalents, short-term investments, and restricted cash reached 3.3 billion yuan. In the “cash is king” business of shared power banks, sufficient capital reserves are the foundation for maintaining stable business development, and at the same time allow companies to invest more bullets inIterative upgrading of hardware and software functions,Supply chain optimizationandTalent development and organizational skillslifting，Second curve explorationetc., supported by building a more stable and efficient chassisMedium- to long-termHigh quality development.
Returning to the perspective of the capital market, although the dividend plan was announced in early March, this does not affect Monster Charging's still in an underrated position. The market value of less than $200 million did not match the performance situation. When will Monster Charge, which combines profit certainty, high dividends, and undervalued attributes, open an upward channel?