FAST NEWS: Smart Share Global’s Second-Quarter Revenue Sags on Covid Closures

The latest: Smart Share Global Ltd. (EM.US), a supplier of rentable power banks, on Thursday reported its revenue fell 29% in the second quarter to 690.5 million yuan ($99 million). The company reported a loss of 184.5 million yuan for the period, compared with an 8.2 million yuan profit a year earlier.

Looking Up: The company forecast it will record revenue of between 770 million yuan and 800 million yuan in the third quarter, whose midpoint represents a milder 19% year-on-year decline.

Take Note: Despite the big revenue decline, the company’s cost of revenues actually rose by 17.4% during the quarter, and its R&D costs grew by 15.8%.

Digging Deeper: Smart Share Global is better known in China as Energy Monster, and makes its money by renting out power banks in shops, restaurants and other venues for consumers to recharge their electronic devices, mostly smartphones. The company listed on the Nasdaq last year, and has mostly reported losses over the last three years. Like many consumer-facing companies, it took a major hit from China’s frequent Covid-control measures in the first half of this year, including the frequent closure of shops, restaurants, gyms and other venues that are the main locations for its power banks.

Market Reaction: Smart Share Global’s shares fell 13% to close at an all-time low of $0.81 on Thursday in New York. The stock has traded at or below the $1 level since Aug. 19.

Reporting by Doug Young

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