ZKH Group Q1 2026 Earnings Call Transcript

Quartr
Provided by Quartr
May 21, 2026

Key Takeaways

  • Positive Sentiment: ZKH Group said GMV rose 12.9% year over year in Q1 2026 and revenue grew 9.2%, marking the second straight quarter of accelerated growth. Management also said Q2 GMV growth could accelerate further based on current order and shipment trends.
  • Positive Sentiment: The company reported a major profitability improvement, with adjusted net profit up 103% year over year to RMB 1.7 million and its first-ever profitable first quarter on an adjusted basis. Non-GAAP EBITDA also turned positive, while operating cash outflow narrowed significantly.
  • Positive Sentiment: Customer growth remained strong, with transacting customers up 11% to 66,000. SME GMV grew more than 20%, central SOE customer activity recovered to double-digit growth, and several key industries such as electrical manufacturing, communications electronics, and new energy each posted over 20% GMV growth.
  • Positive Sentiment: The company continues to expand its platform capabilities, increasing sellable SKUs to 27 million from 23 million at the end of the prior quarter. Private label GMV grew more than 20% and reached about 9.7% of total GMV, while fulfillment costs fell 17% year over year and warehouse efficiency improved 36%.
  • Neutral Sentiment: Management reiterated its focus on AI-driven operations, including a target to build a large industrial knowledge graph, lift AI product-identification rates, and expand AI agents across sales, operations, and customer service. The company also said overseas revenue grew more than sixfold and that it is targeting full-year overseas breakeven.
AI Generated. May Contain Errors.
Earnings Conference Call
ZKH Group Q1 2026
00:00 / 00:00

There are 8 speakers on the call.

Speaker 6

Ladies and gentlemen, good day, and welcome to ZKH Group Limited's first quarter 2026 earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Dacy Shi, Head of Investor Relations. Please go ahead, ma'am.

Speaker 1

Good morning, and welcome to ZKH's first quarter of 2026 earnings conference call. With me are Mr. Eric Chen, our Founder, Chairman, and CEO, and Mr. Max Lai, our CFO. Today's discussion may include forward-looking statements. Related factors are described in our today's press release. We will also discuss certain non-GAAP financial measures for comparison purposes only. Please refer to the earnings release for definitions of these measures and a reconciliation of GAAP to non-GAAP results. With that, I will turn the call over to Eric. Eric, please go ahead.

Speaker 2

大家好，欢迎各位参加震坤行2026年第一季度业绩发布会。2026年开局，公司延续去年下半年以来的恢复增长势头，业务规模稳步扩张的同时，增长质量实现进一步改善。在收入端，公司总体GMV和收入均连续第二个季度实现同比加速增长，其中GMV重回双位数增长区间，增速创下近几个季度以来新高。在盈利端，公司经营质量持续优化，毛利率得到环比提升，处于稳步提升趋势。得益于经济化运营、组织效率提升以及经营杠杆效应的进一步释放，一季度经调整净利润同比大幅改善103%，并首次实现一季度经调整后盈利。一季度通常是MRO行业的传统淡季，在此期间能实现GMV双位数增长和整体盈利，进一步加强了我们对实现全年GMV双位数增长和全年盈利目标的信心。现金流方面，经营活动现金净流出较去年同期大幅收窄，财务韧性进一步增强。整体来看，过去几个季度我们围绕客户结构调整以及运营效率提升所推进的一系列战略举措正在持续释放成效，推动公司进入稳健高质量的增长阶段。

Speaker 7

Hello, everyone. Thank you for joining our 1st quarter 2026 earnings conference call. We entered 2026 with strong momentum, building on the recovery trajectory established in the 2nd half of last year. As our business steadily scaled, the quality of our growth also improved. In the 1st quarter, both GMV and revenue growth accelerated year-over-year for the 2nd consecutive quarter. GMV returned to double-digit growth, and revenue delivered its strongest year-over-year performance in recent quarters. On the profitability front, our operating quality continued to improve. Gross margin achieved expansion sequentially, reflecting an improving trend. Driven by refined operations, improved organizational efficiency, and the ongoing benefits of operating leverage, adjusted net profit was up 103% year-over-year, marking the 1st time we have achieved adjusted profitability in the 1st quarter.

Speaker 7

Delivering these solid results during the first quarter, and off-season for the MRO industry reinforces our confidence in achieving double-digit GMV growth and full-year profitability in 2026. From a cash flow perspective, net cash outflow from operating activities narrowed significantly year-over-year, further enhancing our financial resilience. Overall, the strategic initiatives we have implemented over the past several quarters focused on optimizing customer mix and operational efficiency continue to deliver tangible results and position us for steadier, higher quality growth going forward.

Speaker 2

接下来我将重点介绍一下一季度我们在业务层面的主要进展。一季度GMV同比增长12.9%，较去年同期和上季度均有显著的提升。而目前订单和发货趋势来看，二季度GMV增长有望实现进一步的加速。强劲的业务增长势头得益于我们不断扩大的客户基础。一季度公司成交客户数同比增长11%至66,000家，显示中国制造业企业线上化采购趋势保持快速发展，也为公司未来业务的长期稳健发展奠定了坚实的客户基础。

Speaker 7

this quarter. Starting with GMV. First quarter GMV increased 12.9% year-over-year, representing a meaningful acceleration compared with both the year-ago period and the prior quarter. Based on current order activity shipment trends, we expect GMV growth to accelerate further in the second quarter. This strong performance was fueled by the continued expansion of our customer base. During the quarter, the number of transacting customers increased 11% year-over-year to 66,000, reflecting the accelerating adoption of online procurement among Chinese manufacturers. This growing customer base provides a solid foundation for our long-term sustainable growth.

Speaker 2

除了客户整体数量上的增长，各层级客户的表现也都呈现出积极向好的态势。震坤行平台中小客户GMV同比增速超过20%，业务增长势头保持强劲。中小企业客户的需求通常更加分散，采购场景也更加多元，更能体现公司的平台化服务能力。随着越来越多中小制造业客户加速线上化采购，相信公司在这一客群中的渗透率仍具备较大的提升空间。震坤行平台央企客户的恢复趋势在本季度进一步明确，GMV恢复至双位数同比增长，较上季度和去年同期均有明显改善。

Speaker 7

Beyond overall customer growth, we also saw broad-based strengths across customer segments. GMV from SME customers on the ZKH platform increased more than 20% year-over-year. SMEs typically have more fragmented demand and a broader range of procurement needs, making them a strong indicator of our platform's service capabilities. As online procurement adoption continues to deepen among small and medium-sized manufacturers, we believe there is significant room to further increase penetration in this customer segment. We also saw a more pronounced recovery among central SOE customers during the quarter, with GMV returning to double digits year-over-year growth, improving meaningfully on both a sequential and year-over-year basis.

Speaker 2

震坤行平台行业大客户总体表现符合预期，其中电器制造、通讯电子、新能源、钢铁有色等重点行业GMV同比均实现超过20%的强劲增长。并在半导体、储能、光模块、机器人及光通信等新兴产业领域持续积累头部客户资源。供帮帮平台继续保持高速增长，GMV同比增长超过30%。作为公司面向次终端分销客户和小微客户的重要平台，供帮帮依托更加标准化、电商化的运营模式，持续提升客户覆盖与线上转化能力，并与震坤行平台形成良好的协同互补，有效延伸了公司的服务半径，也为整体业务的增长持续注入新的增长动能。

Speaker 7

Performance among our industry key accounts was in line with expectations, with GMV growing more than 20% year-over-year across major verticals, including electrical manufacturing, communications, electronics, new energy, and steel and ferrous metals. We also expanded our presence in emerging sectors such as semiconductors, energy storage, optical modules, robotics, and optical communications, strengthening our customer base among industry leaders in these high-growth markets. The GBB platform also maintained strong momentum, with GMV increasing more than 30% year-over-year. As a key platform serving distributors, resellers, and micro and small businesses, GBB leverages a more standardized e-commerce-driven operating model to expand customer coverage and improve online conversion. More importantly, it creates strong synergies with the ZKH platform, effectively extending our service reach and providing an additional growth driver for the broader business.

Speaker 2

海外业务方面，一季度相关客户规模与覆盖区域进一步扩大，呈现强劲的业务增长势头，实现收入超过6倍的同比增长。我们将继续强化服务中国制造业企业出海的全链路能力。同时，我们也在稳步推进美国本土业务布局，持续完善产品开发、多渠道销售以及末端履约能力。海外业务在整体经营策略上，我们坚持高质量发展导向，更注重经营质量与投入效率。今年我们对海外业务的目标是实现全年盈亏平衡。客户和业务规模的持续增长，体现了公司在核心能力建设上的长期积淀与扎实成效。本季度，我们围绕客户价值创造，继续深化产品布局，打磨供应链能力，同时加速AI技术的场景化赋能，进一步强化平台的一站式服务能力。

Speaker 7

Turning to our international business. We continue to expand both our customer base and geographic footprint during the quarter, delivering robust growth with revenues increasing more than sixfold year-over-year. While continuing to strengthen our end-to-end capabilities to support Chinese manufacturers expanding overseas, we also advanced our local U.S. operations through enhancements in product development, multi-channel sales, and fulfillment. From an operating strategy perspective, we remain committed to high-quality growth with a strong focus on operating discipline and investment efficiency. Our goal for this year is to reach breakeven for our international business. The continued expansion of our customer base and business scale reflects our long-term investments in building core capabilities and the strong execution behind these efforts.

Speaker 7

During the quarter, with customer value at the heart of our strategy, we expanded our product portfolio, strengthened our supply chain capabilities, and accelerated AI adoption across business scenarios, further enhancing our one-stop platform service capabilities.

Speaker 2

产品力方面，我们聚焦重点行业与高专业度工业场景，持续深化核心产线建设。季度内，我们筛选出FA工厂自动化、电气自动化、泵管阀、刀具等十大重点产线，加大资源投入，并通过加强产销协同、批量采购以及提升专业化运营能力，进一步提升重点产线的竞争力。以FA工厂自动化产线为例，我们上线了FA商城，打造面向自动化产业链的一站式数字化采购与技术服务平台。该平台不仅涵盖海量FA零部件产品，更进一步整合智能选型、3D数模、技术支持等关键能力，有效解决了传统FA采购中选型复杂、技术门槛高等行业痛点。

Speaker 7

Starting with product capabilities, we further strengthened our core product offering by sharpening our focus on high-value industries and highly specialized industrial scenarios. During the quarter, we identified 10 priority product lines, including factory automation, electrical automation, pumps, pipes and valves, and cutting tools, and increased resource allocation to support their growth. By improving coordination between production and sales, optimizing bulk procurement, and enhancing specialized operational capabilities, we further bolstered the competitiveness of these key product lines. Taking factory automation, or FA, as an example, we launched the FA Mall during the quarter, a one-stop digital procurement and technical services platform tailored to the automation value chain. The platform offers a broad range of FA components and integrates key capabilities such as intelligent product selection, 3D modeling, and technical support, helping customers address traditional procurement pain points, including complex product selection and high technical barriers.

Speaker 2

十大重点产线能力的持续提升，我们在核心行业的客户渗透率也进一步增强。从品类来看，工厂自动化、工业润滑油、化学试剂等专业硬核MRO产品GMV均实现了双位数的稳健增长，进一步巩固了公司在高专业度工业场景中的核心竞争优势。此外，我们持续完善平台整体供给体系。截至一季度末，平台SKU数量从上季度末的2,300万进一步增加至2,700万。在此基础上，我们继续推进自有品牌建设，通过加速新品开发，持续丰富产品矩阵。一季度自有品牌产品共上线超过400个新品，其中包括透气型、轻型防撞帽、防静电手套等多款创新产品，覆盖个人防护、工具、清洁、办公等多元场景，进一步提升了自有品牌的产品竞争力与客户覆盖能力。自有品牌产品GMV实现超过20%的增长，占比提升至约9.7%。

Speaker 7

As our key product lines continue to advance, we have also deepened customer penetration in core industries. By category, professional and high-precision MRO products such as FA components, industrial lubricants, and chemical reagents all achieved solid double-digit GMV growth, further solidifying our core competitive advantage in highly specialized industrial scenarios. In addition, we continue to strengthen our platform's overall supply capabilities. By the end of the first quarter, the number of sellable SKUs on the platform increased to 27 million, up from 23 million at the end of the prior quarter. Building on this foundation, we further expanded our private label portfolio by accelerating new product development. In the first quarter, we introduced more than 400 new private label SKUs, including innovative items such as lightweight breathable bump caps and anti-static gloves, covering diverse scenarios from personal protection and tools to cleaning and office supplies.

Speaker 7

These efforts further enhanced the competitiveness of our private label products and expanded our customer reach. GMV from private label products grew by over 20% year-over-year and accounted for approximately 9.7% of total GMV in the first quarter of 2026.

Speaker 2

在履约侧，我们持续深化仓网布局与末端交付能力建设，进一步夯实多层级仓网运营体系。一季度，我们的自营运力规模持续扩容，推动末端配送覆盖广度与响应时效进一步提升。同时，得益于前期仓内布局优化和自动化设备的持续投入，仓库品效同比提升36%。在仓、运、配全链路经济化运营的共同推动下，一季度综合履约费用同比下降17%。随着后续仓网运营与运营数字化调度的迭代优化，我们相信未来综合履约费率仍有进一步下降空间。

Speaker 7

On the fulfillment front, we continue to enhance our warehouse network and strengthen last-mile delivery capabilities, further reinforcing our multi-tier operating system. In the first quarter, the capacity of our self-operated fleet continued to grow, improving both delivery coverage and responsiveness. At the same time, our prior investments in warehouse network optimization and automation drove a 36% year-over-year improvement in warehouse utilization efficiency. These end-to-end enhancements across warehousing, transportation, and delivery contributed to a 17% year-over-year reduction in our comprehensive fulfillment expenses for the quarter. Looking ahead, as we continue upgrading warehouse operations and digitalizing fleet scheduling, we believe there is further room to drive down our comprehensive fulfillment cost ratio.

Speaker 2

在持续强化产品力与履约能力的同时，我们积极构筑面向未来的技术护城河。围绕打造工业用品行业领先的全栈式AI技术能力这一核心目标，持续推进AI在工业用品业务场景中的体系化落地。

Speaker 7

While continuing to strengthen our product and fulfillment capabilities, we are also actively forging future-proof long-term technological advantages. Guided by our goal of building industry-leading full-stack AI capabilities for industrial supplies, we are systematically deploying AI across key industry use cases.

Speaker 2

在数据层面，我们持续完善震坤行数据字典与行业知识图谱能力，不断提升工业用品数据的结构化、关联化与场景化能力，并通过数据AI标注，进一步提升产品数据治理质量，为AI应用能力的强化提供坚实的数据基础。2026年，我们的目标是构建行业首个覆盖亿级工业用品数据与千万级行业关系的行业知识图谱，以进一步强化AI在复杂工业场景中的理解与应用能力。以询报价场景为例，除了系统对接，询报价也是客户采购的重要入口。目前，在询报价场景中，约30%的物料匹配和确定已实现由AI完成。2026年，我们目标将整体AI定品率进一步提升至70%，其中紧固件、泵管阀、手工具等数据型品类的AI定品率要达到80%至90%，这将有力提升我们产品的报出率、动销和销售转化率。

Speaker 7

At the data layer, we continue to enhance the ZKH Data Dictionary and industry knowledge graph capabilities, improving the structure, interconnectivity, and real-world applicability of industrial product data. We also strengthen data governance through AI-powered data annotation. Together, these efforts have established a stronger data foundation for broader AI applications across our business. In 2026, our goal is to build the industry's first knowledge graph exceeding 100 million industrial product data points and 10 million industry relations. This will further strengthen AI's ability to understand and operate in complex industrial supply scenarios. Taking the request for quote scenario as an example. While many procurement needs can be fulfilled directly through our online platform, quotation workflows remain an important customer entry point. Today, approximately 30% of material matching and product identification tasks within quotation workflows are already handled by AI.

Speaker 7

By the end of 2026, we aim to increase the overall AI-powered product identification rate to 70%, with data-intensive product lines such as fasteners, pumps, pipes and valves, and hand tools expected to reach 80%-90%. We believe these advancements will meaningfully improve quotation completion rates, inventory turnover and sales conversion rates.

Speaker 2

在模型层面，行家玲珑MRO垂直大模型持续迭代升级，进一步强化了其在工业用品复杂业务场景中的理解、推理与任务执行能力。其中，我们加强了行家玲珑大模型对商品图片数据的训练，升级了多模态模型能力，并上线业内首个工业用品智能视觉搜索引擎行家慧眼。通过先进的图像识别技术，行家慧眼可快速确定现场物料类型及规格参数，并结合具体业务场景完成需求诊断与智能选型，显著提升复杂工业用品场景下的沟通与采购效率。

Speaker 7

At a model layer, our Hangjia Linglong MRO vertical large language model continue to evolve, further improving its ability to understand, reason, and execute tasks in complex industrial supply scenarios. During the quarter, we expanded image-based training to strengthen the model's multimodal capability and officially launched Hangjia Huiyan, the industry's first intelligent visual search engine for MROs. Powered by advanced image recognition, Hangjia Huiyan can rapidly identify material types and specifications and pair them with specific application contexts to deliver intelligent diagnostics and product recommendations. This significantly improves communication and procurement efficiency in complex industrial supply scenarios.

Speaker 2

在开发工具层，我们积极建设工业用品AI开发者平台，通过整合自研模型以及AI工具链，将复杂AI能力以标准化、低门槛的方式快速赋能各业务团队。同时，我们在公司内部推行AI数字化全员计划，鼓励各业务团队结合业务场景，自主开发和应用AI工具，加速AI能力在公司内部的普及与落地。仅第一季度，团队便开发并上线超过60个AI智能体，有效提升了运营效率，月度释放人力超过2,000工时。同时，IT团队研发效能持续提升。2026年我们的目标是将AI代码生成率从目前的30%提升至80%。

Speaker 7

At the orchestration layer, we are also actively building our MRO AI developer platform by integrating proprietary models and AI tool chains, standardizing advanced AI capabilities, and making them easier for cross-functional teams to access and apply. We also launched our AI for All initiative across the organization, encouraging teams to develop and deploy AI tools tailored to specific business scenarios and accelerating AI adoption across the company. In the first quarter alone, our teams developed and launched more than 60 AI agents and RPA bots, driving meaningful efficiency gains and freeing up more than 2,000 human labor hours per month. Our IT development efficiency also continue to improve. In 2026, we aim to increase our AI code generation rate from approximately 30% today to 80%.

Speaker 2

在应用层，我们已全面构建覆盖商品、销售、运营、客服等核心业务环节的一体化AI应用体系，形成了包括AI寻报价、AI物料管家、AI推品大脑等在内的多元AI智能体矩阵，AI商业价值逐步释放。今年我们将进一步优化迭代核心智能体应用，预计由AI带动的销售金额将加速增长。

Speaker 7

At the application layer, we have established an integrated AI ecosystem spanning core business functions including merchandising, sales, operations, and customer service. Within this ecosystem, we have developed a diverse portfolio of AI agents such as AI Quotation Assistant, AI Material Manager, and ProductRecom, which are increasingly delivering tangible business value across our operations. In 2026, as we continue to refine and scale these AI applications, we expect AI-driven sales to grow meaningfully.

Speaker 2

展望2026年，我们将继续围绕产品力、交付力及AI能力持续提升投入，不断强化公司在复杂工业场景中的综合服务能力与长期竞争壁垒。在此基础上，我们要坚持高质量增长导向，持续提升经营效率与盈利能力，推动公司朝着全年盈利的目标稳步推进。下面我请我们的CFO Max Lai为大家详细介绍公司的财务表现。谢谢大家。

Speaker 7

As we move through 2026, we will continue investing in product capabilities, fulfillment capacity, and AI innovation, further strengthening our comprehensive service offerings for complex industrial scenarios and reinforcing our long-term competitive advantages. Building on this foundation, we will remain focused on high-quality growth by driving greater operational efficiency and earnings, steadily advancing toward our goal of full-year profitability. I will now turn the call over to our CFO, Max Lai, to present our financial results. Thank you, everyone.

Speaker 5

Thank you, Eric, and thanks everyone for making time to join our earnings call today. Now let me walk you through our financial performance for the first quarter of 2026. We started the year with solid momentum across key financial metrics. In the first quarter, we delivered accelerated top-line growth, improved operating efficiency, and greatly enhanced profitability. Notably, we achieved a non-GAAP adjusted profitability, marking our first profitable first quarter on an adjusted basis and a meaningful turnaround from the same period last year. These results reflect the improving quality of our growth, increasing scalability of our operating model, and ongoing benefits of strategic initiatives we've been implementing over the past several quarters. Let's now take a closer look at first quarter's financial performance, starting with the top line.

Speaker 5

During the quarter, we built on the improving trend established in the second half of last year, with both GMV and revenues accelerated year-over-year for the second consecutive quarter. GMV increased by 12.9% year-over-year to RMB 2.45 billion, while total revenues grew by 9.2% year-over-year to RMB 2.11 billion, both representing our strongest quarterly growth in recent periods. This performance was supported by the continued expansion of our customer base and stronger platform engagement. Our earnings profile also strengthened during the quarter, supported by improved operating leverage and ongoing efficiency gain. Gross profit increased by 6.6% year-over-year to RMB 354 million, while gross margin moderated slightly year-over-year from 17.2% to 16.7%. Our underlying margin trends improved sequentially, with GMV-based gross margin increase by 90 basis points. Going forward, we will continue to improve business quality through three priorities.

Speaker 5

A more balanced customer and product mix, high contribution from private label products, and greater supply chain efficiency. On operational efficiency, we maintained strong cost discipline while continuing to invest in capabilities that support our long-term growth. Total operating expenses decreased by 8.8% year-over-year to RMB 376.5 million, representing 17.8% of net revenues, compared with 21.3% in the same period last year. Breaking this down, fulfillment expenses decreased by 16.8% year-over-year to RMB 77.6 million. Sales and marketing expenses remained relatively stable at RMB 137.6 million. R&D expenses decreased by 25.9% year-over-year to RMB 29.3 million. General and administrative expenses decreased by 7.9% year-over-year to RMB 131.9 million. These improvements reflected continued reinforcement of our operating model, enhanced organizational efficiency, and more disciplined resources allocation.

Speaker 5

During the quarter, GMV per effective employee increased by over 20% year-over-year, reflecting a meaningful improvement in our workforce productivity. In addition, as we mentioned earlier, we continue to optimize our overseas business strategy with a stronger focus on operating quality and investment efficiency. This contributed to lower overseas-related spending and further improvement in our overall expense structure. These efficiency gains translated into significant improvements in profitability compared to the same period last year. Operating loss narrowed by 72.2% to RMB 22.5 million, with operating loss margin improving to negative 1.1% from negative 4.2%. Non-GAAP EBITDA turned positive at RMB 4.2 million compared with negative RMB 52 million in the prior year period, with margin increasing to positive 0.2% from negative 2.7%.

Speaker 5

Most notably, we achieved a non-GAAP adjusted net profit of RMB 1.7 million, compared with non-GAAP adjusted net loss of RMB 50.2 million in the same period last year. This significant turnaround reflects the combined impact of top-line recovery, improved operating efficiency, and further operating leverage. Turning to balance sheet. We maintained a healthy liquidity position. As of March 31st, 2026, our cash and cash equivalents, restricted cash, and short-term investments totaled RMB 1.84 billion, providing us with ample financial flexibility to support our business operations and strategic priorities. Operating cash flow also improved meaningfully year-over-year. Net cash used in operating activity was RMB 34 million in the first quarter, compared with cash outflow of RMB 97.1 million in the same period of 2025, reflecting continued improvement in our working capital management.

Speaker 5

To recap, the first quarter marks a strong start to 2026, with further accelerated top-line growth, continued improvement in operating efficiency, and substantial gains in profitability. Notably, we achieved our first non-GAAP adjusted net profitability in the seasonally soft first quarter. Looking ahead, our focus remains on high-quality growth and disciplined execution. This concludes our prepared remarks. Thank you. We would now like to open the call for the questions. Operator, please go ahead.

Speaker 6

We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. Again, it is star then one to ask a question. The first question comes from Liu Chang with Deutsche Bank. Please go ahead.

Speaker 4

Let me translate myself. Thank you management for taking my question. The first quarter, the company's gross margin improved quarter-over-quarter, but it still declined year-over-year. Could management share your view on the long-term trend of gross margin? What factors could constrain further improvement in gross margin? What action has the company taken to improve gross margin? Thank you.

Speaker 2

影响整体毛利率呢，我想从三个方面来说。主要三个方面，一个是产品的品类结构，一个是客户结构，还有自有品牌，这三个方面。那品类结构这方面呢，就公司的产品线和SKU非常分散，不同产品的毛利率差异还是比较大。部分产品线毛利率较低，但毛利额和GMV增长还较快。短期可能拉低整体毛利率，但如果整体能够带来客户渗透、供应能力的扩张和绝对毛利率的增长，仍然具有经营的价值。同时呢，部分MRO产品线的毛利率和毛利同步提升，是我们的强势优势产线。例如个人防护、清洁、OEM紧固件、搬运存储、安防等产线，体现出更好的利润转化效率。那随着这些高质量产品线占比逐渐提升，有助于改善整体毛利率结构。谢谢，请翻译。

Speaker 7

Thank you for the question. I will take this question from 3 parts. Namely, category mix, customer mix, and private labels. For category mix, we have lots of SKUs and product lines, things are quite fragmented. The gross margins of different products vary greatly. For some product lines, gross margins are lower, but the growth for their gross profits and the GMV is relatively fast. In the short run, they might drive down the overall gross margins. If they're able to still drive customer penetration, extend our supply capabilities, and contribute to the growth of our absolute gross profit, then there's still value in operating those categories. At the same time, some MRO products' gross margins and gross profits are going up simultaneously. Especially for our advantageous product lines.

Speaker 7

By that I mean things like PPE or personal protective equipment, cleaning, OEM fasteners, handling and storage and security, et cetera. These categories are reflecting better profit conversion efficiency, so to speak. As these high-quality product lines are taking a higher share out of the entire portfolio, this will be conducive to improving our overall gross margin structure. Please translate.

Speaker 2

总结来看，去年的第四季度和今年第一季度如果同期相比，毛利率略有下降的话，主要的因素还是我们小大宗产品，包括柴油、变压器油、硅光片这一类低毛利率的产品，增速达到了41%。这类产品的提升相比较而言，拉低了整体的毛利率。但总体来看，我们的毛利率的情况是比较健康的。请翻译。

Speaker 7

In terms of your question about Q1 being lower year-over-year, it was primarily due to the gross margin drop in categories including diesel, transformer oil, and silicon photonics wafers, and that has driven down our gross margin. Overall, our gross margin is pretty solid.

Speaker 2

从客户结构来看，一般来讲，中小客户的毛利率要比大客户来得高一些。所以中小客户占比趋势会影响整体毛利率的趋势。那目前我们中小客户GMV占比约30%多一点，大客户GMV占比约60%。目前中小客户增速在20%，这说明客户结构层面，我们的毛利率实际上是逐渐在提升的。请翻译。

Speaker 7

For my second point about customer mix, usually the gross margin for SME customers are higher than key accounts or large customers. The share of the GMV on the part of the SME customers, that trend will impact the trend of our overall gross margins. Currently, SME customers' GMV accounts for about 30%+ of the total, while key accounts GMV accounts for about 60%. The SME customers are growing at 20% GMV-wise. From a customer mix perspective, our gross margin is improving. Please translate.

Speaker 2

自有品牌方面，自有品牌的毛利率比非自有品牌要高一些。所以自有品牌占比趋势会影响整体毛利率的趋势。目前我们自有品牌GMV占比约9.7%，长期目标是希望能做到30%。总体结论是公司管理毛利率不会只追求单一产品或单一季度毛利率的最大化，而是更关注整体产品供应能力的提升、客户覆盖加深和绝对毛利额的增长。不同产品线毛利率差异较大，阶段性产品组合变化会影响整体毛利率，但长期目标是通过优势产线、自有品牌、采购效率和客户结构优化，推动毛利额持续增厚。

Speaker 7

In terms of private labels, gross margins for private labels are typically higher than non-private labels. That trend will also impact the overall gross margin trend. Private label GMV currently accounts for 9.7%, and our long-term goal for it is to reach over 30%. In terms of managing gross margin, we will not pursue the maximization of a single product or a single quarter for the gross margin to maximize, but we care more about the improvement of our overall supply capabilities, the deepening of our customer reach, and the growth of our absolute gross profits. We understand how gross margin across different product lines varies by a lot. The adjustment and changes to product portfolio for different stages of our development will impact overall gross margin.

Speaker 7

Our long-term goal is to drive gross profits continuously by way of advantageous product lines, private labels, and the optimization of customer mix and improvement of our purchasing efficiency.

Speaker 6

Are you ready for your next question?

Speaker 4

可以问下一个问题了吗？

Speaker 2

可以。

Speaker 7

Yeah, go ahead.

Speaker 6

The next question comes from Jing Wan with CICC. Please go ahead.

Speaker 3

感谢管理层接受我的提问。首先恭喜公司这个季度取得了不错的业绩。我的问题是关于我们的一些细分行业的表现，就是我们观察到一些高技术制造业在一到四月的增速有一些环比的加速，比如说通信电子、汽车制造和设备制造行业的景气度都还不错，前面管理层也分享了一些。能不能请管理层进一步分享一下公司内部观察到的一些情况，以及公司的这些细分行业的表现，以及公司是否有针对性地推出了一些新的举措来获取更多的份额。I will translate myself. We noticed that high tech manufacturing, such as communication electronics, auto manufacturing and equipment manufacturing, accelerated its growth in the first quarter and April.

Speaker 3

Could management share more about whether we are seeing similar trend and how is our performance in these sub-sectors? Any initiatives has been introduced to expand our market share in this sector. Thanks.

Speaker 2

确实看到国内高技术制造企业在MRO采购的景气度是更高一些的。电器制造行业、通信电子行业、新能源行业以及有色金属行业，GMV都实现了超过20%的同比增长。在半导体、储能、光模块、机器人及光通信等新兴行业的领域，持续积累越来越多的客户资源。增长较快的行业包括有色金属行业，一到四月日均订单同比增长100%。通信电子，一到四月日均订单增长了45%。新能源一到四月日均订单增长了33%。精细化工和医药、电器制造等也都带来了快速的增长。请翻译。

Speaker 7

Thank you for the question. Indeed, we have seen how players in the advanced manufacturing sector buying more in terms of MROs, and these include sectors like electrical manufacturing, communication, electronics, alternative energy or new energy, and non-ferrous metals. The GMV for the aforementioned sectors all achieved a year-over-year growth of over 20%. For semiconductors, energy storage, optical modules, robotics and optical communication, these emerging sectors, we are accumulating more and more customer resources. Other sectors that have been growing relatively fast are steel. Specifically for steel and non-ferrous metal, if we look at the daily average order volume January through April, this metric has grown 100% for steel and non-ferrous metals. For the same metric, basically daily average order volume January through April, grew by 45% for communication electronics, and 33% for alternative energies. Refined chemicals, pharmaceuticals, electrical manufacturing have all grown very quickly.

Speaker 2

为了更好地提升这些行业的渗透率和更多的市场份额，我们做了三件事。一方面组建专门的行业销售团队，专门开发覆盖这些行业的客户资源。第二个，在不断丰富和深耕覆盖这个行业需求的行业商品池和重点客户的客户商品池。第三点，针对机器人和未来各类设备的智能化发展的需求，我们上线了FA工厂自动化零部件商城。这三个方面，这是我对这个问题的回答。

Speaker 7

In terms of the measures we are taking to improve our sector penetration and our share, we did 3 things. First is we have formed a sector-specific sales forces to target these customers in these specific sectors. Secondly, we are building out sector-specific commodity pool and a customer-specific commodity pool for these sectors. In order to embrace the growth in robotics and smart products, we have launched the FA or Factory Automation Mall as was alluded to in the prepared remarks. That was my answer to this question. Thank you.

Speaker 6

The next question comes from Brook Wang with CITIC. Please go ahead.

Operator

陈罗外东，晚上好，感谢继续提问机会。我之前就有一个小问题请教一下，海外业务在22年的一季度我们看到同比大升了接近6倍，那能否介绍一下今年海外业务总体的一个策略？然后之后我自己回来翻译一下。

Speaker 7

Based on you mentioned before, the company's overseas business revenue increased by 60% year-over-year in the first quarter. Could you please introduce this year's strategy for the overseas business? Thank you.

Speaker 2

今年前几个月，我们海外的业务不仅跟去年同期比较，实现了比较快速的增长，环比每个月我们也是实现了增长。我们的海外策略主要还是两个方面，一个方面是服务中国企业出海，依托利用好已有的中国客户的关系，撬动更多的海外的订单，强化海外不同国家区域的末端的交付能力，这是服务中国企业出海方面。那另外一个方面，我们很重要的业务是美国本地化的经营。美国本地化的业务我们更加聚焦，不断地收敛，更加聚焦，重点开发仓库经营过程中需要的产品。我们现在希望把这个品类先做强，再增加其他的品类。所以总体来说，在业务拓展同时，我们会更注重投入的效率，不做超前费用的投入。同时坚持实现今年海外业务这样一个盈亏平衡。这是关于这个问题的回答。

Speaker 7

Thank you for that question. Yes, indeed. For the first few months of this year, we not only achieved the year-over-year growth, we also achieved month-over-month growth. Two things about overseas business. Firstly, we are primarily serving Chinese companies going abroad. We will be relying and leveraging our existing customer relations with those Chinese customers to drive more overseas orders. We will also strengthen our last mile fulfillment capabilities when it comes to serving the different geographies overseas. Secondly, localized operations in America is extremely important to us. We will be more focused, more laser focused in our business there. Specifically, we will be focusing on providing the categories needed for warehousing operations. We will get that done well before we branch out into other SKUs and categories.

Speaker 7

Overall, when it comes to developing and expanding our business in overseas markets, we will focus more on the efficiency and returns of our investments and spend, and we would not spend ahead of time. Our goal is to try to break even for overseas business this year. That concluded my answer to this question. Thank you.

Speaker 6

That concludes the question and answer session. I would like to turn the conference back over to management for any additional or closing comments.

Speaker 1

Thank you once again for joining us today. You can find the webcast of today's call on ir.zkh.com. If you have any further questions, please feel free to contact us. Our contact information can be found in today's press release. Thank you and have a great day.

Speaker 6

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Powered by Quartr