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ZKH Group Limited Reports First Quarter 2025 Financial Results

On May 20, 2025, ZKH Group Limited, a prominent maintenance, repair, and operations (MRO) procurement service provider in China, released its unaudited financial results for the first quarter of 2025. This report provides insight into the company's recent performance and future outlook.

Performance Overview

In the first quarter, ZKH reported a Gross Merchandise Value (GMV) of RMB 2,171.997 million, down 7.5% compared to RMB 2,348.640 million in the same period last year. The decline is attributed to challenges within the business models utilized across its platforms. The ZKH platform experienced an 8.0% decrease in GMV, while the GBB platform saw a smaller drop of 2.5%.

Earnings highlights reveal that the company's net revenues increased by 4.0%, totaling RMB 1,935.372 million, up from RMB 1,860.409 million in the previous year. This growth is largely driven by a 7.1% rise in product sales, contrasting a significant 52.7% decrease in marketplace revenue, which reflects past high earnings due to low-margin sales now being optimized.

Additionally, ZKH saw its customer base grow by 30.3%, reaching 60,102 customers this quarter from 46,135 last year, indicating strong potential for future engagement and sales.

Financial Highlights and Challenges

The first quarter’s gross profit was reported at RMB 332.118 million, slightly down by 0.6% year-on-year, resulting in a gross margin of 17.2%. Furthermore, the company reported an operating loss narrowing to RMB 80.813 million compared to the loss of RMB 129.613 million in Q1 2024, a promising trend.

Chairman and CEO Eric Long Chen highlighted the company’s significant strides in international expansion, particularly in the U.S., where revenue and customer metrics have shown monthly increases since the start of 2025. He emphasized ZKH's commitment to bolstering product offerings and supply chain capabilities, aided by strategic investments in digital technologies and data analytics.

However, the company's net loss this quarter was RMB 66.723 million, representing a decrease from a net loss of RMB 90.901 million in the previous year. This 26.6% improvement reflects operational efficiencies and strategic cost management.

Strategic Focus and Future Outlook

CFO Max Chun Chiu Lai noted that ZKH's business quality has been strengthened, as seen in the improving margins of their product sales and a narrowing loss margin, setting a more favorable trajectory for profitability. The company plans to enhance its international presence by delivering tailored MRO procurement solutions using AI-driven approaches across its platforms.

ZKH’s approach aims to tackle inefficiencies in traditional procurement processes, offering innovative supply chain services designed to meet the needs of a diverse customer base effectively. As part of their growth strategy, the company will continue to focus on developing high-quality revenue streams while optimizing existing operations.

In summary, while ZKH Group Limited still faces challenges concerning marketplace revenues, the strengthened customer base and operational improvements signify its roadmap to long-term sustainable growth and profitability. Stakeholders can look forward to the management's insights during the forthcoming conference call, set for May 20, 2025, to discuss these developments in greater depth.

For more details about ZKH’s business model and financial performance, please visit their investor relations website.