(Yicai Global) Dec. 1 -- Shares in Smart Share Global, better known as Energy Monster, plummeted yesterday after the Chinese company, which hires out charging stations for mobile devices in shopping malls and other public locations, said it was running at a loss in the third quarter due to continued sporadic outbreaks of Covid-19.

Energy Monster’s stock price [NASDAQ:EM] plunged 11.2 percent to close at USD2.07 yesterday. The stock has lost 75 percent of its value since it went public in April.

The company racked up losses of CNY79.4 million (USD12.3 million) in the three months ended Sept. 30, a huge turnaround from the CNY108.6 million profit it made during the same period last year, according to its latest earnings results released yesterday. Revenue nudged up slightly by 0.6 percent to CNY930 million (USD146 million).

Revenue is likely to drop by as much as 14 percent in the fourth quarter from the previous quarter as the outbreaks continue, the Shanghai-based firm said.

“The challenges set forth by the ongoing regional Covid-19 outbreaks in China have brought challenges to our operations during the third quarter and will continue to impact the fourth quarter,” said Chairman and Chief Executive Mars Cai. “The outbreaks have country-wide impact as both affected and unaffected regions alike have experienced decreases in offline foot traffic and spending, resulting in a decline in traffic to our location partners.”

The power bank rental sector has also seen profits dwindle amid intense competition. In order to get access to prime locations, they need to pay high admission fees and commissions. Energy Monster is paying huge commissions of up to 75 percent of charging rates, according to Yicai Global research. As a result, its profit margin in the first half was only 1.28 percent, much lower than last year’s 2.7 percent and 8.2 percent in 2019.

With only one source of income, power bank rental firms have had no choice but to raise their rates to survive. They now charge between CNY4 (USD0.63) and USD6 per hour, compared with CNY1 a few years ago. Regulators are in talks with eight service providers, including Energy Monster, to regulate market prices and competitive behavior.

Editors: Dou Shicong, Kim Taylor