德意志银行发布对震坤行(NYSE: ZKH)的2025年第四季度业绩前瞻报告，将目标价上调至4.50美元并维 持"买入"评级。德银预计，震坤行4Q25业绩进展顺利，收入同比增速有望恢复至中个位数，同时预计 单季度实现盈利，调整后净利率将继续改善。展望2026年，德银判断公司前期业务调整影响基本消化， 收入端有望在ARPU提升及客户数扩张带动下重回稳健增长轨道；利润端则受益于自有品牌占比提升、 规模效应及运营效率改善，全年有望实现盈利。在海外业务方面，德银表示，震坤行将专注于服务中国 企业出海需求，该策略有助于提升业务确定性，并预计海外业务将在2026年达到盈亏平衡。基于对公司 复苏路径信心增强，德银将目标价上调至4.5美元，维持"买入"评级。 德银预计，公司将于3月中旬发布4Q25及全年业绩。 ...

Core Insights - The report highlights a significant market correction in Hong Kong stocks, with the Hang Seng Index dropping by 1.17% and a net outflow of 4.9 billion HKD from southbound trading [2][3] - The defense and aerospace sector is experiencing a surge due to policy-driven investments, while the technology sector is facing a downturn [4][5] Company Analysis - Zhenkunhang (ZKH.US) is identified as a one-stop MRO service platform, primarily serving manufacturing enterprises to reduce procurement costs and enhance supply chain efficiency [6] - The company's GMV is projected to reach 10.5 billion CNY in 2024, with a CAGR of 20.5% from 2020 to 2024 [6][8] - In Q3 2025, Zhenkunhang reported a total revenue of 2.3 billion CNY, reflecting a 2% year-on-year increase, indicating a recovery in revenue [7] - The adjusted net loss for Zhenkunhang narrowed to 14 million CNY in Q3 2025, compared to losses of 66 million CNY in the same period last year [7] - The company aims to achieve profitability in Q4 2025, with a GMV growth target of 15-20% for 2026 [9] Industry Outlook - The industrial supply chain technology and services market in China is expected to grow to approximately 800 billion CNY by 2025, with a year-on-year increase of 6.6% [8] - The competitive landscape is fragmented, with Zhenkunhang holding a market share of 1.5% compared to JD Industrial's 4.1% [8] - The report anticipates a strong demand for improved procurement efficiency and cost reduction, driving online penetration in the industry [8]

Core Insights - The industrials sector has several oversold stocks that present potential buying opportunities for undervalued companies [1] Group 1: Oversold Stocks - Tecogen Inc (NYSE:TGEN) has an RSI of 26.4, with shares falling 20.4% to close at $4.41. The company reported mixed quarterly results and has a 52-week low of $1.55 [3][6] - ZKH Group Ltd (NYSE:ZKH) has an RSI of 29.2, with shares declining 13.6% to close at $3.18. The company posted a third-quarter loss of 1 cent per share, an improvement from a loss of 6 cents per share a year ago, and has a 52-week low of $2.50 [4][6] - Intercont (Cayman) Ltd (NASDAQ:NCT) has an RSI of 27.5, with shares dropping 6.3% to close at $0.22. The company has faced a significant decline of around 62% over the past month and has a 52-week low of $0.19 [5][6]

Investment Rating - The report suggests to pay attention to the company due to its potential for valuation recovery and the prospect of turning profitable in the fourth quarter of 2025 [1][4]. Core Insights - The company operates as a one-stop digital industrial supplies service platform, primarily serving manufacturing enterprises to reduce procurement and management costs while enhancing supply chain efficiency [2]. - The overall GMV for 2024 is projected to be 10.5 billion yuan, with a CAGR of 20.5% from 2020 to 2024 [2]. - In the first three quarters of 2025, the total revenue was 2.3 billion yuan, reflecting a 2% year-on-year increase, indicating a return to positive revenue growth [2]. - The company aims for a GMV growth rate of 15-20% in 2026, with an adjusted net profit target of 150 million yuan [4]. Company Overview - The company holds a market share of approximately 1.5% in the MRO procurement service market, with its GMV, total revenue, and gross profit being about 31%, 40%, and 36% of JD Industrial's, respectively [3][11]. - The company’s gross margin stands at 16.8%, slightly lower than JD Industrial's 18.6% [3][18]. - The adjusted net loss for the third quarter of 2025 was 14 million yuan, a significant reduction compared to previous quarters [2][9]. Financial Performance - The company reported a total revenue of 2.3 billion yuan in Q3 2025, with a gross profit of 390 million yuan, maintaining a stable gross margin [2][9]. - Operating expenses have decreased, with sales, R&D, and administrative expenses down by 13%, 19%, and 17% year-on-year, respectively [2][9]. - The adjusted EBITDA loss for Q3 2025 was 8 million yuan, showing improvement compared to previous periods [9]. Industry Outlook - The industrial supply chain technology and service market in China is expected to reach approximately 800 billion yuan in 2025, growing at a rate of 6.6% year-on-year [3]. - The industry is projected to grow at a CAGR of 8.3% from 2025 to 2029, driven by strong demand for procurement efficiency and cost reduction among industrial enterprises [3].

Core Viewpoint - The report indicates that despite a slight year-on-year decline in total merchandise transaction volume, the decrease is narrowing, and net losses have significantly reduced, showing continuous improvement in operational conditions. Management expects a return to year-on-year growth and profitability in the fourth quarter [1]. Group 1: Financial Performance - In Q3, the company's total GMV was 2.62 billion RMB, a year-on-year decrease of 2.3%, but the decline has notably narrowed compared to previous quarters [1]. - The total number of customers surpassed 70,000, reaching a historical high, and the average daily order value increased from 37 million RMB in July to 52 million RMB in November, showing significant growth [1]. - Non-GAAP operating loss and net loss for Q3 were 22 million RMB and 14 million RMB, respectively, with improvements in profit margins both quarter-on-quarter and year-on-year [1]. Group 2: Future Outlook - Management revealed that the company achieved breakeven in September and expects to achieve quarterly profitability in Q4 [1]. - The overseas business is projected to reach breakeven by 2026 [1]. Group 3: Supply Chain and AI Integration - The company added 2.3 million SKUs in the quarter, bringing the total to over 19 million, and onboarded over 1,200 new suppliers, primarily OEMs [2]. - The self-owned brand business grew robustly, with GMV increasing by 16.7% year-on-year, accounting for 8.2% of total GMV, with a long-term goal of contributing 30% [2]. - The company launched a large model "Expert Linglong" specifically developed for the MRO industry, and AI applications have shown effectiveness, with customer service handling order volume increasing by 42% year-on-year and procurement efficiency improving by 52% [2]. - AI product recommendations have generated over 100 million RMB in incremental sales revenue since their launch [2]. Group 4: Analyst Predictions - Analysts predict that the company's Q4 GMV and revenue will return to year-on-year growth of 4% and 5%, respectively, and will achieve an adjusted net profit of 8 million RMB [2].

Core Viewpoint - CITIC Securities initiates coverage on Zhenkunhang with an "Accumulate" rating and a target price of $4.3, highlighting its potential for growth as it expands its customer base and accelerates overseas business development [1]. Financial Performance - Zhenkunhang reported revenue of 2.328 billion yuan for Q3 2025, a year-on-year increase of 2.1%. The Non-GAAP adjusted net loss was 14 million yuan, with the loss narrowing by 78.7% year-on-year [1]. - The company's GMV (Gross Merchandise Volume) decline has slowed, with both large and small to medium-sized enterprise customer transaction volumes increasing [1]. Business Strategy - Zhenkunhang is focusing on high-margin proprietary brand products, with proprietary brand GMV increasing by 16.7% year-on-year, accounting for 8.2% of total GMV in Q3 2025 [1][3]. - The number of customers reached 70,800 by Q3 2025, representing a 48.0% year-on-year growth, while over 2.3 million new SKUs were added, bringing the total available SKUs to over 19 million [1][3]. AI Integration - The company is leveraging artificial intelligence across various operational aspects, with its core application "AI Product Recommendation Brain" set to launch in Q4 2024. By Q3 2025, it had recommended over 20 million items, generating over 100 million yuan in incremental revenue [1][3]. International Expansion - Zhenkunhang is expanding its distribution channels in the U.S., having established its own North American platform, Northsky, and entered third-party platforms like Amazon [1][3]. - CITIC Securities is optimistic about the company's proprietary brand and overseas strategy enhancing profit margins, with AI driving quality improvements in its core business [1].

Core Viewpoint - CITIC Securities initiates coverage on Zhenkunhang (ZKH.US) with a "Buy" rating and a target price of $4.3, highlighting its position as a leading MRO e-commerce platform in China, which is expected to return to a growth trajectory due to customer expansion and accelerated overseas business layout [1][2]. Group 1: Financial Performance - Zhenkunhang reported Q3 2025 revenue of 2.328 billion yuan, a year-on-year increase of 2.1%, with a Non-GAAP adjusted net loss of 14 million yuan, narrowing the loss by 78.7% year-on-year [1]. - After adjustments in the first half of the year, the company's business entered a recovery phase in Q3, with a reduced year-on-year decline in GMV and growth in total transaction volume from both large enterprises and SMEs [1]. Group 2: Strategic Initiatives - The company is committed to a private label strategy, with Q3 2025 private label GMV increasing by 16.7%, accounting for 8.2% of total GMV [1]. - The total number of customers reached 70,800 by Q3 2025, representing a 48.0% year-on-year increase, while over 2.3 million new SKUs were added, bringing the total available SKUs to over 19 million [1]. Group 3: AI and International Expansion - The company applies AI technology across various operational aspects, with the "AI Product Recommendation Brain" set to launch in Q4 2024, having already recommended over 20 million items and generating over 100 million yuan in incremental revenue by Q3 2025 [2]. - Zhenkunhang has expanded its distribution channels in the U.S., successfully entering third-party platforms like Amazon in addition to its own North American platform, Northsky [2].

Core Viewpoint - The Chinese manufacturing industry is entering a phase of efficiency reshaping driven by AI, with increasing willingness for digital transformation in procurement processes, highlighting the urgency for companies to adopt smart solutions [1] Group 1: Industry Overview - The Chinese MRO market is still in the early stages of online penetration, but there is a clear trend towards digitalization in manufacturing, driven by policy support and industry upgrades [2] - The MRO procurement service market in China is projected to exceed $500 billion by 2024, surpassing the combined size of the US and European markets, indicating significant growth potential [3] Group 2: Company Positioning - Zhenkunhang (震坤行) is a leading digital MRO procurement platform in China, leveraging iterative digital technologies and a comprehensive product matrix to provide one-stop procurement and management services [1][2] - The company aims to expand its private label system, targeting a long-term goal of achieving a 30% sales contribution from private brands, which is expected to enhance overall profit margins [2][3] Group 3: Financial Performance - Since 2022, Zhenkunhang has maintained double-digit growth in GMV, with improvements in operational efficiency and a declining overall expense ratio, indicating a path towards profitability [3] - The company’s adjusted losses have been narrowing annually, with management projecting a transition to a high-quality growth phase with profitability expected next year [3] Group 4: Competitive Advantages - Zhenkunhang has established significant advantages in product strength, delivery network, and digital capabilities, positioning itself as a leader in the MRO industry [4][5] - The company has developed a comprehensive industrial product matrix with over 20 million SKUs and a robust delivery network, addressing the "last mile" delivery challenges effectively [4] Group 5: Technological Innovations - The company has built an extensive industrial product data dictionary and launched several AI-driven products, including the "Xingjia Linglong" AI model, which has received regulatory approval and enhances its technical authority in the MRO sector [5][6] - Zhenkunhang's AI tools have significantly improved material management efficiency and procurement processes, contributing over $20 million in sales within a year [5][6] Group 6: Global Strategy - The company is pursuing a two-step global strategy, focusing on serving Chinese private enterprises going abroad and gradually obtaining international certifications for its self-owned products to enter mature markets [8] - Zhenkunhang's status as a US-listed company provides it with stable funding channels for its global expansion efforts, reinforcing its long-term growth logic [8]

Group 1 - Deutsche Bank maintains a "Buy" rating on Zhenkunhang (ZKH.US) with a 12-month target price of $4, citing ongoing digital transformation opportunities in China's MRO procurement service market as a driver for long-term growth potential [1] - Zhenkunhang's Q3 performance met expectations, with revenue increasing by 2% year-on-year to reach 2.328 billion yuan, and the company achieved monthly breakeven in September [1] - The bank expects an improvement in Q4 GMV growth and quarterly profitability, while keeping revenue forecasts for FY2025/2026 largely unchanged, but raising adjusted net profit margins by 20 basis points due to improved profit outlook [1] Group 2 - In the self-owned brand segment, the total GMV for self-owned brand products grew by 16.7% year-on-year, accounting for 8.2% of total GMV, with over 600 new self-owned brand SKUs launched in Q3 [2] - The company reaffirms its long-term goal of achieving a self-owned brand penetration rate of 30% [2] Group 3 - The company leverages artificial intelligence across various business scenarios, enhancing product recommendation accuracy and generating over 100 million yuan in new sales revenue since the launch of its recommendation engine in Q4 2024 [1] - The overseas strategy prioritizes supporting Chinese enterprises in international expansion, providing comprehensive services including procurement, delivery, product certification, and customs clearance in countries like Thailand, Malaysia, Indonesia, and Mexico, with management expecting overseas operations to break even by 2026 [1]

Core Insights - Zhenkunhang (NYSE: ZKH) reported a significant reduction in adjusted net loss for Q3 2025, narrowing to approximately 14 million RMB, a 78% decrease from about 66 million RMB in the same period last year, exceeding market expectations of 30 to 40 million RMB loss [1] - The company achieved a monthly breakeven point in September and is confident in achieving quarterly profitability in Q4 2025, marking a transition into a "profitability growth phase" [1][7] Business Performance - The average daily order volume increased from approximately 37 million RMB in July to about 52 million RMB in November, representing a growth of over 40% [2] - The number of customers surpassed 70,000, setting a new quarterly record, which lays a solid foundation for future growth [2] - Total expenses decreased by 14.4% year-on-year to approximately 420 million RMB, showcasing effective cost control and operational optimization [2] Product and AI Development - Zhenkunhang expanded its product matrix by adding over 2.3 million SKUs in Q3, bringing the total to over 19 million SKUs, with a goal to increase the share of its proprietary brand business from 8% to 30% [3] - The company launched its self-developed "Xingjialinglong" AI model, which automates 45 process scenarios, leading to a 42% increase in customer service efficiency and a 52% increase in procurement efficiency [4] - The AI-driven "AI Recommendation Brain" has generated over 100 million RMB in incremental sales since its launch, demonstrating the effectiveness of AI in enhancing sales performance [4] Future Outlook - Management plans to focus on strengthening its competitive edge in core industrial products, including spare parts and chemicals, to solidify its leadership position in the "hardcore" industrial goods sector [6] - Strategic partnerships with leading equipment manufacturers and core component suppliers are being established to enhance product offerings and customer service [7] - The company has successfully completed a phase of adjustment, indicating a stable recovery in overall operations and a transition to a new stage of high-quality growth [7]