ZKH Group Limited Announces Fourth Quarter and Fiscal Year 2023 Unaudited Financial Results
SHANGHAI, March 19, 2024 /PRNewswire/ -- ZKH Group Limited ("ZKH" or the "Company") (NYSE: ZKH), a leading maintenance, repair and operations ("MRO") procurement service platform in China, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2023.
Fourth Quarter and Fiscal Year 2023 Operational and Financial Highlights
in thousand RMB, except for
Fourth Quarter
Fiscal Year
days, percentage and basis
points ("bps")
2022 2023 Change 2022 2023 Change
GMV[1] 2,669,138 3,207,139 20.2 % 9,372,961 11,083,035 18.2 %
GMV by Platform
ZKH Platform 2,457,580 2,907,077 18.3 % 8,563,478 10,112,872 18.1 %
GBB Platform 211,558 300,062 41.8 % 809,483 970,163 19.8 %
GMV by Business Model
Product Sales (1P) 2,173,506 2,321,861 6.8 % 7,928,804 8,336,846 5.1 %
Marketplace (3P) 495,632 885,279 78.6 % 1,444,159 2,746,189 90.2 %
Number of Customers 36,401 42,220 16.0 % 58,004 66,562 14.8 %
ZKH Platform 26,319 31,174 18.4 % 40,495 48,211 19.1 %
GBB Platform 10,082 11,046 9.6 % 17,509 18,351 4.8 %
Net Revenue[2] 2,259,750 2,443,961 8.2 % 8,315,236 8,721,175 4.9 %
Gross Profit 376,265 417,151 10.9 % 1,317,670 1,452,434 10.2 %
% of Net Revenue 16.7 % 17.1 % 41.8bps 15.8 % 16.7 % 80.8bps
Operating Loss (89,078) (6,779) -92.4 % (685,706) (398,724) -41.9 %
% of Net Revenue -3.9 % -0.3 % 366.5bps -8.2 % -4.6 % 367.4bps
Non-GAAP EBITDA[3] (56,741) 43,272 -176.3 % (561,337) (211,896) -62.3 %
% of Net Revenue -2.5 % 1.8 % 428.2bps -6.8 % -2.4 % 432.1bps
Net (Loss)/Profit (83,531) 20,229 -124.2 % (731,121) (304,900) -58.3 %
% of Net Revenue -3.7 % 0.8 % 452.4bps -8.8 % -3.5 % 529.6bps
Non-GAAP Adjusted Net (82,224) 27,538 -133.5 % (626,141) (287,507) -54.1 %
(Loss)/Profit[4]
% of Net Revenue -3.6 % 1.1 % 476.5bps -7.5 % -3.3 % 423.3bps
Mr. Eric Long Chen, Chairman and Chief Executive Officer of ZKH, stated, "Despite a challenging macro environment, we ended 2023 with solid growth, an improved gross margin, reduced losses, and, importantly, profitability in the fourth quarter, demonstrating the resilience and continued growth of the MRO industry and our strong execution to drive our business forward. We have invested and strengthened our advantages in (i) product capabilities through product category expansion and product line extension, (ii) client coverage and servicing capabilities by optimizing sales team's structure, and (iii) digitalization and artificial intelligence capabilities by integrating our industry know-how, data assets, and IT talents. As we look ahead to 2024, brimming with both challenges and opportunities, we will continue to invest, refine, and optimize our operations to propel long-term growth. In addition, we are aiming to officially launch our overseas business in the United States in the second half of 2024."
Mr. Max Chun Chiu Lai, Chief Financial Officer of ZKH, added, "We are delighted with our fourth quarter operational and financial performance, which enabled us to finish 2023 on a strong note, especially as we mark our first quarter as a public company. Powered by our growth from both the ZKH Platform and the GBB Platform, our full-year GMV increased by 18.2% year over year, compared with an increase of 9.2% in 2022. Concurrently, we demonstrated a clear path to profitability, with gross margin improving by 80.8 basis points in 2023 while operating loss margin and adjusted net loss margin narrowing by 366.5 and 476.5 basis points in the fourth quarter, respectively, marking the seventh consecutive quarter of year-over-year improvement. Notably, we achieved profitability in the fourth quarter of 2023, with an adjusted net profit of RMB27.5 million, resulting in a year-over-year decrease of RMB338.6 million in our full-year adjusted net loss."
[1]
GMV is the total transaction value of orders placed on the Company's platform and shipped to customers, excluding taxes, net of the returned amount.
[2]
Net revenue under the marketplace model is recognized on a net basis. Therefore, a higher proportion of GMV generated by the marketplace model tends to increase the difference in growth rate between GMV and net revenue. The proportion of GMV generated by the marketplace model was 18.6% and 15.4% for the fourth quarter of 2022 and for the fiscal year of 2022, and 27.6% for fourth quarter of 2023 and 24.8% for the fiscal year of 2023, respectively.
[3]
Non-GAAP EBITDA is defined as profit/(loss) before interest expenses, income tax expenses/(benefits) and depreciation and amortization expenses.
[4]
Non-GAAP adjusted net (loss)/profit is defined as net (loss)/profit excluding share-based compensation expenses and interest expenses due to the issuance of Series F Convertible Notes, which have been fully converted into Series F preferred shares without payment of interest.
Fourth Quarter 2023 Financial Results
Net Revenues. Net revenues were RMB2,444.0 million (US$344.2 million), representing an increase of 8.2% from RMB2,259.8 million in the same period of 2022, with increases in all categories of net revenues primarily due to continued growth in MRO market demand.
in thousand RMB, except for percentage
Fourth Quarter
2022 2023 Change
Net Revenue 2,259,750 2,443,961 8.2 %
Net Product Revenues 2,188,957 2,324,986 6.2 %
From ZKH Platform 1,978,830 2,028,986 2.5 %
From GBB Platform 210,127 296,000 40.9 %
Net Service Revenues 56,942 98,592 73.1 %
Other Revenues 13,851 20,383 47.2 %
-- Net Product Revenues. Net product revenues were RMB2,325.0 million
(US$327.5 million), representing an increase of 6.2% from RMB2,189.0
million in the same period of 2022. The increase was mainly attributable
to higher revenues generated from the ZKH platform and the GBB platform,
primarily driven by increased customer numbers.
-- Net Service Revenues. Net service revenues were RMB98.6 million (US$13.9
million), an increase of 73.1% from RMB56.9 million in the same period
of 2022, primarily due to the growth of the marketplace model on the ZKH
platform.
-- Other Revenues. Other revenues were RMB20.4 million (US$2.9 million), an
increase of 47.2% from RMB13.9 million in the same period of 2022,
mainly attributable to higher revenues generated from the Company's
warehousing and logistic services.
Cost of Revenues. Cost of revenues was RMB2,026.8 million (US$285.5 million), representing an increase of 7.6% from RMB1,883.5 million in the same period of 2022, in line with the growth of the Company's product sales model.
Gross Profit and Gross Margin. Gross profit was RMB417.2 million (US$58.8 million), an increase of 10.9% from RMB376.3 million in the same period of 2022. Gross margin was 17.1%, compared with 16.7% in the same period of 2022. The increase was driven by the significant growth of the marketplace model on the ZKH platform. The lower gross margin on product sales was due to the impact of inventory write-downs.
in thousand RMB, except for percentage and basis points ("bps")
Fourth Quarter
2022 2023 Change
Gross Profit 376,265 417,151 10.9 %
% of Net Revenue 16.7 % 17.1 % 41.8bps
Under Product Sales (1P)
ZKH Platform 297,317 291,915 -1.8 %
% of Net Product Revenues from ZKH Platform 15.0 % 14.4 % -63.8bps
GBB Platform 14,752 18,688 26.7 %
% of Net Product Revenues from GBB Platform 7.0 % 6.3 % -70.7bps
Under Marketplace (3P) 56,942 98,592 73.1 %
% of Net Service Revenues 100 % 100.0 %
Others 7,254 7,956 9.7 %
% of Other Revenues 52.4 % 39.0 % -1,333.9bps
Operating Expenses. Operating expenses were RMB423.9 million (US$59.7 million), a decrease of 8.9% from RMB465.3 million in the same period of 2022. Operating expenses as a percentage of net revenues were 17.3%, compared with 20.6% in the same period of 2022, demonstrating the Company's improved operating efficiency and leverage.
-- Fulfillment Expenses. Fulfillment expenses were RMB107.8 million
(US$15.2 million), an increase of 9.8% from RMB98.2 million in the same
period of 2022. The increase was primarily attributable to higher
employee benefit costs. Fulfillment expenses as a percentage of net
revenues were 4.4%, compared with 4.3% in the same period of 2022.
-- Sales and Marketing Expenses. Sales and marketing expenses were RMB170.0
million (US$23.9 million), an increase of 3.2% from RMB164.7 million in
the same period of 2022. The increase was primarily attributable to
increased travel as well as marketing and promotion expenses as business
travel and marketing and promotion activities resumed after COVID-19
restrictions were lifted. Sales and marketing expenses as a percentage
of net revenues were 7.0%, compared with 7.3% in the same period of
2022.
-- Research and Development Expenses. Research and development expenses
were RMB37.8 million (US$5.3 million), a decrease of 36.4% from RMB59.5
million in the same period of 2022. The decrease was primarily
attributable to lower employee benefit costs as a result of a reduced
average research and development headcount. Research and development
expenses as a percentage of net revenues were 1.5%, compared with 2.6%
in the same period of 2022.
-- General and Administrative Expenses. General and administrative expenses
were RMB108.2 million (US$15.2 million), a decrease of 24.2% from
RMB142.8 million in the same period of 2022. The decrease was primarily
attributable to lower employee benefit costs as a result of a reduced
average headcount. General and administrative expenses as a percentage
of net revenues were 4.4%, compared with 6.3% in the same period of
2022.
Loss from Operations. Loss from operations was RMB6.8 million (US$1.0 million), compared with RMB89.1 million in the same period of 2022. Operating loss margin was 0.3%, compared with 3.9% in the same period of 2022.
Non-GAAP EBITDA. Non-GAAP EBITDA was RMB43.3 million (US$6.1 million), compared with negative RMB56.7 million in the same period of 2022. Non-GAAP EBITDA margin was 1.8%, compared with negative 2.5% in the same period of 2022.
Net Profit/(Loss). Net profit was RMB20.2 million (US$2.8 million), compared with net loss of RMB83.5 million in the same period of 2022. Net profit margin was 0.8%, compared with net loss margin of 3.7% in the same period of 2022.
Non-GAAP Adjusted Net Profit/(Loss). Non-GAAP adjusted net profit was RMB27.5 million (US$3.9 million), compared with non-GAAP adjusted net loss of RMB82.2 million in the same period of 2022. Non-GAAP adjusted net profit margin was 1.1%, compared with non-GAAP adjusted net loss margin of 3.6% in the same period of 2022.
Basic and Diluted Net Profit/(Loss) per ADS([5]) and Non-GAAP Adjusted Basic and Diluted Net Profit/(Loss) per ADS([6]). Basic and diluted net profit per ADS were RMB0.98 (US$0.14), compared with basic and diluted net loss per ADS of RMB4.22 in the same period of 2022. Non-GAAP adjusted basic and diluted net profit per ADS were RMB0.45 (US$0.06), compared with non-GAAP adjusted basic and diluted net loss per ADS of RMB2.17 in the same period of 2022.
[5]
ADSs are American depositary shares, each of which represents thirty-five (35) Class A ordinary shares of the Company.
[6]
Non-GAAP adjusted basic and diluted net profit/(loss) per ADS is a non-GAAP financial measure, which is calculated by dividing non-GAAP net profit/(loss) attributable to the Company's ordinary shareholders by the weighted average number of ADSs.
Fiscal Year 2023 Financial Results
Net Revenues. Net revenues were RMB8,721.2 million (US$1,228.4 million), representing an increase of 4.9% from RMB8,315.2 million in 2022, with increases in all categories of net revenues primarily due to continued growth in MRO market demand.
in thousand RMB, except for percentage
Fiscal Year
2022 2023 Change
Net Revenue 8,315,236 8,721,175 4.9 %
Net Product Revenues 8,086,920 8,341,603 3.1 %
From ZKH Platform 7,277,260 7,381,501 1.4 %
From GBB Platform 809,660 960,102 18.6 %
Net Service Revenues 179,508 307,412 71.3 %
Other Revenues 48,808 72,160 47.8 %
-- Net Product Revenues. Net product revenues were RMB8,341.6 million
(US$1,174.9 million), representing an increase of 3.1% from RMB8,086.9
million in 2022. The increase was mainly attributable to higher revenues
generated from the ZKH platform and the GBB platform, primarily driven
by increased customer numbers.
-- Net Service Revenues. Net service revenues were RMB307.4 million
(US$43.3 million), an increase of 71.3% from RMB179.5 million in 2022,
primarily due to the significant growth of the marketplace model on the
ZKH platform.
-- Other Revenues. Other revenues were RMB72.2 million (US$10.2 million),
an increase of 47.8% from RMB48.8 million in 2022, mainly attributable
to higher revenues generated from the Company's warehousing and logistic
services.
Cost of Revenues. Cost of revenues was RMB7,268.7 million (US$1,023.8 million), representing an increase of 3.9% from RMB6,997.6 million in 2022, in line with the growth of the Company's product sales model.
Gross Profit and Gross Margin. Gross profit was RMB1,452.4 million (US$204.6 million), an increase of 10.2% from RMB1,317.7 million in 2022. Gross margin was 16.7%, compared with 15.8% in 2022. The increase was driven by the significant growth of the marketplace model on the ZKH platform. The lower gross margin on product sales was due to the impact of inventory write-down.
in thousand RMB, except for percentage and basis points ("bps")
Fiscal Year
2022 2023 Change
Gross Profit 1,317,669 1,452,434 10.2 %
% of Net Revenue 15.8 % 16.7 % 80.8bps
Under Product Sales (1P)
ZKH Platform 1,045,024 1,046,209 0.1 %
% of Net Product Revenues from ZKH Platform 14.4 % 14.2 % -18.7bps
GBB Platform 55,756 61,789 10.8 %
% of Net Product Revenues from GBB Platform 6.9 % 6.4 % -45.1bps
Under Marketplace (3P) 179,508 307,412 71.3 %
% of Net Service Revenues 100.0 % 100.0 %
Others 37,381 37,024 -1.0 %
% of Other Revenues 76.6 % 51.3 % -2,528.0bps
Operating Expenses. Total operating expenses were RMB1,851.2 million (US$260.7 million), a decrease of 7.6% from RMB2,003.4 million in 2022. Operating expenses as a percentage of net revenue were 21.2%, compared with 24.1% in 2022, showing improved operating efficiency and leverage.
-- Fulfillment Expenses. Fulfillment expenses were RMB439.0 million
(US$61.8 million), a decrease of 6.1% from RMB467.4 million in 2022. The
decrease was primarily attributable to (i) the decrease in distribution
expenses as the Company switched to more distribution service providers
that can offer competitive rates and increased direct cooperation with
local transportation fleets instead of relying on distribution service
providers as intermediaries, and (ii) the decrease in rental expenses.
Fulfillment expenses as a percentage of net revenues were 5.0%, compared
with 5.6% in 2022.
-- Sales and Marketing Expenses. Sales and marketing expenses were RMB700.8
million (US$98.7 million), an increase of 2.6% from RMB683.2 million in
2022. The increase was primarily attributable to increased travel as
well as marketing and promotion expenses as business travel and
marketing and promotion activities resumed after COVID-19 restrictions
were lifted, partially offset by lower employee benefit costs as a
result of a reduced average sales and marketing headcount. Sales and
marketing expenses as a percentage of net revenues were 8.0%, compared
with 8.2% in 2022.
-- Research and Development Expenses. Research and development expenses
were RMB175.9 million (US$24.8 million), a decrease of 26.9% from
RMB240.5 million in 2022. The decrease was primarily attributable to
lower employee benefit costs as a result of a reduced average research
and development headcount. Research and development expenses as a
percentage of net revenues were 2.0%, compared with 2.9% in 2022.
-- General and Administrative Expenses. General and administrative expenses
were RMB535.5 million (US$75.4 million), a decrease of 12.5% from
RMB612.3 million in 2022. The decrease was primarily attributable to
lower employee benefit costs as a result of a reduced average headcount,
partially offset by increased travel expenses. General and
administrative expenses as a percentage of net revenues were 6.1%,
compared with 7.4% in the same period of 2022.
Loss from Operations. Loss from operations was RMB398.7 million (US$56.2 million), compared with RMB685.7 million in 2022. Operating loss margin was 4.6%, compared with 8.2% in 2022.
Non-GAAP EBITDA. Non-GAAP EBITDA was negative RMB211.9 million (US$29.8 million), compared with negative RMB561.3 million in 2022. Non-GAAP EBITDA margin was negative 2.4%, compared with negative 6.8% in 2022.
Net Loss. Net loss was RMB304.9 million (US$42.9 million), compared with RMB731.1 million in 2022. Net loss margin was 3.5%, compared with 8.8% in 2022.
Non-GAAP Adjusted Net Loss. Non-GAAP adjusted net loss was RMB287.5 million (US$40.5 million), compared with RMB626.1 million in 2022. Non-GAAP adjusted net loss margin was 3.3%, compared with 7.5% in 2022.
Basic and Diluted Net Loss per ADS and Non-GAAP Adjusted Basic and Diluted Net Loss per ADS. Basic and diluted net loss per ADS were RMB22.08 (US$3.11), compared with RMB32.88 in 2022. Non-GAAP adjusted basic and diluted net loss per ADS were RMB6.58 (US$0.93), compared with RMB16.54 in 2022.
Balance Sheet and Cash Flow
As of December 31, 2023, the Company had cash and cash equivalents, restricted cash and short-term investments of RMB2.12 billion (US$299.2 million), compared with RMB2.01 billion as of December 31, 2022.
Net cash used in operating activities was RMB59.3 million (US$8.4 million) in the fourth quarter of 2023, compared with net cash generated from operating activities of RMB31.8 million in the same period of 2022. Net cash used in operating activities was RMB567.9 million (US$80.0 million) in 2023, compared with RMB504.2 million in 2022.
Exchange Rate
This announcement contains translations of certain Renminbi ("RMB") amounts into U.S. dollars ("US$") at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to US$ were made at a rate of RMB7.0999 to US$1.00, the exchange rate in effect as of December 29, 2023, as set forth in the H.10 statistical release of The Board of Governors of the Federal Reserve System. The Company makes no representation that any RMB or US$ amounts could have been, or could be, converted into US$ or RMB, as the case may be, at any particular rate, or at all.
Conference Call Information
The Company's management will hold a conference call on Tuesday, March 19, 2024, at 8:00 A.M. U.S. Eastern Time or 8:00 P.M. Beijing Time to discuss its financial results and operating performance for the fourth quarter and fiscal year 2023.
United States (toll free): +1-888-317-6003
International: +1-412-317-6061
Mainland China (toll free): 400-120-6115
Hong Kong (toll free): 800-963-976
Hong Kong: +852-5808-1995
Access Code: 3148822
The replay will be accessible through March 26, 2024, by dialing the following numbers:
United States: +1-877-344-7529
International: +1-412-317-0088
Replay Access Code: 4272788
A live and archived webcast of the conference call will also be available on the Company's investor relations website at https://ir.zkh.com.
About ZKH Group Limited
ZKH Group Limited (NYSE: ZKH) is a leading MRO procurement service platform in China, dedicated to propelling the MRO industry's digital transformation to drive cost reduction and efficiency improvement industry-wide. Leveraging its outstanding product selection and recommendation capabilities, ZKH provides digitalized, one-stop MRO procurement solutions that enable its customers to transparently and efficiently access a wide selection of quality products at competitive prices. The Company also facilitates timely and reliable product delivery with professional fulfillment services. By catering specifically to the needs of MRO suppliers and customers through its unmatched digital infrastructure, the Company empowers all participants in the value chain to achieve more.
For more information, please visit: https://ir.zkh.com.
Use of Non-GAAP Financial Measures
This press release contains the following non-GAAP financial measures: non-GAAP adjusted net profit/(loss), non-GAAP adjusted net profit/(loss) per ADS, basic and diluted, and non-GAAP EBITDA. The non-GAAP financial measures should not be considered in isolation from or construed as alternatives to their most directly comparable financial measures prepared in accordance with accounting principles generally accepted in the United States of America. Investors are encouraged to review the historical non-GAAP financial measures in reconciliation to their most directly comparable GAAP financial measures.
The Company defines non-GAAP adjusted net profit/(loss) for a specific period as net profit/(loss) in the same period excluding share-based compensation expenses and interest expense due to the issuance of Series F Convertible Notes, which have been fully converted into Series F preferred shares without payment of interests. The Company defines non-GAAP EBITDA as profit/(loss) before interest expenses, income tax expenses/(benefits) and depreciation and amortization expenses. Non-GAAP adjusted net profit/(loss) per ADS is calculated by dividing adjusted net profit/(loss) attributable to the Company's ordinary shareholders by the weighted average number of ordinary shares outstanding during the periods and then multiplied by 35.
The Company presents these non-GAAP financial measures because they are used by the management to evaluate the Company's operating performance and formulate business plans. The Company believes that these non-GAAP financial measures help identify underlying trends in its business that could otherwise be distorted by the effect of certain expenses that are included in net profit/(loss) and certain expenses that are not expected to result in future cash payments or that are non-recurring in nature. The Company also believes that the use of these non-GAAP financial measures facilitates investors' assessment of its operating performance, enhances the overall understanding of its past performance and future prospects and allows for greater visibility with respect to key metrics used by the management in financial and operational decision making.
The non-GAAP financial measures have material limitations as analytical metrics and may not be calculated in the same manner by all companies. The Company's non-GAAP financial measures do not include all income and expense items that affect the Company's operations. They may not be comparable to other similarly titled measures used by other companies. In light of the foregoing limitations, you should not consider the non-GAAP financial measures as substitutes for, or superior to, their most directly comparable financial measures prepared in accordance with GAAP. The Company encourages investors and others to review its financial information in its entirety and not rely on a single financial measure.
For more information on these non-GAAP financial measures, please see the table captioned "Reconciliations of Non-GAAP Results" set forth at the end of this press release.
Safe Harbor Statement
This press release contains forward-looking statements. These statements are made pursuant to the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "may," "will," "expects," "anticipates," "aim," "estimates," "intends," "plans," "believes," "is/are likely to," "potential," "continue," and similar statements. Among other things, the quotations from management in this press release, ZKH's strategic and operational plans and statements under the "Business Outlook" section, contain forward-looking statements. ZKH may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the "SEC"), in its annual report to shareholders, in press release and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about ZKH's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: ZKH's mission, goals and strategies; ZKH's future business development, financial condition and results of operations; the expected changes in its revenues, expenses or expenditures; the expected growth of the MRO procurement service industry in China and globally; changes in customer or product mix; ZKH's expectations regarding the prospects of its business model and the demand for and market acceptance of its products and services; ZKH's expectations regarding its relationships with customers, suppliers, and service providers on its platform; competition in the Company's industry; government policies and regulations relating to ZKH's industry; general economic and business conditions in China and globally; the outcome of any current and future legal or administrative proceedings; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in ZKH's filings with the SEC. All information provided herein is as of the date of this announcement, and ZKH undertakes no obligation to update any forward-looking statement, except as required under applicable law.
For investor and media inquiries, please contact:
In China:
ZKH Group Limited
IR Department
E-mail: IR@zkh.com
Piacente Financial Communications
Hui Fan
Tel: +86-10-6508-0677
E-mail: zkh@thepiacentegroup.com
In the United States:
Piacente Financial Communications
Brandi Piacente
Tel: +1-212-481-2050
E-mail: zkh@thepiacentegroup.com
ZKH GROUP LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(All amounts in thousands, except share, ADS, per share and per ADS data)
As of December 31,
2022 2023
RMB RMB US$
Assets
Current assets:
Cash and cash equivalents 1,954,246 1,090,621 153,641
Restricted cash 51,610 159,751 22,470
Short-term investments 874,210 123,130
Accounts receivable (net of allowance for credit 3,067,064 3,639,794 512,654
losses of RMB96,959 and RMB107,032 as of
December 31, 2022 and 2023, respectively)
Notes receivable 310,708 352,997 49,719
Inventories 655,997 668,984 94,224
Prepayments and other current assets 243,630 168,117 23,679
Total current assets 6,283,255 6,954,474 979,517
Non-current assets:
Property and equipment, net 166,740 145,288 20,463
Land use right 10,930 11,033 1,554
Operating lease right-of-use assets, net 297,937 224,930 31,681
Intangible assets, net 24,051 20,096 2,830
Goodwill 30,807 30,807 4,339
Total non-current assets 530,465 432,154 60,867
Total assets 6,813,720 7,386,628 1,040,384
Liabilities
Current liabilities:
Short-term borrowings 250,000 585,000 82,396
Accounts and notes payable 2,566,136 2,883,370 406,114
Operating lease liabilities 95,775 91,230 12,849
Advance from customers 31,131 19,907 2,804
Accrued expenses and other current liabilities 539,191 448,225 63,131
Total current liabilities 3,482,233 4,027,732 567,294
Non-current liabilities:
Non-current operating lease liabilities 214,427 146,970 20,700
Other non-current liabilities 782 507 71
Total non-current liabilities 215,209 147,477 20,771
Total liabilities 3,697,442 4,175,209 588,065
Mezzanine equity:
Series A convertible redeemable preferred shares 26,934
("Series A Preferred Shares") (US$0.0000001 par
value; 58,480,000 and nil shares authorized,
issued and outstanding as of December 31, 2022,
and 2023, respectively)
Series A+ convertible redeemable preferred 40,608
shares ("Series A+ Preferred Shares")
(US$0.0000001 par value; 84,480,000 and nil
shares authorized, issued and outstanding as of
December 31, 2022, and 2023, respectively)
Series B convertible redeemable preferred shares 389,960
("Series B Preferred Shares") (US$0.0000001 par
value; 734,209,000 and nil shares authorized,
issued and outstanding as of December 31, 2022,
and 2023, respectively)
Series B+ convertible redeemable preferred shares 240,033
("Series B+ Preferred Shares") (US$0.0000001
par value; 277,730,000 and nil shares authorized,
issued and outstanding as of December 31, 2022,
and 2023, respectively)
Series C1 convertible redeemable preferred shares 769,548
("Series C1 Preferred Shares") (US$0.0000001
par value; 604,820,600 and nil shares authorized,
issued and outstanding as of December 31, 2022
and 2023, respectively)
Series C2 convertible redeemable preferred shares 458,503
("Series C2 Preferred Shares") (US$0.0000001
par value; 372,859,000 and nil shares authorized,
issued and outstanding as of December 31, 2022,
and 2023, respectively)
Series D1 convertible redeemable preferred shares 1,219,370
("Series D1 Preferred Shares") (US$0.0000001
par value; 705,523,600 and nil shares authorized,
issued and outstanding as of December 31, 2022,
and 2023, respectively)
Series D2 convertible redeemable preferred shares 179,429
("Series D2 Preferred Shares") (US$0.0000001 par
value; 105,302,000 and nil shares authorized,
issued and outstanding as of December 31, 2022,
and 2023, respectively)
Series E convertible redeemable preferred shares 2,226,911
("Series E Preferred Shares") (US$0.0000001 par
value; 803,222,500 and nil shares authorized,
issued and outstanding as of December 31, 2022,
and 2023, respectively)
Series F convertible redeemable preferred shares 1,631,477
("Series F Preferred Shares") (US$0.0000001 par
value; 392,013,413 and nil shares authorized,
issued and outstanding as of December 31, 2022,
and 2023, respectively)
Total mezzanine equity 7,182,773
ZKH Group Limited shareholders'
(deficit)/equity:
Ordinary shares (USD0.0000001 par value; 1 4 1
496,253,373,300 and 496,253,373,300 shares
authorized; 1,218,621,800 and 5,621,490,964
shares issued and outstanding as of December 31,
2022 and 2023, respectively)
Additional paid-in capital 8,139,349 1,146,403
Statutory reserves 5,278 6,013 847
Accumulated other comprehensive loss (51,910) (25,154) (3,543)
Accumulated deficit (4,024,102) (4,908,793) (691,389)
Total ZKH Group Limited shareholders' (4,070,733) 3,211,419 452,319
(deficit)/equity
Non-controlling interests 4,238
Total shareholders' (deficit)/equity (4,066,495) 3,211,419 452,319
Total liabilities, mezzanine equity and 6,813,720 7,386,628 1,040,384
shareholders' deficit
ZKH GROUP LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME/(LOSS)
(All amounts in thousands, except share, ADS, per share and per ADS data)
For the three months ended December 31,
For the year ended December 31,
2022 2023 2022 2023
RMB RMB US$ RMB RMB US$
Net revenues
Net product revenues 2,188,957 2,324,986 327,467 8,086,920 8,341,603 1,174,890
Net service revenues 56,942 98,592 13,886 179,508 307,412 43,298
Other revenues 13,851 20,383 2,871 48,808 72,160 10,164
Total net revenues 2,259,750 2,443,961 344,224 8,315,236 8,721,175 1,228,352
Cost of revenues (1,883,485) (2,026,810) (285,470) (6,997,566) (7,268,741) (1,023,781)
Operating expenses
Fulfillment (98,231) (107,823) (15,187) (467,384) (438,959) (61,826)
Sales and marketing (164,749) (170,026) (23,948) (683,206) (700,791) (98,704)
Research and development (59,517) (37,841) (5,330) (240,534) (175,915) (24,777)
General and administrative (142,846) (108,240) (15,245) (612,252) (535,493) (75,423)
Loss from operations (89,078) (6,779) (956) (685,706) (398,724) (56,159)
Interest and investment income 7,935 10,418 1,467 14,559 53,703 7,564
Interest expense (7,590) (6,556) (923) (94,182) (19,343) (2,724)
Others, net 5,366 23,086 3,252 33,737 59,659 8,403
(Loss)/profit before income tax (83,367) 20,169 2,840 (731,592) (304,705) (42,916)
Income tax (expenses)/benefits (164) 60 8 471 (195) (27)
Net (loss)/profit (83,531) 20,229 2,848 (731,121) (304,900) (42,943)
Less: net income/(loss) attributable to non- 35 (44) (6) 333 (393) (55)
controlling interests
Less: net income/(loss) attributable to redeemable 3,101 4,227 (193) (27)
non-controlling interests
Net (loss)/profit attributable to ZKH Group (86,667) 20,273 2,854 (735,681) (304,314) (42,861)
Limited
Accretion on preferred shares to redemption value (73,281) (79,870) (11,249) (509,281) (660,070) (92,969)
Net loss attributable to ZKH Group Limited's (159,948) (59,597) (8,395) (1,244,962) (964,384) (135,830)
ordinary shareholders
Net (loss)/profit (83,531) 20,229 2,848 (731,121) (304,900) (42,944)
Other comprehensive loss:
Foreign currency translation adjustments (23,052) 76,369 10,756 (50,980) 26,756 3,769
Total comprehensive (loss)/profit (106,583) 96,598 13,604 (782,101) (278,144) (39,175)
Less: comprehensive income/(loss) attributable to 35 (44) (6) 333 (393) (55)
non-controlling interests
Less: comprehensive income/(loss) attributable to 3,101 4,227 (193) (27)
redeemable non-controlling interests
Total comprehensive (loss)/profit attributable to (109,719) 96,642 13,610 (786,661) (277,558) (39,093)
ZKH Group Limited
Accretion on Preferred Shares to redemption value (73,281) (79,870) (11,249) (509,281) (660,070) (92,969)
Total comprehensive (loss)/profit attributable to (183,000) 16,772 2,361 (1,295,942) (937,628) (132,062)
ZKH Group Limited's ordinary shareholders
Net loss per ordinary share attributable to
ordinary shareholders
Basic and diluted (0.12) (0.03) (0.00) (0.94) (0.63) (0.09)
Weighted average number of shares
Basic and diluted 1,325,036,140 2,138,210,789 2,138,210,789 1,325,036,140 1,528,540,765 1,528,540,765
Net loss per ADS attributable to ordinary
shareholders
Basic and diluted (4.22) (0.98) (0.14) (32.88) (22.08) (3.11)
Weighted average number of ADS (35 Class A
ordinary shares equal to 1 ADS)
Basic and diluted 37,858,175 61,091,737 61,091,737 37,858,175 43,672,593 43,672,593
ZKH GROUP LIMITED
RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS
(All amounts in thousands, except share, ADS, per share and per ADS data)
For the three months
ended
For the year ended
December 31,
December 31,
2022 2023 2022 2023
RMB RMB US$ RMB RMB US$
Net (loss)/profit (83,531) 20,229 2,849 (731,121) (304,900) (42,944)
Income tax 164 (60) (8) (471) 195 27
expenses/(benefits)
Interest expenses 7,590 6,556 923 94,182 19,343 2,724
Depreciation and 19,036 16,547 2,331 76,073 73,466 10,347
amortization expenses
Non-GAAP EBITDA (56,741) 43,272 6,095 (561,337) (211,896) (29,846)
For the three months ended
For the year ended
December 31,
December 31,
2022 2023 2022 2023
RMB RMB US$ RMB RMB US$
Net (loss)/profit (83,531) 20,229 2,849 (731,121) (304,900) (42,944)
Add:
Share-based compensation (1,109) 7,309 1,029 31,899 17,393 2,448
expenses
Interest expense due to the 2,416 73,081
issuance of Series F
Convertible Notes
Adjusted net (loss)/profit (82,224) 27,538 3,878 (626,141) (287,507) (40,496)
Non-GAAP net (loss)/profit
attributable to ordinary
shareholders per share
Basic and diluted (0.06) 0.01 0.00 (0.47) (0.19) (0.03)
Weighted average number of
ordinary shares
Basic and diluted 1,325,036,140 2,138,210,789 2,138,210,789 1,325,036,140 1,528,540,765 1,528,540,765
Non-GAAP net (loss)/profit
attributable to ordinary
shareholders per ADS
Basic and diluted (2.17) 0.45 0.06 (16.54) (6.58) (0.93)
Weighted average number of
ADS (35 Class A ordinary
shares equal to 1 ADS)
Basic and diluted 37,858,175 61,091,737 61,091,737 37,858,175 43,672,593 43,672,593
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SOURCE ZKH Group Limited
