ZKH Group (NYSE:ZKH) Releases Earnings Results

ZKH Group (NYSE:ZKH) posted its earnings results on Friday. The company reported $0.04 earnings per share (EPS) for the quarter, FiscalAI reports. ZKH Group had a negative return on equity of 2.80% and a negative net margin of 0.90%.The company had revenue of $359.70 million for the quarter.

Here are the key takeaways from ZKH Group’s conference call:

• Q2 growth accelerated: GMV rose 18.9% year over year to RMB 2.9 billion and revenue increased 12.8% to RMB 2.4 billion, the fastest growth pace in recent quarters. SME GMV grew 30%, while steel and nonferrous metals, communications and electronics, and utilities also posted particularly strong growth.
• Profitability turned positive for the first time: Gross profit grew 20.3% and gross margin as a percentage of GMV improved to 14.9%, while operating expenses declined 0.8% and fell to 17.4% of revenue. Non-GAAP EBITDA reached RMB 42 million and adjusted net income reached RMB 39 million, reversing losses in the prior-year quarter.
• Management expects GMV growth to accelerate further in the third quarter and is targeting full-year GMV growth of 15% to 20%, supported by continued SME momentum, higher-margin private-label products, and recovering state-owned enterprise demand.
• International GMV exceeded RMB 95 million in the first half, up more than tenfold year over year, and management expects the overseas business to become profitable in the second half. The company is expanding through support for Chinese manufacturers abroad, localized U.S. operations, and Amazon sales of Northsky private-label products.
• ZKH continues to invest in AI, including its Domino industrial data engine and AI Materials Manager, which has served more than 8,600 customers and generated commercial revenue. Management is progressing with plans for an independent AI subsidiary, while also intending to accelerate share repurchases under its existing $50 million authorization and potentially initiate dividends as profits scale.

ZKH Group Price Performance

NYSE ZKH opened at $2.90 on Friday. The company has a debt-to-equity ratio of 0.04, a quick ratio of 1.64 and a current ratio of 1.84. ZKH Group has a 52-week low of $1.92 and a 52-week high of $3.90. The business has a 50 day simple moving average of $2.72 and a 200 day simple moving average of $2.99. The stock has a market cap of $376.10 million, a price-to-earnings ratio of -36.25 and a beta of 0.38.

Analyst Ratings Changes

A number of equities research analysts have recently issued reports on ZKH shares. Weiss Ratings lowered ZKH Group from a “sell (d-)” rating to a “sell (e+)” rating in a research report on Thursday, June 4th. Wall Street Zen lowered shares of ZKH Group from a “buy” rating to a “hold” rating in a research report on Sunday, June 28th. One investment analyst has rated the stock with a Sell rating, Based on data from MarketBeat.com, the company presently has a consensus rating of “Sell”.

Institutional Inflows and Outflows

A number of hedge funds have recently modified their holdings of ZKH. XTX Topco Ltd acquired a new stake in shares of ZKH Group in the second quarter valued at approximately $33,000. Jane Street Group LLC acquired a new position in ZKH Group during the first quarter worth approximately $66,000. Goldman Sachs Group Inc. acquired a new stake in ZKH Group during the 4th quarter valued at $106,000. Renaissance Technologies LLC boosted its holdings in shares of ZKH Group by 442.1% during the 4th quarter. Renaissance Technologies LLC now owns 91,500 shares of the company’s stock worth $337,000 after buying an additional 74,621 shares during the period. Finally, Invesco Ltd. bought a new stake in shares of ZKH Group during the fourth quarter worth approximately $291,000. 9.52% of the stock is currently owned by institutional investors.

About ZKH Group

ZKH 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.