SHANGHAI - ZKH Group Limited (NYSE: ZKH), a prominent Chinese MRO procurement service platform, reported a narrowed non-GAAP adjusted net loss for the first quarter of 2024, alongside a slight decrease in revenue.
The company's adjusted net loss improved significantly by 50% to RMB43.5 million (US$6.0 million) compared to the same period last year, reflecting enhanced operational efficiency and cost management. However, revenue saw a 4.0% decline year-over-year (YoY) to RMB1,860.4 million (US$257.7 million), attributed to a strategic focus on high-quality revenues and the impact of seasonal demand variations due to the Chinese New Year.
The company's gross profit margin increased by 89.5 basis points to 18.0%, driven by a higher gross margin of product sales (1P) and a higher take-rate of the marketplace model (3P) on the ZKH platform. Despite a 1.0% decrease in Gross Merchandise Value (GMV), ZKH's customer base grew by 29.0% YoY, surpassing 46,000, indicating robust purchasing activity on its platforms.
Eric Long Chen, Chairman and CEO of ZKH, remarked on the company's solid performance and profitability improvement, highlighting investments in smart and automated warehousing facilities and organizational streamlining efforts. Max Chun Chiu Lai, CFO of ZKH, pointed out the GMV decrease was mainly due to the company's focus on high-quality revenues and the late timing of the Chinese New Year.
The company's net loss per American depositary share (ADS) was reduced to RMB0.56 (US$0.08), compared to RMB4.08 in the first quarter of 2023. The non-GAAP adjusted net loss per ADS also saw a decrease to RMB0.27 (US$0.04), from RMB2.3 in the prior year.
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