ZKH Group Limited Sponsored ADR (ZKH) AI Stock Analysis

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ZKH Group Limited Sponsored ADR

(NYSE:ZKH)

Rating:54Neutral

Price Target:

$3.00

▼(-3.23%Downside)

ZKH's overall stock score is primarily hindered by profitability challenges and valuation concerns. Despite revenue growth and a stable equity position, the company's inability to generate profits and cash flow, coupled with a negative P/E ratio, pose significant risks. The technical analysis suggests a neutral market sentiment, further reflecting investor caution.

ZKH Group Limited Sponsored ADR (ZKH) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$501.91M

Dividend YieldN/A

Average Volume (3M)32.99K

Price to Earnings (P/E)―

Beta (1Y)0.17

Revenue Growth1.64%

EPS Growth73.87%

CountryUS

Employees3,476

SectorGeneral

Sector StrengthN/A

IndustrySpecialty Retail

Share Statistics

EPS (TTM)-0.06

Shares Outstanding130,030,820

10 Day Avg. Volume52,233

30 Day Avg. Volume32,989

Financial Highlights & Ratios

PEG Ratio-1.14

Price to Book (P/B)1.20

Price to Sales (P/S)0.00

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$3.00

Price Target Upside-3.23% Downside

Rating ConsensusHold

Number of Analyst Covering0

ZKH Group Limited Sponsored ADR Business Overview & Revenue Model

Company DescriptionZKH Group Limited develops and operates a maintenance, repair, and operating (MRO) products trading and service platform that offers spare parts, chemicals, manufacturing parts, general consumables, and office supplies in the People's Republic of China. The company provides MRO procurement and management services; digitalized MRO procurement solutions; and logistics and warehousing services. It also engages in the production and sale of intelligent warehousing equipment. ZKH Group Limited was founded in 1998 and is based in Shanghai, the People's Republic of China.

How the Company Makes MoneyZKH Group Limited generates revenue primarily through the sale of industrial products and services. The company leverages a multi-channel distribution strategy, which includes both online and offline platforms, to reach a broad customer base. Key revenue streams include direct sales to industrial clients, partnerships with suppliers and manufacturers, and value-added services such as supply chain management and logistics solutions. Significant partnerships with industry leaders and a strong focus on customer service and operational efficiency also contribute to the company's earnings.

ZKH Group Limited Sponsored ADR Earnings Call Summary

Earnings Call Date:May 20, 2025

(Q3-2024)

% Change Since: 0.65%|

Next Earnings Date:Aug 21, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted positive trends in improving gross margin, reducing net loss, and expanding internationally. However, challenges in GMV growth and increased administrative expenses must be addressed.

Q3-2024 Updates

Positive Updates

Improved Gross Margin

Gross margin rose from 16.3% to 17% year-over-year in Q3 2024, driven by the improved gross profit margin of product sales and a higher take rate of the marketplace model.

Significant Reduction in Adjusted Net Loss

Adjusted net loss margin improved from 4.4% to 2.9% year-over-year, showcasing progress towards profitability.

Growth in Private Label Products

GMV of private label products reached RMB 490 million, up 24% year-over-year, accounting for 6.3% of the total GMV.

Strategic International Expansion

ZKH plans to launch its U.S. standalone site on December 1, 2024, focusing initially on over 1,000 SKUs.

Increased Customer Engagement

Served over 75,000 customers from January to September 2024, a year-over-year increase of over 30%.

Negative Updates

Decrease in Overall GMV

Overall GMV decreased by 7.2% year-over-year to RMB 2.7 billion, with the optimizer business affecting results.

Decline in Net Service Revenues

Net service revenues decreased by 27.8% year-over-year due to a lower proportion of GMV generated by the marketplace model.

Challenges in Traditional Industries

Year-over-year decreases in procurement from traditional ICE cars, mining, coal, and construction sectors.

Increased General and Administrative Expenses

General and administrative expenses increased by 16.6% year-over-year, impacting profitability.

Company Guidance

During the third quarter of 2024, ZKH reported a GMV of RMB 2.69 billion and revenue of RMB 2.28 billion, with a gross margin increase from 16.3% to 17% and an adjusted net loss margin improvement from 4.4% to 2.9%. The company experienced a 7.2% year-over-year decrease in overall GMV due to business optimization, yet core customer industries showed steady growth. Net product revenues rose by 2% to RMB 2.21 billion, while net service revenues fell by 27.8% to RMB 57.7 million. Operating expenses as a percentage of net revenues slightly decreased to 21.6%, with fulfillment expenses dropping 11.8% to RMB 100.2 million. ZKH's cash position strengthened, generating RMB 160.5 million in net cash from operating activities. The company also continued its share repurchase program, reflecting confidence in its growth prospects.

ZKH Group Limited Sponsored ADR Financial Statement Overview

Summary

ZKH Group exhibits steady revenue growth yet faces substantial profitability challenges, with negative net income and cash flow issues. Operational inefficiencies and high expenses are evident in negative EBIT and EBITDA margins.

Income Statement

Neutral

ZKH Group's income statement shows a consistent increase in revenue over the years, with a revenue growth rate of 0.46% from 2023 to 2024. However, the company is struggling with profitability, as indicated by persistent negative net income and a negative net profit margin. The gross profit margin for 2024 is 17.24%, which is decent but overshadowed by negative EBIT and EBITDA margins, reflecting operational inefficiencies and high expenses relative to revenue.

Balance Sheet

Neutral

The balance sheet analysis reveals a relatively stable equity base with a positive stockholders' equity figure in 2024. The debt-to-equity ratio is 0.17, indicating moderate leverage, although the company has a high liability burden compared to its equity. The equity ratio is 46.87%, suggesting that nearly half of the company's assets are financed by shareholders. However, the company's return on equity remains negative due to its net losses.

Cash Flow

Neutral

ZKH's cash flow statement shows challenges in generating positive cash flow, with free cash flow remaining zero in 2024. The operating cash flow to net income ratio is not calculable due to zero operating cash flow. The historical data indicates a volatile cash flow situation, with the company previously experiencing negative free cash flow and reliance on financing activities to support operations.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	8.76B	8.72B	8.32B	7.65B	4.69B
Gross Profit	1.51B	1.45B	1.32B	1.04B	680.27M
EBITDA	-265.30M	-211.90M	-561.34M	-1.03B	-353.94M
Net Income	-268.04M	-304.31M	-1.24B	-1.45B	-586.19M
Balance Sheet
Total Assets	6.61B	7.39B	6.81B	5.94B	5.57B
Cash, Cash Equivalents and Short-Term Investments	1.97B	1.96B	1.95B	538.00M	2.03B
Total Debt	548.65M	831.35M	570.96M	1.15B	316.19M
Total Liabilities	3.51B	4.18B	10.88B	8.71B	2.32B
Stockholders Equity	3.10B	3.21B	-4.07B	-2.77B	3.24B
Cash Flow
Free Cash Flow	146.03M	-623.51M	-554.31M	-1.54B	-31.05M
Operating Cash Flow	229.07M	-567.95M	-504.20M	-1.38B	31.80M
Investing Cash Flow	277.48M	-908.30M	-37.04M	-94.39M	-57.91M
Financing Cash Flow	-255.28M	715.72M	1.30B	174.63M	1.83B

ZKH Group Limited Sponsored ADR Technical Analysis

Technical Analysis Sentiment

Negative

Last Price3.10

Price Trends

50DMA

3.06

Positive

100DMA

3.15

Negative

200DMA

3.38

Negative

Market Momentum

MACD

0.01

Positive

RSI

49.42

Neutral

STOCH

60.17

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZKH, the sentiment is Negative. The current price of 3.1 is below the 20-day moving average (MA) of 3.12, above the 50-day MA of 3.06, and below the 200-day MA of 3.38, indicating a neutral trend. The MACD of 0.01 indicates Positive momentum. The RSI at 49.42 is Neutral, neither overbought nor oversold. The STOCH value of 60.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ZKH.

ZKH Group Limited Sponsored ADR Risk Analysis

ZKH Group Limited Sponsored ADR disclosed 105 risk factors in its most recent earnings report. ZKH Group Limited Sponsored ADR reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

ZKH Group Limited Sponsored ADR Peers Comparison

Overall Rating

UnderperformOutperform

Sector (56)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BWMX	70 Neutral	$351.90M	11.73	42.07%	1.20%	-5.05%	-55.00%
RERE	68 Neutral	$778.20M	48.76	3.45%	―	25.34%	―
TDUP	62 Neutral	$966.08M	―	-69.51%	―	-10.55%	9.27%
YSG	59 Neutral	$865.94M	―	-16.81%	―	0.23%	26.92%
Sector *	56 Neutral	$5.80B	21.14	-28.61%	4.89%	10.78%	-34.04%
ZKH	54 Neutral	$501.91M	―	-7.82%	―	1.64%	73.87%
DADA	49 Neutral	$507.96M	―	-44.36%	―	-13.54%	-3.33%

* General Sector Average

Performance Comparison

ZKH

ZKH Group Limited Sponsored ADR

3.10

0.16

5.44%

BWMX

Betterware de Mexico

9.43

-4.27

-31.17%

DADA

Dada Nexus

1.96

0.61

45.19%

YSG

Yatsen Holding

9.39

5.85

165.25%

TDUP

thredUP

8.17

6.20

314.72%

RERE

ATRenew Inc. Sponsored ADR

3.54

1.10

45.08%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 23, 2025