Being in a continuously expanding industry race, the Monster Charging with the direct agency co-operation model has both sufficient fund reserve and profound brand advantage, scale advantage to "escort", and the fundamental of the company is both resilient and has sufficient growth potential.
For consumer companies, the resilience of operation and the growth potential are the challenges to be faced during the economic volatility recovery period. Looking back on the macroeconomic operation situation this year, the consumer market showed a trend of tortuous recovery. Taking the first quarter data as an example, in March, the year-on-year growth rate of China's total retail sales of consumer goods was 3.1%, lower than the market expectation of 4.8%, and also had a significant decline from 5.5% in January and February.
Facing a challenging market environment, the technology consumer company Monster Charging (EM.US) has shown a stable comprehensive performance. According to the company's Q1 2024 financial report recently disclosed, as of the end of the reporting period, Monster Charging's POI (number of points) reached 1.245 million nationwide, and the number of online shared charging treasures increased to 9.4 million, both of which refreshed historical records.
Along with the gradual adjustment of Monster Charging's business model to the agency model, the proportion of the company's agency points increased from 72.8% at the end of last year to 79.7%. With the support of business partners, Monster Charging was able to continue to efficiently expand and sink into more blank markets with high potential scenes. In the first quarter, Monster Charging added 12.8 million registered users, and the cumulative number of registered users reached 404.3 million, with 147 million orders done within this period.
Reflected in the financial data, the company achieved a revenue of 397.2 million yuan (RMB, same below) in Q1 2024. It is worth mentioning that since the second quarter of last year, the recognition of agency business revenue of Monster Charging has been adjusted from full amount to net amount. After that, the income earned from the split of the agency channel was no longer included in the revenue item. Therefore, looking at the revenue size of Monster Charging in the same caliber, it seems to have shrunk, but in combination with the operating data, the company's business development trend has not deviated from the original track. It is expected that the year-on-year growth rate of the company's revenue will return to positive in the next quarter.
During the same period, the adjusted net profit of Monster Charging on a non-GAAP basis was 3.8 million yuan. It is understood that Monster Charging incurred one-off costs in the process of promoting operational model adjustment, which temporarily disturbed the company's profit performance.
However, in the view of the Wisdom Finance APP, "the trouble of growth" is an indispensable part of the enterprise development process. If viewed from a longer-term perspective, after the operational model adjustment, Monster Charging's speed and coverage of expansion will be greatly improved. At the same time, the sale of devices can continue to reduce cash flow pressure and enhance self-generating capacity. With the stable development of the agency model, the company's profit potential will inevitably be better released in the future.
In addition to the resilient business development, there are also some "ignored" value signals in the quarterly report of Monster Charging. Data shows that as of the end of Q1 2024, Monster Charging's cash and cash equivalents, short-term investments, and restricted cash amounted to 3.3 billion yuan, nearly twice the current market value of the company.
Wisdom Finance APP believes that Monster Charging's "plenty of cash" is related to its excellent cash flow creation ability. Looking back on the historical data, from 2020 to 2023, Monster Charging's operating cash flow has always remained positive, reaching 536 million yuan, 227 million yuan, 708 million yuan, 416 million yuan, respectively, and the overall cash model of the business has maintained a steady and conservative style.
From a global perspective, strong cash flow creation ability and sufficient fund reserve are not only advantageous to the stable existing business foundation of Monster Charging, but also provide more financial and resource support to agents, thus forming a virtuous circle of operation. At the same time, it can also give the company the confidence to expand its ability circle and cultivate the second growth curve outside its main business. Based on this, Monster Charging still has sufficient growth potential.
Finally, from the industry perspective, according to the latest "2024 China Shared Charging Treasure Industry Research Report" released by iResearch Consulting, the scale of the shared charging treasure industry in 2023 was 12.6 billion yuan, and Monster Charging, with a GMV share of 36%, continues to lead. In addition, the report also predicted that under the support of rigid demand, the industry scale is expected to exceed 40 billion yuan in 2029, with a compound annual growth rate of up to 20.6% during this period.
Amidst the continuously expanding industry, the Monster Charging Company adopts the direct representation and co-management model. It has ample financial reserves as well as strong brand and scale advantages to accompany and safeguard it. Overall, the company's fundamentals demonstrate resilience and sufficient potential for future growth.