Latest news with #EricLongChen
Associated Press
5 days ago
- Business
- Associated Press
ZKH Launches Taicang Smart Manufacturing Base, Setting New Standard in Industrial Product R&D and Production Integration
SHANGHAI, June 4, 2025 /PRNewswire/ -- ZKH Group Limited ('ZKH' or the 'Company') (NYSE: ZKH), a leading maintenance, repair and operations ('MRO') procurement service platform in China, today announced the official commissioning of its state-of-the-art smart manufacturing base in Taicang. This facility marks a significant milestone in the Company's strategic effort to integrate R&D and production for industrial products. Covering 30,000 square meters, the Taicang manufacturing hub is poised to substantially bolster ZKH's product R&D capabilities through a combination of proprietary and collaborative innovation. The facility will play a crucial role in expanding the Company's intellectual property portfolio, driving the growth of its private label products, which grew approximately 40% year over year and contributed over 8% of total GMV in the first quarter of 2025. A key feature of the new facility is a CNAS-accredited (China National Accreditation Service for Conformity Assessment) industrial product testing laboratory. The facility ensures rigorous quality assurance and caters to the rising demand for high-quality, reliable industrial supplies. Designed for rapid transition from research to market, the center optimizes product design, testing, and small-batch production, enabling ZKH to respond swiftly to evolving customer needs and technological advancements. Additionally, this development signifies a strategic step forward in strengthening industry ecosystems and supply chain capabilities through collaborative innovation with strategic partners. Mr. Eric Long Chen, Chairman and Chief Executive Officer of ZKH, stated, 'Our new Taicang Smart Manufacturing Base enhances ZKH's capabilities in product development and comprehensive supply chain management. By integrating R&D, testing, and production, we are transforming traditional manufacturing and collaborating closely with our partners to deliver innovative, competitive solutions. These initiatives will accelerate industrial digital transformation and contribute to regional economic vitality.' About ZKH Group Limited ZKH Group Limited (NYSE: ZKH) is a leading MRO procurement service platform in China, underpinned by robust supply chain capabilities and dedicated to serving customers globally through a product-led, agentic AI-driven approach. Through its primary online platforms, the ZKH platform and the GBB platform, along with innovative technology and extensive industry expertise, the Company provides bespoke MRO procurement solutions to a diverse and loyal customer base. These solutions encompass hyper-personalized product curation from a comprehensive selection of quality products at competitive prices. Additionally, the Company ensures timely and reliable product delivery through professional fulfillment services. By focusing on reducing procurement costs and addressing management efficiency challenges, ZKH is transforming the opaque MRO procurement process and empowering all stakeholders across the value chain. For more information, please visit: Safe Harbor Statement This press release contains forward-looking statements. These statements are made pursuant to the 'safe harbor' provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as 'may,' 'will,' 'expects,' 'anticipates,' 'aim,' 'estimates,' 'intends,' 'plans,' 'believes,' 'is/are likely to,' 'potential,' 'continue,' and similar statements. Among other things, the quotations from management in this press release and ZKH's strategic and operational plans contain forward-looking statements. ZKH may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the 'SEC'), in its annual report to shareholders, in press release and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about ZKH's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: ZKH's mission, goals and strategies; ZKH's future business development, financial condition and results of operations; the expected changes in its revenues, expenses or expenditures; the expected growth of the MRO procurement service industry in China and globally; changes in customer or product mix; ZKH's expectations regarding the prospects of its business model and the demand for and market acceptance of its products and services; ZKH's expectations regarding its relationships with customers, suppliers, and service providers on its platform; competition in the Company's industry; government policies and regulations relating to ZKH's industry; general economic and business conditions in China and globally; the outcome of any current and future legal or administrative proceedings; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in ZKH's filings with the SEC. All information provided herein is as of the date of this announcement, and ZKH undertakes no obligation to update any forward-looking statement, except as required under applicable law. For investor and media inquiries, please contact: In China: ZKH Group Limited IR Department E-mail: [email protected] Piacente Financial Communications Hui Fan Tel: +86-10-6508-0677 E-mail: [email protected] In the United States: Piacente Financial Communications Brandi Piacente Tel: +1-212-481-2050 E-mail: [email protected] View original content: SOURCE ZKH Group Limited
Yahoo
21-05-2025
- Business
- Yahoo
ZKH Group Ltd (ZKH) Q1 2025 Earnings Call Highlights: Strong Customer Growth and Improved Cash ...
Revenue: RMB1.94 billion, a 4% increase year-over-year. Operating Loss: Approximately RMB80 million, a 37.7% improvement year-over-year. Net Loss: Around RMB66 million, a 26.6% improvement year-over-year. Net Cash Outflow from Operating Activities: RMB97 million, compared to RMB220 million in the same period last year. Total GMV: RMB2.17 billion, with underlying GMV maintaining robust double-digit year-over-year growth. Gross Profit Margin: Slightly decreased to 17.2% from 18% in the prior year period. Operating Expenses: Decreased by 10.9% year-over-year to RMB412.9 million. Marketplace Take Rate: Increased by 235.9 basis points year-over-year to 14%. Private Label Products GMV: Exceeded RMB190 million, a 40% increase year-over-year. GBB Platform Customer Growth: Over 24,000 customers, up 73% year-over-year. GBB Platform Sales Growth on Tmall: Over 260% quarter-over-quarter. Warning! GuruFocus has detected 2 Warning Sign with ZKH. Release Date: May 20, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. ZKH Group Ltd (NYSE:ZKH) experienced a 30.3% year-over-year increase in the total number of customers, surpassing 60,000. Sales to industry key accounts and regional SME customers achieved double-digit growth. The company achieved single-month profitability in March despite seasonal impacts and investments in US operations. Net cash outflow from operating activities improved significantly, reducing from RMB220 million to RMB97 million year-over-year. The GBB platform, in partnership with Tmall, achieved over 260% quarter-over-quarter sales growth, with customer growth accelerating by 73% year-over-year. Sales to state-owned enterprises (SOEs) and central SOE customers declined significantly year-over-year due to a high comparison base and business optimization initiatives. The company's operating loss was approximately RMB80 million, and the net loss was around RMB66 million, despite improvements. Gross profit margin slightly decreased to 17.2% from 18% in the prior year period. Marketplace revenue declined due to the prior year's high comparison base. Operating expenses, although reduced, still included approximately RMB10 million in US-related expenses, impacting overall cost efficiency. Q: Could management share the impacts from tariffs on your domestic and US business, and the measures taken by the company? Is there a timeline for entering new markets beyond the US, such as Europe? A: Eric Long Chen, Chairman and CEO, explained that US tariffs are not a negative factor but rather a tailwind for expanding the US business. The US primarily imports MROs from China and Southeast Asia, and ZKH has prepared by building a reserve of suppliers from these regions. The company plans to start its business in Europe in the second half of the year, focusing online across Europe and offline in Germany and Hungary. Southeast Asia operations have begun, with a focus on serving Chinese companies there. Q: Could you please share updates on this year's product strategy, including key product categories and private label brands? A: Eric Long Chen stated that ZKH has 32 product lines across five categories: spare parts, chemicals, processing, manufacturing, general consumables, and administrative materials. The focus for 2025 will be on industrial-grade MRO products and strengthening private labels, particularly in chemicals and processing. Private labels will involve proactive R&D and design to enhance competitiveness and support overseas business. Q: Can management share updates regarding the company's business and financial outlook for the upcoming quarters? A: Eric Long Chen mentioned that ZKH achieved its Q1 targets and expects business with SOEs and central SOEs to accelerate in the next quarters. For Q2 to Q4, especially Q3 and Q4, the company aims for double-digit GMV growth. Profitability is expected to break even in Q2, with positive profitability in Q3 and Q4. For 2025, GMV will be positive year-over-year, with domestic business profitability and overall breakeven for the group. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
21-05-2025
- Business
- Yahoo
Q1 2025 ZKH Group Ltd Earnings Call
Jin Li; Head of Investor Relations; ZKH Group Ltd Eric Long Chen; Chairman and Chief Executive Officer; ZKH Group Ltd Chun Lai; Chief Financial Officer; ZKH Group Ltd Leo Chiang; Analyst; Deutsche Bank Xiaodan Zhang; Analyst; CICC Ella Ji; Analyst; China Renaissance Securities Operator Ladies and gentlemen, good day, and welcome to ZKH Group Limited's first-quarter 2025 earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Jin Li, Head of Investor Relations. Please go ahead. Jin Li Thank you, operator. Thank you, everyone, and welcome to our call today. Joining us today are Mr. Eric Chen, our Founder, Chairman, and Chief Executive Officer; and Ms. Max Lai, our Chief Financial Officer. Before turning the call over to Eric, I'd like to briefly review our safe harbor provisions. Please note that the comments made during today's call represent management's views as of today and may include forward-looking statements. Please refer to our latest safe harbor statement in the earnings release on our IR website. We will also discuss certain non-GAAP financial measures for comparison purposes only. Please refer to the earnings release for definitions of these measures and a reconciliation of GAAP to non-GAAP results. With that, I will now turn the call over to Eric. Eric, please go ahead. Eric Long Chen (spoken in Chinese) (interpreted) Hello, everyone. Thank you for joining our first quarter 2025 earnings conference call for ZKH. In the first quarter, our platforms continue to gain momentum, with the total number of customers exceeding 60,000, representing a 30.3% year-over-year increase. Sales to industry key accounts and regional SME customers both achieved double-digit growth. However, sales to state-owned enterprises or SOEs and central SOE customers declined significantly year-over-year in the first quarter, mainly due to the high comparison base last year and a result of our business optimization initiatives since the second half of 2024. Consequently, our first quarter revenue reached RMB1.94 billion, representing a 4% increase year-over-year. (spoken in Chinese) (interpreted) Regarding margins, our operating loss was approximately RMB80 million, and our net loss was around RMB66 million, representing meaningful improvements of 37.7% and 26.6% year-over-year, respectively. Despite the negative impact -- seasonal impact from the Chinese New Year in January and February, we were able to achieve single-month profitability in March. We would like to emphasize that this achievement was reached despite investments in our US operations and in the absence of government subsidies in the first quarter of this year, unlike the same period last year. This demonstrates that the profitability of our domestic business continues to strengthen at the operational level. (spoken in Chinese) (interpreted) Additionally, our cash flow remains resilient and shows continued improvement. Net cash outflow from operating activities was RMB97 million in the first quarter compared to an outflow of RMB220 million in the same period last year. This continued improvement underscores our strong financial resilience. (spoken in Chinese) (interpreted) Now let's shift our focus to our domestic and global business performance in the first quarter, along with our platform developments and advancements in the use of AI technologies. In the first quarter, we delivered solid, high-quality growth, both domestically and globally. (spoken in Chinese) (interpreted) Starting with our domestic business. Our dual platform strategy aims to meet diverse customer demands. The ZKH platform serves mid- to large-sized enterprise customers, while the GBB platform caters to micro and small businesses through an e-commerce model. ZKH platform experienced strong growth in both sales and customer numbers from our industry key accounts. GMV from these key accounts increased by 19.7% year-over-year with over 20% growth in sectors such as new energy vehicles, electricals, telecommunications and electronics and pharmaceuticals. This success is the result of our targeted efforts to curate and manage industry-specific and customer-specific product pools, leveraging AI to gain deeper insights into customer needs and provide tailored product selection and recommendations, which also helped to increase our wallet share. As enterprise procurement continues to shift online and as we expand our coverage to more ZKH customers, subfactories and enhance our cross-selling capabilities across production lines, we remain confident that our sales to industry key accounts will maintain strong growth momentum. (spoken in Chinese) (interpreted) For regional SME customers, our region-based service and grid-based staffing strategies yielded positive outcomes. In the first quarter, both sales and customer numbers from regional SME customers on the ZKH platform recorded double-digit growth. Notably, sales in several regions, including Guangdong, Zhejiang, and Fujian provinces, as well as Beijing, each posted more than 20% year-over-year growth. This strong performance was attributable to our enhanced local services for regional customers as well as accelerated factory coverage, market reach, and customer acquisition. (spoken in Chinese) (interpreted) For SOE and central SOE customers, our sales declined significantly year-over-year in the first quarter, mainly due to the high comparison base in the same period last year and the result of our business optimization initiatives since the second half of last year. As we mentioned during our last earnings call, we have completed these business adjustments, and the impact has gradually tapered off. Our SOE and central SOE business have entered a stabilization phase in the first quarter. We remain confident that, building on our supply chain advantages and proven value we deliver to customers, our SOE and central SOE business will regain growth momentum in the second half of this year. (spoken in Chinese) (interpreted) Regarding gross margin, driven by our optimized procurement costs and rapid GMV growth from our high-margin private label products, both the gross margin of our product sales model, or 1P, and the take rate of our marketplace model, or 3P, on the ZKH platform improved significantly. This marked the fifth consecutive quarter of year-over-year improvement in both gross margin and take rate, highlighting our team's strong execution in cost reduction and efficiency enhancement. In the first quarter, the GMV of our private label products exceeded RMB190 million and an increase of approximately 40% year-over-year. (spoken in Chinese) (interpreted) Now let's turn to the GBB platform. Our strategic partnership with Tmall has been fruitful. Since our partnership began in the fourth quarter of last year, GBB has operated eight stores on Tmall as of the end of March. We expect that the total number of stores will reach 24 by the end of this year. In the first quarter, this business segment on Tmall achieved a quarter-over-quarter sales growth of over 260%. Customer growth on GBB platform also accelerated with over 24,000 customers, up 73% year-over-year, benefiting from our strengthened Tmall partnership. As we expanded our store footprint on Tmall to reach more SME and micro businesses, and focused on high-margin MRO categories, our gross margins for GBB platform improved significantly in the first quarter. With more stores lined up to launch and start operations on Tmall this year, we expect to maintain strong growth momentum in our Tmall business across sales, customer base, and gross margin, thereby driving the overall growth of the GBB platform. (spoken in Chinese) (interpreted) Overall, the Chinese MRO market is vast and highly fragmented, with online penetration still at a relatively modest level. We believe China's MRO market offers extensive potential to propel both scale and profitability growth. As for our global expansion, the United States has been our first destination. Our US subsidiary, North Sky, and our US stand-alone website officially launched in December last year. We have implemented a localization strategy in the US market, leveraging our supply chain strengths, offering selected high-value-for-money products, and utilizing innovative technologies to establish a strong presence. By the end of March, the North Sky platform had launched over 500 SKUs across categories such as personal protective equipment, or PPE, hand tools, power tools, packaging, and HVAC systems. Notably, our power tools, hand tools, and PPE categories have steadily risen in Google Search rankings. In the first quarter, both revenue and customer numbers doubled month-over-month. (spoken in Chinese) (interpreted) In the second half of the year, we plan to launch a mobile app version of our US stand-alone website, while scaling our SKU portfolio beyond 1,500 items to further enhance product coverage and customer experience. Our goal is to provide the world's best MRO offerings across global markets. We have actively initiated global supplier recruitment efforts and, thus far, have secured an array of high-quality suppliers in Southeast Asia, allowing us to flexibly choose sourcing locations based on business needs. As we continue to expand our SKU portfolio, strengthen supply chain capabilities, enhance user experience and foster user mind share. We believe we are well positioned to accelerate our US business growth in the second half of the year. (spoken in Chinese) (interpreted) Moving on to AI technology development and applications. We possess a specialized database of industrial supplies covering 17 million SKUs and over 1 billion industrial product parameters, leveraging our deep industry expertise and our self-developed large language model for industrial supplies. Our goal is to build an end-to-end matrix of AI tools tailored to the industrial supplies vertical with integrated capabilities for delivering tangible outcomes. Over the past two years, we have successfully developed and deployed more than 10 AI-powered applications to improve our internal operational efficiency and enhance customer service capabilities. To illustrate advancements in our operational efficiency, take the order processing scenario as an example. Previously, customer service teams manually entered each order into our system. To optimize this, we have developed the AI Smart Workbench, which seamlessly combines natural language processing with our ERP platform. This innovation enables order creation via simple conversational commands, greatly boosting both efficiency and accuracy. With the implementation of this AI smart workbench, our customer service team has achieved a 60.4% quarter-over-quarter increase in the average number of orders processed per team member in the first quarter. (spoken in Chinese) (interpreted) On the customer service capabilities front, one notable example is the material standardization and management scenario. Using AI technologies, our AI material management agent can rapidly structure and standardize complex and diverse material descriptions from customers and suppliers. It then generates standardized catalog parameters, enabling one-to-one item coding. What previously required several days of work by multiple team members can now be completed in just a few hours, drastically reducing material sorting and management costs while also improving accuracy. Another example of our enhanced customer service capabilities is the product selection and recommendation scenario. Our AI product recommendation agent deeply analyzes MRO use cases to glean precise insights into customer procurement needs and enables automated management of customer-specific product pools. This has significantly improved the efficiency and accuracy of product selection and recommendation. Since its launch in September 2024, our AI product recommendation agent has analyzed procurement needs and managed product pools for over 200 customers, driving over RMB34 million in revenue growth. This year, we plan to scale up our AI product recommendation agent to cover 14,000 customers, targeting even greater business growth. (spoken in Chinese) (interpreted) Looking ahead, despite external challenges and uncertainties, we believe ZKH has entered a new phase of long-term sustainable growth, underpinned by two years of organizational strengthening and core competency solidification. We are now well-positioned to drive forward with a dual focus on both domestic and international markets, powered by AI and product innovation and anchored in our industry-leading expertise in the MRO sector. Now I will turn the call over to our CFO, Max Lai, to present our financial results. Thank you, everyone. Chun Lai Thank you, Eric, and thanks, everyone, for making time to join our earnings call today. I'm pleased to share our financial performance for the last quarter, which reflects a solid start to the year, characterized by resilient revenue growth, improving profitability, and significant enhancement in our operating cash flow. In the past quarter, our total GMV reached RMB2.17 billion. While this marks a modest decline, it is largely due to a high comparison base from last year, which included SOE and central SOE customers' low-margin business with extended credit terms that we have since optimized. When excluding these factors, our underlying GMV maintained robust double-digit year-over-year growth. Notably, we are seeing strong growth in sectors such as new energy vehicles, electronics, telecommunications, and pharmaceuticals. Total net revenues rose 4% year-over-year to RMB1.9 billion, primarily driven by a high single-digit year-over-year increase in product sales revenue. As anticipated, marketplace revenue declined due to the prior year's high comparison base, as mentioned above. This solid top-line performance underscores the enduring strength of our product offering, enhanced supply chain capabilities, and growing customer engagement. Looking ahead, we expect the impact of last year's phase to continue to diminish in the next quarters, positioning us for sustained topline growth. Simultaneously, we are committed to improving operational efficiency, driving elevated business quality and profitability through targeted strategic initiatives, including organizational refinement and AI-driven product innovation. Regarding margins, our gross profit margin slightly decreased to 17.2% from 18% in the prior year period, primarily due to lower revenue contributions from our marketplace model. However, on a GMV basis, our gross profit margin continues to trend upward. Gross profit margin from our product sales model improved with increases of 58 basis points to 16.6% on ZKH platform and 67.5 basis points to 6.2% on GBB platform. And marketplace take rate increased by 235.9 basis points year-over-year to 14%. These gains reflect the effectiveness of strategic business optimization, improved procurement efficiency, and a greater contribution from high-margin private label products. Turning to cost efficiency. Our operating expenses decreased by 10.9% year-over-year to RMB412.9 million, reflecting a reduction across all major expense categories. Notably, this improvement was achieved despite incurring approximately RMB10 million in US-related expenses, which were absent in the last year. This demonstrates our continued commitment to cost discipline and operational efficiency for our domestic operations, driven by streamlined organizational structure and enhanced workforce productivity. As a percentage of total revenue, operating expenses decreased to 21.3%, down from 24.9% year-over-year. Excluding share-based compensation, this ratio improved to 20.5% from 22.4% in the prior year period. Breaking it down further, fulfillment expenses were RMB93.3 million, a 4.2% year-over-year decrease, primarily due to reduced employee benefits and warehouse rental costs. Sales and marketing expenses declined by 16.6% to RMB136.8 million, primarily attributable to lower employee benefits and travel-related spending. R&D expenses remained stable at RMB39.6 million, down slightly by 0.6% year-over-year as savings in employee benefits were offset by increased spending on technology and information services. General and administrative expenses were RMB143.2 million, down 11.8% year-over-year, mainly reflecting lower share-based compensation, partially offset by higher employee benefits. It is worth noting that our G&A expenses also include employee benefits for product line personnel as well as other product line-related costs, which support the development and enhancement of our product competitiveness. As a result, our profitability metrics showed significant improvement. Loss from operation narrowed to RMB80.8 million from RMB129.6 million, with margin improving to 4.2% from 7%. This reflects a substantial enhancement in our operating level profitability. We also delivered meaningful improvement in operating cash flow, with outflow reduced to RMB97.1 million compared to RMB224.3 million in the prior year period. This reduction is a testament to our narrowed losses and effective working capital management, bolstered by improved capital utilization and operational execution. In summary, the above-mentioned results validate the strength of our strategy and effectiveness of our execution. We are progressing towards our 2025 goals with discipline and strategic focus, supported by enhancements in business quality and steady margin improvement. We believe that as we expand our product portfolio, deepen supply chain integration, and implement AI technologies across our operations, we are well-positioned to enhance our market penetration and accelerate global expansion, delivering long-term value for our customers, merchants, partners, and shareholders. Thank you for your attention. I look forward to your questions. Operator (Operator instructions) Leo Chiang, Deutsche Bank. Leo Chiang (spoken in Chinese) I will translate myself. So I have two questions. My first question is that could management share what are the impacts from tariffs on your domestic and the US business, respectively, and the measures taken by the company? My second question is that, is there a timeline for entering new markets beyond the US, such as Europe? Thank you. Eric Long Chen (spoken in Chinese) (interpreted) Thank you very much for that question. I think the US tariffs, when it comes to our overseas business, is not really a negative piece of news. In some sense, it's actually a tailwind for us to expand our US business. We believe all of the changes in the market and in the prices offer new opportunities for us. Specifically, there's two things. Firstly, the US does not produce MROs themselves. They primarily need to import from geographies like China and Southeast Asia. And in order to tackle potential changes, we had already prepared a lot of suppliers or built up this reserve of suppliers way back when from ex-China markets, especially Southeast Asia. And now, because of that preparation, we are able to source accordingly based on business needs. So that's very important for us. And this also goes to show that in the MRO business as an intermediary or as a channel or marketplace, when there's uncertainties in the market, we can actually act to become more proactive and take more initiative and have more flexibility. (spoken in Chinese) (interpreted) So the US is our first step in our overseas -- in our foray into overseas markets, and we currently have 500 SKUs available there. More will be coming soon. And with these SKUs being available, we can use this as a base to sell into other geographies like Europe and Canada. Starting the second half of this year, we will start our business in Europe, and we are already in the preparatory phase for that. And when it comes to the European market, there's two aspects. One is online, the other is offline. So, for online, we will be able to cover the entire Europe by selling via e-commerce. And with offline, we will be focusing on two countries, Germany and Hungary. So basically, some Chinese companies already have a presence in those countries, and we will first serve those Chinese customers of ours there in those countries. And Germany already has a very advanced MRO business. And in terms of other geographies, Southeast Asia, we started our business in Southeast Asia. Our company in Thailand has finished registration and started operations. And as we said before in other earnings calls, Southeast Asia, in the short term, we will be serving Chinese companies that have set up a footprint there first. (spoken in Chinese) (interpreted) So that was actually my answer to your question. Thank you. Operator Mr. Chiang, is there a follow-up to your question? Leo Chiang No, that was the answer to the question, said Mr. Chen. Operator Xiaodan Zhang, CICC. Xiaodan Zhang (spoken in Chinese) So thanks for taking my questions. And could you please share some updates on this year's product strategy, including the key product categories to be developed as well as your private label brands? Thank you. Eric Long Chen (spoken in Chinese) (interpreted) We currently have 32 product lines spanning across five categories, and they are spare parts, chemicals, processing, manufacturing, general consumables, and administrative materials. 2025, we'll be focusing on existing lines while adding more categories and SKUs. As an MRO company, we will be focusing on industrial-grade MRO products, including spare parts, chemicals, processing, and manufacturing pieces. And we will also particularly strengthen the development of our private labels this year. When it comes to private labels for us, it's not just about product selection. In a lot of cases, we will be proactively engaged in the R&D and design side of things to enhance our absolute competitiveness in China. And also, at the same time, these private labels will serve as a strong support for our overseas business development. And also, this year, particularly, we'll be focusing on chemicals and the processing and manufacturing. Chemicals are traditionally our forte, and we will further enhance its development. Operator Xiaodan, is there a follow-up to your question? Have answered the question? Xiaodan Zhang No further questions. Thank you. Operator Ella Ji, China Renaissance. Ella Ji (spoken in Chinese) So my question is if management can share with us some updates regarding the company's business and the financial outlook for the upcoming quarters. Thank you. Eric Long Chen (spoken in Chinese) (interpreted) So For Q1, we achieved our planned targets. We actually slightly outperformed our targets. And like was mentioned earlier, our adjustment and optimization when it comes to the business with SOEs and central SOEs is pretty much finished. So, we foresee for the next three quarters, things will start to gradually accelerate. And for Q2 through Q4, especially for Q3 and Q4, we hope to achieve double-digit growth for GMV. Profitability-wise, we believe Q2 will see single-quarter breakeven. Q3 and Q4 will see positive profitability. And for the entire year '25, GMV will be positive year-over-year. And the domestic business will see positive profitability. And as for the entire group, so domestic plus overseas business, things will break even for the entire year 2025. That was my answer. Thank you. Operator And that concludes the question-and-answer session. I would like to turn the conference back over to management for any additional or closing comments. Jin Li Thank you once again for joining us today. You can find the webcast of today's call on If you have any further questions, please feel free to contact us. Our contact information can be found in today's press release. Thank you and have a great day. Operator The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. Portions of this transcript that are marked (interpreted) were spoken by an interpreter present on the live call. The interpreter was provided by the company sponsoring this event.
Yahoo
18-03-2025
- Business
- Yahoo
ZKH Group Limited Announces Fourth Quarter and Fiscal Year 2024 Unaudited Financial Results
SHANGHAI, March 18, 2025 /PRNewswire/ -- ZKH Group Limited ("ZKH" or the "Company") (NYSE: ZKH), a leading maintenance, repair and operations ("MRO") procurement service platform in China, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2024. Fourth Quarter and Fiscal Year 2024 Operational and Financial Highlights in thousand RMB, except for number of customers,percentage and basis points ("bps") Fourth Quarter Fiscal Year 2023 2024 Change 2023 2024 Change GMV[1] 3,207,139 2,690,311 -16.1 % 11,083,035 10,479,461 -5.4 % GMV by Platform ZKH Platform 2,907,077 2,435,037 -16.2 % 10,112,872 9,475,550 -6.3 % GBB Platform 300,062 255,274 -14.9 % 970,163 1,003,911 3.5 % GMV by Business Model Product Sales (1P) 2,321,861 2,324,005 0.1 % 8,336,846 8,530,328 2.3 % Marketplace (3P)[2] 885,279 366,306 -58.6 % 2,746,189 1,949,133 -29.0 % Number of Customers[3] 42,220 46,192 9.4 % 66,562 83,958 26.1 % ZKH Platform 31,174 36,116 15.9 % 48,211 57,679 19.6 % GBB Platform 11,046 10,076 -8.8 % 18,351 26,279 43.2 % Net Revenues 2,443,961 2,370,223 -3.0 % 8,721,175 8,761,318 0.5 % Gross Profit 417,151 404,998 -2.9 % 1,452,434 1,510,471 4.0 % % of Net Revenues 17.1 % 17.1 % 1.8bps 16.7 % 17.2 % 58.6bps Operating Loss (6,779) (32,589) 380.7 % (398,724) (338,770) -15.0 % % of Net Revenues -0.3 % -1.4 % -109.8bps -4.6 % -3.9 % 70.5bps Non-GAAP EBITDA[4] 43,272 (13,330) -130.8 % (211,896) (193,258) -8.8 % % of Net Revenues 1.8 % -0.6 % -233.3bps -2.4 % -2.2 % 22.4bps Net Profit/(Loss) 20,229 (29,102) -243.9 % (304,900) (268,043) -12.1 % % of Net Revenues 0.8 % -1.2 % -205.6bps -3.5 % -3.1 % 43.7bps Non-GAAP Adjusted Net Profit/(Loss)[5] 27,538 (15,033) -154.6 % (287,507) (159,527) -44.5 % % of Net Revenues 1.1 % -0.6 % -176.1bps -3.3 % -1.8 % 147.6bps "2024 presented a dynamic demand landscape, yet we delivered robust performance, further solidifying our leadership in China's MRO industry and expanding our global footprint." stated Mr. Eric Long Chen, Chairman and Chief Executive Officer of ZKH. "During the past year, we continued to enhance our profitability, bolstered by a growing customer base, increased customer loyalty, and advancements in digitalization and artificial intelligence. Notably, in 2024, we reached a significant milestone by broadening our international presence, particularly as our U.S. operations gained momentum. Looking ahead, we remain steadfast in our commitment to enhancing our products and supply chain capabilities and advancing our digitalization and artificial intelligence initiatives. While our strategic business optimization initiatives temporarily affected overall GMV growth, we believe the impact of these adjustments has gradually faded, placing us on a stronger path toward solid and sustainable growth, and we are confident that we will achieve full-year profitability for our domestic operations in 2025." Mr. Max Chun Chiu Lai, Chief Financial Officer of ZKH, added, "Despite challenges in the demand environment and the impacts of business optimization, we concluded the year with resilient results, alongside overall enhancements in profitability. This is reflected in the improvement in both gross margin and net margin in 2024, driven by our expanded business scale and continued efforts to optimize our supply chain, sales force, and organizational structure. Our cash position has also strengthened, as we generated net cash of RMB170.7 million from operating activities in the fourth quarter and RMB229.1 million in 2024, marking our third consecutive quarter and our first full year of positive net cash inflow from operating activities. With this solid foundation, we are poised to leverage future growth opportunities and enhance shareholder returns." [1] GMV is the total transaction value of orders placed on the Company's platform and shipped to customers, excluding taxes, net of the returned amount. [2] The proportion of GMV generated by the marketplace model was 27.6% and 24.8% for the fourth quarter of 2023 and for the fiscal year of 2023, and 13.6% for the fourth quarter of 2024 and 18.6% for the fiscal year of 2024, respectively. [3] Customers are customers that transacted with the Company during the reporting period, mainly comprised of enterprise customers in various industries. [4] Non-GAAP EBITDA is defined as net profit/(loss) before interest expenses, income tax expenses/(benefits) and depreciation and amortization expenses. [5] Non-GAAP adjusted net profit/(loss) is defined as net profit/(loss) excluding share-based compensation expenses. Fourth Quarter 2024 Financial Results Net Revenues. Net revenues were RMB2,370.2 million (US$324.7 million), representing a decrease of 3.0% from RMB2,444.0 million in the same period of 2023, mainly due to the optimization of certain businesses with low margins and long customer credit terms under the marketplace model. in thousand RMB, except for percentage Fourth Quarter 2023 2024 Change Net Revenues 2,443,961 2,370,223 -3.0 % Net Product Revenues 2,324,986 2,303,451 -0.9 % From ZKH Platform 2,028,986 2,049,520 1.0 % From GBB Platform 296,000 253,931 -14.2 % Net Service Revenues 98,592 51,226 -48.0 % Other Revenues 20,383 15,546 -23.7 % Net Product Revenues. Net product revenues were RMB2,303.5 million (US$315.6 million), representing a decrease of 0.9% from RMB2,325.0 million in the same period of 2023, primarily due to lower revenues generated on the GBB platform. Net Service Revenues. Net service revenues were RMB51.2 million (US$7.0 million), a decrease of 48.0% from RMB98.6 million in the same period of 2023, primarily due to the optimization of certain businesses with low margins and long customer credit terms under the marketplace model. Other Revenues. Other revenues were RMB15.5 million (US$2.1 million), a decrease of 23.7% from RMB20.4 million in the same period of 2023, mainly due to lower revenues from warehousing and logistic services and operating lease services for certain types of machinery and equipment. Cost of Revenues. Cost of revenues was RMB1,965.2 million (US$269.2 million), representing a decrease of 3.0% from RMB2,026.8 million in the same period of 2023, mainly due to the effectiveness of the Company's measures to reduce overall product procurement costs. Gross Profit and Gross Margin. Gross profit was RMB405.0 million (US$55.5 million), representing a decrease of 2.9% from RMB417.2 million in the same period of 2023. Gross margin was 17.1%, remaining flat compared with the same period of 2023, mainly due to lower revenue contribution from the marketplace model, while both the gross margin of the product sales model and the take rate of the marketplace model from the ZKH Platform increased, driven by business optimization, reduced procurement costs, and higher proportion of GMV from higher-margin private label products. in thousand RMB, except for percentage and basis points ("bps") Fourth Quarter 2023 2024 Change Gross Profit 417,151 404,998 -2.9 % % of Net Revenues 17.1 % 17.1 % 1.8bps Under Product Sales (1P) ZKH Platform 291,915 335,894 15.1 % % of Net Product Revenues from ZKH Platform 14.4 % 16.4 % 200.2bps GBB Platform 18,688 13,958 -25.3 % % of Net Product Revenues from GBB Platform 6.3 % 5.5 % -81.7bps Under Marketplace (3P) 98,592 51,226 -48.0 % % of Net Service Revenues 100.0 % 100.0 % - % of GMV from the Marketplace Model (Take Rate) 11.1 % 14.0 % 284.8bps Others 7,956 3,920 -50.7 % % of Other Revenues 39.0 % 25.2 % -1,381.7bps Operating Expenses. Operating expenses were RMB437.6 million (US$59.9 million), an increase of 3.2% from RMB423.9 million in the same period of 2023. Operating expenses as a percentage of net revenues were 18.5%, compared with 17.3% in the same period of 2023. Excluding the share-based compensation expenses, operating expenses as a percentage of net revenues were 17.9%, compared with 17.1% in the same period of 2023. Fulfillment Expenses. Fulfillment expenses were RMB95.1 million (US$13.0 million), a decrease of 11.8% from RMB107.8 million in the same period of 2023. The decrease was primarily attributable to lower employee benefit costs, warehouse rental costs, and distribution expenses. Fulfillment expenses as a percentage of net revenues were 4.0%, compared with 4.4% in the same period of 2023. Sales and Marketing Expenses. Sales and marketing expenses were RMB151.6 million (US$20.8 million), a decrease of 10.9% from RMB170.0 million in the same period of 2023. The decrease was primarily attributable to lower marketing and promotion expenses and travel expenses. Sales and marketing expenses as a percentage of net revenues were 6.4%, compared with 7.0% in the same period of 2023. Research and Development Expenses. Research and development expenses were RMB41.4 million (US$5.7 million), an increase of 9.5% from RMB37.8 million in the same period of 2023. The increase was primarily attributable to higher employee benefit costs and expenses related to technology and information services, such as cloud services. Research and development expenses as a percentage of net revenues were 1.7%, compared with 1.5% in the same period of 2023. General and Administrative Expenses. General and administrative expenses were RMB149.5 million (US$20.5 million), an increase of 38.1% from RMB108.2million in the same period of 2023. The increase was primarily attributable to higher employee benefit costs and share-based compensation expenses. General and administrative expenses as a percentage of net revenues were 6.3%, compared with 4.4% in the same period of 2023. Loss from Operations. Loss from operations was RMB32.6 million (US$4.5 million), compared with RMB6.8 million in the same period of 2023. Operating loss margin was 1.4%, compared with 0.3% in the same period of 2023. Non-GAAP EBITDA. Non-GAAP EBITDA was negative RMB13.3 million (US$1.8 million), compared with RMB43.3 million in the same period of 2023. Non-GAAP EBITDA margin was negative 0.6%, compared with 1.8% in the same period of 2023. Net (Loss)/Profit. Net loss was RMB29.1 million (US4.0 million), compared with net profit of RMB20.2 million in the same period of 2023. Net loss margin was 1.2%, compared with net profit margin of 0.8% in the same period of 2023. Non-GAAP Adjusted Net (Loss)/Profit. Non-GAAP adjusted net loss was RMB15.0 million (US$2.1 million), compared with non-GAAP adjusted net profit of RMB27.5 million in the same period of 2023. Non-GAAP adjusted net loss margin was 0.6%, compared with non-GAAP adjusted net profit margin of 1.1% in the same period of 2023. Basic and Diluted Net (Loss)/Profit per ADS[6] and Non-GAAP Adjusted Basic and Diluted Net (Loss)/Profit per ADS[7]. Basic and diluted net loss per ADS were RMB0.18 (US$0.02), compared with basic and diluted net profit per ADS of RMB0.98 in the same period of 2023. Non-GAAP adjusted basic and diluted net loss per ADS were RMB0.09(US$0.01), compared with non-GAAP adjusted basic and diluted net profit per ADS of RMB0.45 in the same period of 2023. [6] ADSs are American depositary shares, each of which represents thirty-five (35) Class A ordinary shares of the Company. [7] Non-GAAP adjusted basic and diluted net (loss)/profit per ADS is a non-GAAP financial measure, which is calculated by dividing non-GAAP adjusted net (loss)/profit attributable to the Company's ordinary shareholders by the weighted average number of ADSs. Fiscal Year 2024 Financial Results Net Revenues. Net revenues were RMB8,761.3 million (US$1,200.3 million), representing an increase of 0.5% from RMB8,721.2 million in 2023, primarily driven by higher revenues from the product sales model, partially offset by a decline in revenues from the marketplace model due to the optimization of certain businesses with low margins and long customer credit terms. in thousand RMB, except for percentage Fiscal Year 2023 2024 Change Net Revenues 8,721,175 8,761,318 0.5 % Net Product Revenues 8,341,603 8,449,468 1.3 % From ZKH Platform 7,381,501 7,450,211 0.9 % From GBB Platform 960,102 999,257 4.1 % Net Service Revenues 307,412 244,707 -20.4 % Other Revenues 72,160 67,143 -7.0 % Net Product Revenues. Net product revenues were RMB8,449.5 million (US$1,157.6 million), representing an increase of 1.3% from RMB8,341.6 million in 2023. The increase was mainly attributable to higher revenues generated from the ZKH platform and the GBB platform, primarily driven by increased customer numbers. Net Service Revenues. Net service revenues were RMB244.7 million (US$33.5 million), a decrease of 20.4% from RMB307.4 million in 2023, primarily due to the optimization of certain businesses with low margins and long customer credit terms under the marketplace model. Other Revenues. Other revenues were RMB67.1 million (US$9.2 million), a decrease of 7.0% from RMB72.2 million in 2023, mainly attributable to lower revenues generated from the Company's warehousing and logistic services and operating lease services for certain types of machinery and equipment. Cost of Revenues. Cost of revenues was RMB7,250.8 million (US$993.4 million), representing a decrease of 0.2% from RMB7,268.7 million in 2023, mainly due to the effectiveness of the Company's measures to reduce overall product procurement costs. Gross Profit and Gross Margin. Gross profit was RMB1,510.5 million (US$206.9 million), an increase of 4.0% from RMB1,452.4 million in 2023. Gross margin was 17.2%, compared with 16.7% in 2023, primarily due to improved gross margin of the product sales model from the ZKH Platform, resulting from business optimization, reduced procurement costs, and higher proportion of GMV from higher-margin private label products. in thousand RMB, except for percentage and basis points ("bps") Fiscal Year 2023 2024 Change Gross Profit 1,452,434 1,510,471 4.0 % % of Net Revenues 16.7 % 17.2 % 58.6bps Under Product Sales (1P) ZKH Platform 1,046,209 1,192,189 14.0 % % of Net Product Revenues from ZKH Platform 14.2 % 16.0 % 182.9bps GBB Platform 61,789 55,243 -10.6 % % of Net Product Revenues from GBB Platform 6.4 % 5.5 % -90.7bps Under Marketplace (3P) 307,412 244,707 -20.4 % % of Net Service Revenues 100.0 % 100.0 % - % of GMV from the Marketplace Model (Take Rate) 11.2 % 12.6 % 136.1bps Others 37,024 18,332 -50.5 % % of Other Revenues 51.3 % 27.3 % -2,400.5bps Operating Expenses. Total operating expenses were RMB1,849.2 million (US$253.3 million), a decrease of 0.1% from RMB1,851.2 million in 2023. Operating expenses as a percentage of net revenues were 21.1%, compared with 21.2% in 2023. Excluding the share-based compensation expenses, operating expenses as of a percentage of net revenues were 19.9%, compared with 21.0% in 2023. Fulfillment Expenses. Fulfillment expenses were RMB391.7 million (US$53.7 million), a decrease of 10.8% from RMB439.0 million in 2023. The decrease was primarily attributable to lower employee benefit costs, warehouse rental costs, and distribution expenses. Fulfillment expenses as a percentage of net revenues were 4.5%, compared with 5.0% in 2023. Sales and Marketing Expenses. Sales and marketing expenses were RMB641.5 million (US$87.9 million), a decrease of 8.5% from RMB700.8 million in 2023. The decrease was primarily attributable to lower employee benefit costs, marketing and promotion expenses and travel expenses. Sales and marketing expenses as a percentage of net revenues were 7.3%, compared with 8.0% in 2023. Research and Development Expenses. Research and development expenses were RMB169.5 million (US$23.2 million), a decrease of 3.6% from RMB175.9 million in 2023. The decrease was primarily attributable to lower employee benefit costs and traveling expenses, partially offset by higher expenses related to technology and information services, such as cloud services. Research and development expenses as a percentage of net revenues were 1.9%, compared with 2.0% in 2023. General and Administrative Expenses. General and administrative expenses were RMB646.5 million (US$88.6 million), an increase of 20.7% from RMB535.5 million in 2023. The increase was primarily attributable to higher share-based compensation expenses and allowance for credit losses, partially offset by lower employee benefit costs and travel expenses. General and administrative expenses as a percentage of net revenues were 7.4%, compared with 6.1% in the same period of 2023. Loss from Operations. Loss from operations was RMB338.8 million (US$46.4 million), compared with RMB398.7 million in 2023. Operating loss margin was 3.9%, compared with 4.6% in 2023. Non-GAAP EBITDA. Non-GAAP EBITDA was negative RMB193.3 million (US$26.5 million), compared with negative RMB211.9 million in 2023. Non-GAAP EBITDA margin was negative 2.2%, compared with negative 2.4% in 2023. Net Loss. Net loss was RMB268.0 million (US$36.7 million), compared with RMB304.9 million in 2023. Net loss margin was 3.1%, compared with 3.5% in 2023. Non-GAAP Adjusted Net Loss. Non-GAAP adjusted net loss was RMB159.5 million (US$21.9 million), compared with RMB287.5 million in 2023. Non-GAAP adjusted net loss margin was 1.8%, compared with 3.3% in 2023. Basic and Diluted Net Loss per ADS and Non-GAAP Adjusted Basic and Diluted Net Loss per ADS. Basic and diluted net loss per ADS were RMB1.64 (US$0.22), compared with RMB22.08 in 2023. Non-GAAP adjusted basic and diluted net loss per ADS were RMB0.97 (US$0.13), compared with RMB6.58 in 2023. Balance Sheet and Cash Flow As of December 31, 2024, the Company had cash and cash equivalents, restricted cash and short-term investments of RMB2.06 billion (US$282.3 million), compared with RMB2.12 billion as of December 31, 2023. Net cash generated from operating activities was RMB170.7 million (US$23.4 million) in the fourth quarter of 2024, compared with net cash used in operating activities of RMB59.3 million in the same period of 2023. Net cash generated from operating activities was RMB229.1 million (US$31.4 million) in 2024, compared with net cash used in operating activities of RMB567.9 million in 2023. Exchange Rate This announcement contains translations of certain Renminbi ("RMB") amounts into U.S. dollars ("US$") at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to US$ were made at a rate of RMB7.2993 to US$1.00, the exchange rate in effect as of December 31, 2024, as set forth in the H.10 statistical release of The Board of Governors of the Federal Reserve System. The Company makes no representation that any RMB or US$ amounts could have been, or could be, converted into US$ or RMB, as the case may be, at any particular rate, or at all. Conference Call Information The Company's management will hold a conference call on Tuesday, March 18, 2025, at 8:00 A.M. U.S. Eastern Time or 8:00 P.M. Beijing Time to discuss its financial results and operating performance for the fourth quarter and fiscal year 2024. United States (toll free): +1-888-317-6003 International: +1-412-317-6061 Mainland China (toll free): 400-120-6115 Hong Kong (toll free): 800-963-976 Hong Kong: +852-5808-1995 Access Code: 2393351 The replay will be accessible through March 25, 2025 by dialing the following numbers: United States: +1-877-344-7529 International: +1-412-317-0088 Replay Access Code: 5969362 A live and archived webcast of the conference call will also be available on the Company's investor relations website at About ZKH Group Limited ZKH Group Limited (NYSE: ZKH) is a leading MRO procurement service platform in China, dedicated to propelling the MRO industry's digital transformation to drive cost reduction and efficiency improvement industry-wide. Leveraging its outstanding product selection and recommendation capabilities, ZKH provides digitalized, one-stop MRO procurement solutions that enable its customers to transparently and efficiently access a wide selection of quality products at competitive prices. The Company also facilitates timely and reliable product delivery with professional fulfillment services. By catering specifically to the needs of MRO suppliers and customers through its unmatched digital infrastructure, the Company empowers all participants in the value chain to achieve more. For more information, please visit: Use of Non-GAAP Financial Measures This press release contains the following non-GAAP financial measures: non-GAAP adjusted net loss, non-GAAP adjusted net loss per ADS, basic and diluted, and non-GAAP EBITDA. The non-GAAP financial measures should not be considered in isolation from or construed as alternatives to their most directly comparable financial measures prepared in accordance with accounting principles generally accepted in the United States of America. Investors are encouraged to review the historical non-GAAP financial measures in reconciliation to their most directly comparable GAAP financial measures. The Company defines non-GAAP adjusted net loss for a specific period as net loss in the same period excluding share-based compensation expenses. The Company defines non-GAAP EBITDA as net loss before interest expenses, income tax expenses/(benefits) and depreciation and amortization expenses. Non-GAAP adjusted net loss per ADS is calculated by dividing adjusted net loss attributable to the Company's ordinary shareholders by the weighted average number of ordinary shares outstanding during the periods and then multiplied by 35. The Company presents these non-GAAP financial measures because they are used by the management to evaluate the Company's operating performance and formulate business plans. The Company believes that these non-GAAP financial measures help identify underlying trends in its business that could otherwise be distorted by the effect of certain expenses that are included in net loss and certain expenses that are not expected to result in future cash payments or that are non-recurring in nature. The Company also believes that the use of these non-GAAP financial measures facilitates investors' assessment of its operating performance, enhances the overall understanding of its past performance and future prospects and allows for greater visibility with respect to key metrics used by the management in financial and operational decision making. The non-GAAP financial measures have material limitations as analytical metrics and may not be calculated in the same manner by all companies. The Company's non-GAAP financial measures do not include all income and expense items that affect the Company's operations. They may not be comparable to other similarly titled measures used by other companies. In light of the foregoing limitations, you should not consider the non-GAAP financial measures as substitutes for, or superior to, their most directly comparable financial measures prepared in accordance with GAAP. The Company encourages investors and others to review its financial information in its entirety and not rely on a single financial measure. For more information on these non-GAAP financial measures, please see the table captioned "Reconciliations of Non-GAAP Results" set forth at the end of this press release. Safe Harbor Statement This press release contains forward-looking statements. These statements are made pursuant to the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "may," "will," "expects," "anticipates," "aim," "estimates," "intends," "plans," "believes," "is/are likely to," "potential," "continue," and similar statements. Among other things, the quotations from management in this press release and ZKH's strategic and operational plans contain forward-looking statements. ZKH may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the "SEC"), in its annual report to shareholders, in press release and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about ZKH's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: ZKH's mission, goals and strategies; ZKH's future business development, financial condition and results of operations; the expected changes in its revenues, expenses or expenditures; the expected growth of the MRO procurement service industry in China and globally; changes in customer or product mix; ZKH's expectations regarding the prospects of its business model and the demand for and market acceptance of its products and services; ZKH's expectations regarding its relationships with customers, suppliers, and service providers on its platform; competition in the Company's industry; government policies and regulations relating to ZKH's industry; general economic and business conditions in China and globally; the outcome of any current and future legal or administrative proceedings; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in ZKH's filings with the SEC. All information provided herein is as of the date of this announcement, and ZKH undertakes no obligation to update any forward-looking statement, except as required under applicable law. For investor and media inquiries, please contact: In China: ZKH Group LimitedIR DepartmentE-mail: IR@ Piacente Financial CommunicationsHui FanTel: +86-10-6508-0677E-mail: zkh@ In the United States: Piacente Financial CommunicationsBrandi PiacenteTel: +1-212-481-2050E-mail: zkh@ ZKH GROUP LIMITEDUNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (All amounts in thousands, except share, ADS, per share and per ADS data)As of December 31,As of December 31, 20232024 RMBRMBUS$ Assets Current assets: Cash and cash equivalents1,090,6211,423,943195,079 Restricted cash 159,75192,93912,733 Short-term investments874,210543,97874,525 Accounts receivable (net of allowance for credit losses of RMB107,032 and RMB145,789 as of December 31, 2023 and December 31, 2024, respectively)3,639,7943,090,323423,373 Notes receivable352,997234,21332,087 Inventories 668,984625,39085,678 Prepayments and other current assets168,117179,38724,576 Total current assets6,954,4746,190,173848,051Non-current assets: Property and equipment, net145,288183,57225,149 Land use right11,03310,8081,481 Operating lease right-of-use assets, net224,930179,94524,652 Intangible assets, net20,09615,9312,183 Goodwill30,80730,8074,221 Total non-current assets432,154421,06357,686 Total assets7,386,6286,611,236905,737Liabilities Current liabilities: Short-term borrowings585,000311,00042,607 Current portion of long-term borrowings -997137 Accounts and notes payable2,883,3702,553,396349,814 Operating lease liabilities91,23081,37911,149 Advance from customers19,90727,4333,758 Accrued expenses and other current liabilities448,225365,33350,050 Total current liabilities4,027,7323,339,538457,515Non-current liabilities: Long-term borrowings-38,8875,327 Non-current operating lease liabilities146,970109,09614,946 Other non-current liabilities50725,2243,456 Total non-current liabilities147,477173,20723,729 Total liabilities4,175,2093,512,745481,244ZKH Group Limited shareholders' equity: Ordinary shares (USD0.0000001 par value; 500,000,000,000 and 500,000,000,000 shares authorized; 5,621,490,964 and 5,658,952,794 shares issued and outstanding as of December 31, 2023 and December 31, 2024, respectively)441 Additional paid-in capital8,139,3498,305,3041,137,822 Statutory reserves6,0136,303864 Accumulated other comprehensive (loss)/income(25,154)4,764653 Accumulated deficit(4,908,793)(5,177,126)(709,263) Treasury stock-(40,758)(5,584) Total ZKH Group Limited shareholders' equity3,211,4193,098,491424,493 Total liabilities and shareholders' deficit7,386,6286,611,236905,737 ZKH GROUP LIMITEDUNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF LOSS (All amounts in thousands, except share, ADS, per share and per ADS data)For the three months endedFor the year endedDecember 31, 2023December 31, 2024December 31, 2023December 31,2024RMBRMBUS$RMBRMBUS$ Net revenuesNet product revenues 2,324,9862,303,451315,5718,341,6038,449,4681,157,572 Net service revenues 98,59251,2267,018307,412244,70733,525 Other revenues 20,38315,5462,13072,16067,1439,199 Total net revenues 2,443,9612,370,223324,7198,721,1758,761,3181,200,296 Cost of revenues (2,026,810)(1,965,225)(269,235)(7,268,741)(7,250,847)(993,362) Operating expensesFulfillment (107,823)(95,066)(13,024)(438,959)(391,687)(53,661) Sales and marketing (170,026)(151,556)(20,763)(700,791)(641,519)(87,888) Research and development (37,841)(41,444)(5,678)(175,915)(169,496)(23,221) General and administrative (108,240)(149,521)(20,484)(535,493)(646,539)(88,575) Loss from operations (6,779)(32,589)(4,465)(398,724)(338,770)(46,411) Interest and investment income 10,41814,4671,98253,70364,2468,802 Interest expense (6,556)(2,819)(386)(19,343)(19,003)(2,603) Others, net 23,086(7,893)(1,081)59,65926,4973,630 Profit/(loss) before income tax 20,169(28,834)(3,950)(304,705)(267,030)(36,582) Income tax benefits/(expenses) 60(268)(37)(195)(1,013)(139) Net profit/(loss) 20,229(29,102)(3,987)(304,900)(268,043)(36,721) Less: net loss attributable to non- controlling interests (44)--(393)-- Less: net loss attributable to redeemable non-controlling interests ---(193)-- Net profit/(loss) attributable to ZKH Group Limited 20,273(29,102)(3,987)(304,314)(268,043)(36,721) Accretion on preferred shares to redemption value (79,870)--(660,070)-- Net loss attributable to ZKH Group Limited's ordinary shareholders (59,597)(29,102)(3,987)(964,384)(268,043)(36,721) Net profit/(loss) 20,229(29,102)(3,987)(304,900)(268,043)(36,721) Other comprehensive income:Foreign currency translation adjustments 76,36951,5697,06526,75629,9184,099 Total comprehensive income/(loss) 96,59822,4673,078(278,144)(238,125)(32,622) Less: comprehensive loss attributable to non-controlling interests (44)--(393)-- Less: comprehensive loss attributable to redeemable non-controlling interests ---(193)-- Comprehensive income/(loss) attributable to ZKH Group Limited 96,64222,4673,078(277,558)(238,125)(32,622) Accretion on Preferred Shares to redemption value (79,870)--(660,070)-- Total comprehensive income/(loss) attributable to ZKH Group Limited's ordinary shareholders 16,77222,4673,078(937,628)(238,125)(32,622) Net loss per ordinary share attributable to ordinary shareholdersBasic and diluted (0.03)(0.01)(0.00)(0.63)(0.05)(0.01) Weighted average number of shares Basic and diluted 2,138,210,7895,713,526,2675,713,526,2671,528,540,7655,736,262,5535,736,262,553 Net loss per ADS attributable to ordinary shareholdersBasic and diluted (0.98)(0.18)(0.02)(22.08)(1.64)(0.22) Weighted average number of ADS (35 Class A ordinary shares equal to 1 ADS)Basic and diluted 61,091,737163,243,608163,243,60843,672,593163,893,216163,893,216 ZKH GROUP LIMITEDRECONCILIATIONS OF GAAP AND NON-GAAP RESULTS (All amounts in thousands, except share, ADS, per share and per ADS data) For the three months endedFor the year endedDecember 31, 2023December 31, 2024December 31,2023December 31,2024RMBRMBUS$RMBRMBUS$ Net profit/(loss) 20,229(29,102)(3,987)(304,900)(268,043)(36,721) Income tax (benefits)/expenses (60)268371951,013139 Interest expenses 6,5562,81938619,34319,0032,603 Depreciation and amortization expense 16,54712,6851,73873,46654,7697,503 Non-GAAP EBITDA 43,272(13,330)(1,826)(211,896)(193,258)(26,476)For the three months endedFor the year endedDecember 31, 2023December 31, 2024December 31,2023December 31, 2024RMBRMBUS$RMBRMBUS$ Net profit/(loss) 20,229(29,102)(3,987)(304,900)(268,043)(36,721) Add: Share-based compensation expenses 7,30914,0691,92717,393108,51614,867 Non-GAAP adjusted net profit/(loss) 27,538(15,033)(2,060)(287,507)(159,527)(21,854) Non-GAAP adjusted net profit/(loss) attributable to ordinary shareholders per shareBasic and diluted 0.01(0.00)(0.00)(0.19)(0.03)(0.00) Weighted average number of ordinary sharesBasic and diluted 2,138,210,7895,713,526,2675,713,526,2671,528,540,7655,736,262,5535,736,262,553 Non-GAAP adjusted net profit/(loss) attributable to ordinary shareholders per ADSBasic and diluted 0.45(0.09)(0.01)(6.58)(0.97)(0.13) Weighted average number of ADS (35 Class A ordinary shares equal to 1 ADS)Basic and diluted 61,091,737163,243,608163,243,60843,672,593163,893,216163,893,216 View original content: SOURCE ZKH Group Limited Sign in to access your portfolio
