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ZKH Group Limited Sponsored ADR (ZKH)
NYSE:ZKH
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ZKH Group Limited Sponsored ADR
(NYSE:ZKH)
Rating:51Neutral
Price Target:
$3.00
▼(-3.23%Downside)
ZKH Group Limited Sponsored ADR (ZKH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$501.91M
Dividend YieldN/A
Average Volume (3M)32.28K
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. Volume55,505
30 Day Avg. Volume32,279
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
$3.00Price 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
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.55
Neutral
Balance Sheet
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.60
Neutral
Cash Flow
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.50
Neutral
| 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
Positive
3.10
Price Trends
3.05
Positive
3.15
Negative
3.38
Negative
Market Momentum
0.02
Positive
53.57
Neutral
66.67
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZKH, the sentiment is Positive. The current price of 3.1 is below the 20-day moving average (MA) of 3.13, above the 50-day MA of 3.05, and below the 200-day MA of 3.38, indicating a neutral trend. The MACD of 0.02 indicates Positive momentum. The RSI at 53.57 is Neutral, neither overbought nor oversold. The STOCH value of 66.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
70 Neutral | $342.19M | 11.41 | 42.07% | 18.12% | -5.05% | -55.00% | |
68 Neutral | $808.97M | 50.69 | 3.45% | ― | 25.34% | ― | |
62 Neutral | $866.75M | ― | -69.51% | ― | -10.55% | 9.27% | |
61 Neutral | $930.49M | ― | -16.81% | ― | 0.23% | 26.92% | |
56 Neutral | $5.90B | 21.64 | -28.61% | 6.34% | 10.78% | -34.04% | |
51 Neutral | $501.91M | ― | -7.82% | ― | 1.64% | 73.87% | |
49 Neutral | $507.96M | ― | -44.36% | ― | -13.54% | -3.33% |
* General Sector Average
Performance Comparison
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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.