Financial Data and Key Metrics Changes - In Q3 2025, GMV decreased by 2.3% year-over-year to RMB 2.62 billion, while total revenues increased by 2.1% to RMB 2.33 billion, indicating recovery from previous business optimization initiatives [18] - The adjusted net loss narrowed significantly by approximately 78% year-over-year to RMB 14 million, with an adjusted net loss margin improving to 0.6% [5][21] - Operating loss decreased by 69.3% to RMB 32.3 million, with the margin improving to negative 1.4% from negative 4.6% [20] Business Line Data and Key Metrics Changes - The number of transacting customers exceeded 70,000, reaching a new quarterly high, and private label GMV grew by 16.7% year-over-year, accounting for 8.2% of total GMV [18] - The company added over 2.3 million sellable SKUs, bringing the total to more than 19 million, and onboarded over 1,200 new suppliers [6][7] Market Data and Key Metrics Changes - The gross margin for product sales increased, with the overall gross margin remaining healthy at 16.8% compared to 17% a year ago [18] - The gross margin for the product sales YP model increased by 11.2 basis points to 16.2%, while the marketplace model's take rate rose by 47.5 basis points to 13.1% year-over-year [19] Company Strategy and Development Direction - The company is focused on enhancing its supply chain capabilities in the MRO space, emphasizing specialization in spare parts, chemicals, and manufactured goods [26][27] - The strategic initiative to increase private label products' contribution to total GMV from around 8% to approximately 30% is underway [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving quarterly profitability in Q4 2025, driven by improved operating leverage and expense control [21] - The company anticipates GMV growth of 15%-20% year-over-year going forward, balancing profitability with long-term growth investments [34] Other Important Information - The company generated net cash of approximately RMB 100 million from operating activities, reflecting improved working capital management [5] - AI technologies are being integrated across various business processes, significantly enhancing operational efficiency and productivity [10][12] Q&A Session Summary Question: Views on the competitive landscape of the MRO market in China - Management believes the IPO of JD Industrial is beneficial for the industry, highlighting the potential for one-stop purchasing on e-commerce platforms and the large market size in China [25][26] Question: Reasons for not being profitable and balancing profitability with long-term investments - Management indicated that previous losses were due to investments in infrastructure and core competencies, but they are now entering a phase focused on profitability while maintaining investment in R&D and customer acquisition [31][34] Question: Future plans for overseas expansion - Management plans to serve Chinese companies going abroad while also developing business in the U.S. and Europe, expecting overseas operations to break even by 2026 [38]

Financial Performance - Revenue returned to approximately prior-year levels following nearly four quarters of business optimization[15] - Operating loss narrowed by 69.3% YoY to RMB32.3 million, with margin improving to -1.4% from -4.6%[15] - Adjusted net loss narrowed by 78.7% YoY to RMB14.1 million, with margin improving to -0.6% from -2.9%[15] - Gross margin for ZKH Platform (1P) increased to 16.2% (+11.2 bps YoY), and for GBB Platform to 7.7% (+223.8 bps YoY)[15] Customer and Product Growth - Customer base expanded to over 70,800, a 48% increase YoY in 3Q25[15] - Total sellable SKUs exceeded 19 million, with 2.3 million+ added in 3Q25[15] - Private-label product GMV increased by 16.7% YoY with 600+ new SKUs[15] Operational Efficiency and Innovation - Consolidated the Wuxi (无锡) and Shanghai (上海) central warehouses, expecting annualized savings in rent, inventory, and freight[15] - ProductRecom Agent (AI推品大脑) has recommended 20M+ material line items since launch, driving RMB 100m+ in incremental revenue[15] Revenue Breakdown (9 Months Ended September 30, 2025) - Net product revenues accounted for 97.5% of total revenue[20] - Net service revenues accounted for 1.9% of total revenue[20] - Other revenues accounted for 0.6% of total revenue[20]

Core Viewpoint - The company reported third-quarter performance that exceeded market expectations in terms of revenue and profit metrics [1] Financial Performance - Revenue reached 2.328 billion yuan, surpassing market expectations of 2.288 billion yuan [1] - EBITDA recorded at -8.5 million yuan, significantly better than the market forecast of -45.1 million yuan [1] - Adjusted net profit was -14.1 million yuan, also better than the market expectation of -31.9 million yuan [1] - Adjusted EPS was -0.09 yuan, outperforming the market prediction of -0.19 yuan [1]

Core Insights - ZKH Group Limited reported a resilient financial performance in Q3 2025, with net revenues increasing by 2.1% year-over-year to RMB2,328.4 million (US$327.1 million) [6][12] - The company experienced a significant increase in its customer base, growing by 48% to 70,800 customers, indicating deeper market penetration [2][8] - The company is focusing on enhancing its AI capabilities and expanding its international business, which is expected to drive future growth [8][21] Financial Performance - Gross merchandise volume (GMV) decreased by 2.3% year-over-year to RMB2,622.9 million, with the ZKH platform GMV declining by 2.8% [2][6] - Net loss narrowed significantly to RMB24.3 million (US$3.4 million) from RMB81.8 million in the same period of 2024, reflecting improved operational efficiency [12][14] - Non-GAAP adjusted net loss also improved to RMB14.1 million (US$2.0 million) from RMB66.2 million year-over-year [12][15] Operational Highlights - The company added over 2.3 million sellable SKUs, bringing the total to over 19 million, with a notable 16.7% year-over-year growth in higher-margin private-label product GMV [8][11] - Fulfillment expenses decreased by 9.8% year-over-year, contributing to improved operating margins [14][17] - The company consolidated its warehousing operations, which is expected to yield annualized savings in rent, inventory, and freight [8][14] Strategic Initiatives - ZKH is embedding AI across various operations, which has already generated over RMB100 million in incremental revenue through enhanced product recommendations [8][11] - The company is expanding its U.S. distribution channels, including partnerships with platforms like Amazon, to enhance its market presence [8][21] - The management is committed to advancing AI development and scaling overseas operations to compound long-term shareholder value [8][21]

Group 1: Core Insights - The 8th China International Import Expo officially opened in Shanghai, showcasing Zhenkunhang's innovative capabilities in empowering advanced manufacturing and revitalizing the global industrial supply chain [1] - Zhenkunhang launched its self-developed "Xingjialinglong" AI model and intelligent agent family, marking a breakthrough in the intelligentization of industrial procurement [3][5] Group 2: AI Model and Intelligent Agents - The "Xingjialinglong" AI model leverages extensive product data and industry expertise accumulated from serving over 100,000 clients, focusing on the complexities and core pain points in procurement scenarios [5] - The intelligent agent family includes various functions such as AI Material Butler for data processing, AI Assistant for 24/7 inquiries, and AI Product Brain for demand prediction and product recommendations, enhancing efficiency in the supply chain [5] Group 3: ESG Report and Sustainability Initiatives - Zhenkunhang released its 2024 ESG report, emphasizing "responsibility as the foundation for value co-creation," covering governance, product responsibility, green initiatives, employee care, responsible procurement, and charity [7] - The company set ambitious carbon reduction goals, aiming for a 50% reduction in operational carbon by 2025, carbon neutrality by 2030, and full carbon neutrality by 2050 [9] Group 4: Innovation and R&D - The company announced the full operation of its Innovation R&D Center in Suzhou, focusing on new materials and intelligent equipment, enhancing its role in the innovation of industrial products [15][16] Group 5: Industry Collaboration and Influence - Zhenkunhang actively participated in high-end forums and events during the expo, expanding its industry collaboration and influence, and was recognized for its digital supply chain model [20][22] - The company shared its practices in AI technology at various dialogues, promoting the evolution of industrial cross-border services towards intelligence and efficiency [24] Group 6: Future Outlook - Zhenkunhang's participation in the expo reflects its commitment to deepening its service to China's advanced manufacturing and enhancing the resilience of the industrial supply chain through digitalization [25]

Core Viewpoint - ZKH Group Limited, a leading MRO procurement service platform in China, is set to release its unaudited financial results for Q3 2025 on November 20, 2025, before U.S. market opening [1] Financial Results Announcement - The earnings conference call will take place on November 20, 2025, at 7:00 A.M. U.S. Eastern Time, to discuss the financial results [2] - Access to the call will be available through various toll-free numbers for the U.S., international, and China, with a replay option available until November 27, 2025 [2] Company Overview - ZKH Group Limited operates as a leading MRO procurement service platform in China, leveraging strong supply chain capabilities and an AI-driven approach to serve a global customer base [3] - The company offers customized MRO procurement solutions through its online platforms, focusing on product curation, competitive pricing, and reliable delivery services [3] - ZKH aims to reduce procurement costs and improve management efficiency, transforming the MRO procurement process for stakeholders across the value chain [3]

Core Insights - The strategic cooperation agreement between Zhenkunhang Industrial Supermarket (Shanghai) Co., Ltd. and Nippon Paint (China) Co., Ltd. marks the beginning of deep collaboration in industrial supplies procurement and coating solutions [1] - The partnership aims for deep synergy across products, services, and customer value, going beyond a simple supply relationship [1] Group 1: Strategic Cooperation - The full range of high-performance coatings and solutions from Nippon Paint will be integrated into the Zhenkunhang platform, benefiting thousands of manufacturing clients [1] - The collaboration will enhance delivery efficiency by leveraging Zhenkunhang's digital procurement tools and nationwide warehousing and logistics network [1] - A one-stop service model combining products, delivery, and technical guidance will be explored to quickly respond to customer needs [1] Group 2: Market Expansion - Both companies will explore new overseas market opportunities, leveraging Zhenkunhang's platform layout and Nippon Paint's global brand and product advantages [1] - The partnership aims to support Chinese manufacturing enterprises in their overseas operations by providing timely and reliable localized MRO and coating product supplies [1] - Future collaboration will focus on supply chain synergy, data-driven strategies, and overseas market expansion [1]

Group 1 - The stock price of ZKH increased by 5.72% on August 23, reaching $3.14 per share, with a total market capitalization of $509 million [1] - As of March 31, 2025, ZKH reported total revenue of 1.935 billion RMB, representing a year-on-year growth of 4.03%, and a net profit attributable to shareholders of -66.723 million RMB, showing a year-on-year increase of 26.6% [1] Group 2 - ZKH is scheduled to disclose its fiscal year 2025 interim report on August 22, prior to the market opening [2] - ZKH Group Limited is a Cayman Islands-registered holding company, primarily operated by its domestic entity ZKH Holdings Limited, and serves as a digital industrial supplies service platform [2]

Core Insights - Zhenkunhang (ZKH.US), a leading MRO procurement service platform in China, reported a robust financial performance for Q2 2025, achieving revenue of 2.42 billion RMB, with core business showing steady growth after excluding the impact of optimized related business bases [1] - The overall gross margin under GMV criteria increased from 13.9% in Q2 last year to 14.8% in Q2 this year, marking six consecutive quarters of year-on-year growth [1] - The net loss significantly narrowed from 66 million RMB in Q2 last year to 53 million RMB in Q2 this year, representing a year-on-year reduction of approximately 20%, and notably, the company achieved monthly breakeven again in June following March [1]

Financial Data and Key Metrics Changes - The company's GMV declined by 12.1% year over year, while total revenues decreased by 3.7% to RMB 2.17 billion, largely due to last year's high comparison base [21][22] - The gross margin on a GMV basis reached 14.8%, representing a 0.8 percentage point year over year increase, marking the sixth consecutive quarter of gross margin expansion [5][22] - Net loss narrowed to approximately RMB 53 million, a 20% year over year reduction, with the net loss margin improving to 2.5% from 2.9% [5][26] Business Line Data and Key Metrics Changes - GMV from industry key accounts rose by approximately 11% year over year, with the number of transacting customers increasing by around 22% [7] - GMV from regional SME customers grew by approximately 7% year over year, with the number of transacting customers growing by 13% [9] - GMV in sectors such as automotive, new energy, and electrical equipment manufacturing grew by more than 15% [8] Market Data and Key Metrics Changes - The U.S. revenue grew by 260% in the second quarter from the first quarter, indicating strong market entry performance [16] - The company has begun receiving orders from Chinese customers' overseas plants in 10 countries, including Thailand and Mexico, diversifying its supplier network [18] Company Strategy and Development Direction - The company is focused on enhancing its core competencies, including product capabilities, AI, and last-mile delivery, while expanding its overseas business [6][19] - A strategic emphasis on high-margin private label products aims to increase their share in total GMV to approximately 30% [12] - The company is adopting a localized operating strategy in the U.S. and European markets to capitalize on supply chain strengths [15] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in a potential turnaround in top-line growth in the second half of the year, as the impact of previous business adjustments diminishes [21][34] - The company anticipates that growth drivers will increasingly come from overseas markets, particularly Europe and America [33] Other Important Information - The average number of orders processed per customer service representative grew by 48% year over year, while warehouse fulfillment costs decreased by approximately 18% [6] - The company has repurchased approximately 2,650,000 ADS for about dollars under its share buyback program [26] Q&A Session Summary Question: Growth strategy in the Chinese MRO market - Management acknowledged recent business pressures due to optimization but highlighted new customer acquisitions compensating for losses from adjusted business [31][32] Question: Competitive advantages in the MRO sector - Management emphasized advantages in product capabilities, IT capabilities, and a nationwide supply chain, along with strong R&D capabilities [39][41][44] Question: Overseas business challenges and strategies - Management discussed two models for overseas expansion, emphasizing the challenges of building a brand in advanced economies while leveraging strong supply chains [48][49]