ZKH Group Limited

What they do

ZKH operates an integrated MRO procurement platform, serving customers through its GBB platform, which includes retailers and micro businesses, as well as other customer segments. The company offers a wide range of MRO products, such as fasteners, tools, personal protective equipment, and office supplies, and uses smart on-site vending solutions (EVM) to dispense commonly used consumables directly within customer facilities.

Revenue drivers

• GBB platform (retailer and micro business sales) — This segment serves trading companies, distributors, local hardware stores, and micro businesses that purchase for resale or own use; it is a primary source of GMV and revenue.
• MRO product sales — Income is generated from selling a broad catalog of MRO items, including consumables and industrial tools, directly to corporate customers.
• Smart vending solutions (EVM) — On-site vending machines placed at customer facilities provide recurring sales of frequently used consumables, increasing customer stickiness and order frequency.

Recent performance

Annual revenue rose to $8.99B in 2025 from $8.76B in 2024, but net loss improved from $268.0M to $139.7M. Diluted EPS narrowed from a loss of $0.05 in 2024 to a loss of $0.02 in 2025. Operating cash flow dropped sharply to $8.8M in 2025, after turning positive at $229.1M in 2024. The company has not paid dividends in the last two years.

Strategy

Management emphasizes scaling the GBB platform and expanding customer base, while improving operational efficiency to reduce losses. Investments in smart vending (EVM) aim to deepen customer relationships and generate recurring revenue. The company continues to enhance its digital procurement capabilities, including AI-driven tools, to streamline supply chain operations.

Risks

• Persistent net losses — ZKH has reported net losses every year from 2021 through 2025, and although losses are narrowing, there is no guarantee of reaching profitability.
• Negative cash flow variability — Operating cash flow turned positive in 2024 but fell to only $8.8M in 2025, indicating cash generation is unstable.
• China business environment — As a China-based company, ZKH is subject to PRC regulatory, economic, and geopolitical risks that could affect operations.
• Dependence on retail and micro customers — A significant portion of revenue comes from GBB customers including small resellers, which may be sensitive to economic downturns and credit risk.

Outlook

Management expects continued revenue growth while focusing on cost control and operational efficiency to move toward profitability. They plan to expand the GBB platform and enhance smart vending deployments to increase recurring sales. However, the company acknowledges ongoing challenges in achieving stable positive operating cash flow and maintaining growth in a competitive MRO market.