Share count
5.7Bpeak FY2023
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ZKH, ZKH Group Limited
Our methodology for estimating whether adjustments are necessary is continually evaluated for factors including significant changes in product demand, market conditions, condition of the inventory, or liquidation value.
The business
What it sells, where the money comes from, the kind of company it is.
Revenue · FY2025
CN¥9.0B
+2.6% YoY · 4% 4-yr CAGR
Vital signs · TTM, with 5-yr average
Revenue CN¥9.0B 5-yr avg CN¥8.5B
The business in brief
read the 10-K →What this business is and what moves its needle, from its own SEC filings.
- Situation
- Unprofitable. No sustained operating profit across the record; an earnings multiple has nothing to rest on. What the record does show is revenue, the gross-margin trajectory, and the burn against the cash on hand.
- What moves the needle
- Operating margin has run around −4.6% through the cycle on a 16% gross margin, the operating line deeply negative — so the lever is the path to a margin at all: revenue growth against the cost curve and the cash runway, not the level of a margin that isn't there yet. On its own account, the filing leans hardest on supplier & input dependence, set against the numbers in what the filing emphasizes, below.
- Is it a good business?
- Return on capital has rarely cleared the cost of capital (median −15%, above 15% in 0 of 3 years). Owner earnings, the cash-based check, have been thin too. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.
Every line is arithmetic on the company's filings, shown in full in the sections below.
The record
Ten years of arithmetic, read across the cycle.
The record, 2021–2025
realized figures from each filing · older years to the left| 2021’21 | 2022’22 | 2023’23 | 2024’24 | 2025’25 | TTMTTMDec 2025 | |
|---|---|---|---|---|---|---|
| Income statement | ||||||
| CN¥7.7B | CN¥8.3B | CN¥8.7B | CN¥8.8B | CN¥9.0B | CN¥9.0B | RevenueRevenue |
| 14% | 16% | 17% | 17% | 16% | 16% | Gross marginGross mgn |
| (CN¥1.1B) | (CN¥686M) | (CN¥399M) | (CN¥339M) | (CN¥213M) | (CN¥213M) | Operating incomeOp. inc. |
| −14.5% | −8.2% | −4.6% | −3.9% | −2.4% | −2.4% | Operating marginOp. mgn |
| (CN¥1.1B) | (CN¥731M) | (CN¥305M) | (CN¥268M) | (CN¥140M) | (CN¥140M) | Net incomeNet inc. |
| Cash flow & returns | ||||||
| (CN¥1.4B) | (CN¥504M) | (CN¥568M) | CN¥229M | CN¥9M | CN¥9M | Operating cash flowOp. cash |
| CN¥53M | CN¥76M | CN¥73M | CN¥55M | CN¥48M | CN¥48M | DepreciationDeprec. |
| (CN¥342M) | CN¥151M | (CN¥337M) | CN¥442M | CN¥100M | CN¥100M | Working capital & otherWC & other |
| CN¥145M | CN¥37M | CN¥50M | CN¥79M | CN¥53M | CN¥53M | CapexCapex |
| 1.9% | 0.4% | 0.6% | 0.9% | 0.6% | 0.6% | Capex / revenueCapex/rev |
| (CN¥1.5B) | (CN¥541M) | (CN¥618M) | CN¥150M | (CN¥44M) | (CN¥44M) | Owner earningsOwner earn. |
| −20.0% | −6.5% | −7.1% | 1.7% | −0.5% | −0.5% | Owner earnings marginOE mgn |
| (CN¥1.5B) | (CN¥541M) | (CN¥618M) | CN¥150M | (CN¥44M) | (CN¥44M) | Free cash flowFCF |
| −20.0% | −6.5% | −7.1% | 1.7% | −0.5% | −0.5% | Free cash flow marginFCF mgn |
| — | — | -15% | -16% | -9% | -9% | ROICROIC |
| — | — | -9% | -9% | -5% | -5% | Return on equityROE |
| — | — | −9% | −9% | −5% | −5% | Retained to equityRetained/eq |
| Balance sheet | ||||||
| — | CN¥2.0B | CN¥2.0B | CN¥2.0B | CN¥1.9B | CN¥1.9B | Cash & investmentsCash+inv |
| — | CN¥3.1B | CN¥3.6B | CN¥3.1B | CN¥3.3B | CN¥3.3B | ReceivablesReceiv. |
| — | CN¥656M | CN¥669M | CN¥625M | CN¥670M | CN¥670M | InventoryInvent. |
| — | CN¥2.6B | CN¥2.9B | CN¥2.5B | CN¥2.7B | CN¥2.7B | Accounts payablePayables |
| — | CN¥1.2B | CN¥1.4B | CN¥1.2B | CN¥1.2B | CN¥1.2B | Operating working capitalOper. WC |
| — | CN¥6.3B | CN¥7.0B | CN¥6.2B | CN¥6.1B | CN¥6.1B | Current assetsCur. assets |
| — | CN¥3.5B | CN¥4.0B | CN¥3.3B | CN¥3.4B | CN¥3.4B | Current liabilitiesCur. liab. |
| — | 1.8× | 1.7× | 1.9× | 1.8× | 1.8× | Current ratioCurr. ratio |
| — | CN¥31M | CN¥31M | CN¥31M | CN¥31M | CN¥31M | GoodwillGoodwill |
| — | CN¥6.8B | CN¥7.4B | CN¥6.6B | CN¥6.5B | CN¥6.5B | Total assetsAssets |
| — | — | — | CN¥40M | CN¥45M | CN¥45M | Total debtDebt |
| — | — | — | (CN¥1.9B) | (CN¥1.8B) | (CN¥1.8B) | Net debt / (cash)Net debt |
| -104.8× | -7.3× | -20.6× | -17.8× | -18.8× | -11.0× | Interest coverageInt. cov. |
| — | (CN¥4.1B) | CN¥3.2B | CN¥3.1B | CN¥2.9B | CN¥2.9B | Shareholders’ equityEquity |
| Per share | ||||||
| 4.86B | 5.30B | 6.11B | 5.74B | 5.69B | 5.56B | Shares out (diluted)Shares |
| CN¥1.58 | CN¥1.57 | CN¥1.43 | CN¥1.53 | CN¥1.58 | CN¥1.62 | Revenue / shareRev/sh |
| CN¥-0.23 | CN¥-0.14 | CN¥-0.05 | CN¥-0.05 | CN¥-0.02 | CN¥-0.03 | EPS (diluted)EPS |
| CN¥-0.31 | CN¥-0.10 | CN¥-0.10 | CN¥0.03 | CN¥-0.01 | CN¥-0.01 | Owner earnings / shareOE/sh |
| CN¥-0.31 | CN¥-0.10 | CN¥-0.10 | CN¥0.03 | CN¥-0.01 | CN¥-0.01 | Free cash flow / shareFCF/sh |
| CN¥0.03 | CN¥0.01 | CN¥0.01 | CN¥0.01 | CN¥0.01 | CN¥0.01 | Cap. spending / shareCapex/sh |
| — | CN¥-0.77 | CN¥0.53 | CN¥0.54 | CN¥0.52 | CN¥0.53 | Book value / shareBVPS |
Share counts before 2024 are restated ×4 for a stock split, so per-share figures sit on one basis.
Per-share growththe realized rate an owner's share compounded
| 4-yr | 5-yr | |
|---|---|---|
| Revenue / share | +0.1%/yr | +0.1%/yr (4-yr) |
| Capital spending / share | −25.3%/yr | −25.3%/yr (4-yr) |
The record, charted
FY2021–2025Each measure over its full record; the current point and the worst year marked. Share counts on the current split basis.
ROIC
−9%low FY2024
Gross margin
16%low FY2021
Owner earnings vs. net income
Owner earningsNet incomeThe accountant's number, and the cash an owner can take; the gap is the tell.
(CN¥44M)owner earningsvs.(CN¥140M)net incomelow FY2021
Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.
In fiscal 2025 the business turned a CN¥140M loss into (CN¥44M) of owner earnings: more cash than the profit line showed, after the non-cash charges and the capital it put back in.
| FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | |
|---|---|---|---|---|---|
| Reported net income | (CN¥140M) | (CN¥268M) | (CN¥305M) | (CN¥731M) | (CN¥1.1B) |
| Depreciation & amortizationnon-cash charge added back | +CN¥48M | +CN¥55M | +CN¥73M | +CN¥76M | +CN¥53M |
| Working capital & othertiming of cash in and out, other non-cash items | +CN¥100M | +CN¥442M | −CN¥337M | +CN¥151M | −CN¥342M |
| Cash from operations | CN¥9M | CN¥229M | (CN¥568M) | (CN¥504M) | (CN¥1.4B) |
| Capital expenditurecash put back in to keep running and to grow | −CN¥53M | −CN¥79M | −CN¥50M | −CN¥37M | −CN¥145M |
| Owner earnings | (CN¥44M) | CN¥150M | (CN¥618M) | (CN¥541M) | (CN¥1.5B) |
| Owner-earnings marginowner earnings ÷ revenue | 0% | 2% | -7% | -7% | -20% |
Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position .
Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.
Quality & stewardship
Returns, the balance sheet, capital allocation, and pay.
Owner’s Scorecard
FY2025 20-F · source on SEC EDGAR →
Will it survive?
- Can it pay its interest? -11.0×Does not cover its interestOperating income (CN¥213M) ÷ interest expense CN¥19M
What this means
A full year of operating profit didn't cover the interest bill. This is the zombie zone: the business depends on refinancing, asset sales, or forbearance to service its debt.
- How heavy is the debt, net of cash? +CN¥1.8BNet cashCash CN¥1.0B + ST investments CN¥825M − debt CN¥45M
What this means
Cash and short-term investments exceed every dollar of debt by CN¥1.8B, on net the company owes nothing, and can act from strength when others can't. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
- TightDSO 132 + DIO 33 − DPO 132 days
What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.
Is it a good business?
- Below average through the cycle3-yr median, range -16%–-9%; -9% latest = NOPAT (CN¥169M) ÷ invested capital CN¥2.0BIndustry peers: median 30%
What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 3 years (it ran -9% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
- Consumes cash through the cycle5-yr median margin, range -20%–2%; latest (CN¥44M) = operating cash CN¥9M − maintenance capex CN¥53MIndustry peers: median 7%
What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's -0% of revenue this year, a -7% median across 5 years.
- Loss, but cash-generativeNet income (CN¥140M) · cash from operations CN¥9M
What this means
The company reported a net loss, so a conversion ratio isn't meaningful. What matters then is whether operations still threw off cash, here, they did.
How is the cash used?
- No surplus to allocate
What this means
The business didn't generate positive Owner Earnings this year, so any distributions came from the balance sheet or borrowing, not from operations.
- Investing or harvesting? 1.10×MaintainingCapex CN¥53M ÷ depreciation CN¥48M
What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.
Graham’s defensive tests · 1 of 4 met
Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.
- Adequate size —Revenue ≥ $2B (a dollar floor) · CN¥9.0B
What this means
Big enough to weather a storm. Graham's floor is a dollar figure — about $2B of revenue as a conservative modern stand-in. This company reports in its home currency and we carry no exchange rate, so we show the figure and leave the size bar for you to apply rather than convert it with a number we don't have.
- Strong liquidity NearCurrent ratio ≥ 2× · 1.79×
What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
- Conservative debt PassDebt ≤ working capital · CN¥45M vs CN¥2.7B WC
What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
- Earnings stability MissA profit every year (5-yr record) · 5 loss years
What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
- Dividend record MissUninterrupted dividends · none paid
What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are CN¥-0.04/share (latest year CN¥-0.02), the averaged base the calculator's gate runs on, and book value is CN¥0.53/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
Durability & moat, 2021–2025
Whether the record’s returns held, and what the capital reinvested earned.
- Profitable years 0 of 5
What this means
Lost money in 5 year(s), look at what happened there before trusting the average.
- Operating margin −11% → −3% (2-yr avg ends)
What this means
Through the cycle the operating margin widened — about −11% early to −3% lately, median −5% — pricing power intact or improving.
- Reinvestment, incremental ROIC returns capital
What this means
The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.
- Worst year 2021 · −14.5% op. margin
What this means
Operations went underwater in 2021, understand why before trusting the good years.
Does AI threaten the moat?
Moderate contestabilityAI is likely to reshape costs and some products here without clearly contesting or sparing the core moat; how the company itself frames it is the tell.
In its own filing Raised, but not as a competitor
The filing raises AI among its risks, but in other terms (security, regulation, energy or the like), not as a competitor to its product; it frames AI mainly as a capability.
The question is whether a moat the record shows as durable outlasts a technology that lowers the cost of part of what the firm sells. The durability is read in the record above, the filing's own framing of AI beside it; the industry label decides nothing on its own.
Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.
All figures as filed; the source filing is linked above.
Current Position
as of fiscal year-end, Dec 31, 2025Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.
Current assetsCN¥6.1B
- Cash & short-term investmentsCN¥1.9B
- ReceivablesCN¥3.3B
- InventoryCN¥670M
- Other current assetsCN¥355M
Current liabilitiesCN¥3.4B
- Debt due within a yearCN¥2M
- Accounts payableCN¥2.7B
- Other current liabilitiesCN¥705M
Current ratio1.79×all current assets ÷ what's due · Graham looked for 2×
Quick ratio1.60×stricter: inventory excluded
Cash ratio0.54×strictest: cash alone against what's due
Working capitalCN¥2.7Bthe cushion left after near-term bills
Debt due this year vs. cashCN¥2M due · CN¥1.9B cash
covered by cash on hand, no refinancing forced · both figures from the Dec 31, 2025 balance sheet
Deeper floors
Tangible book valueCN¥2.9Bequity stripped of goodwill & intangibles
Net current asset valueCN¥2.5BGraham's net-net: current assets less all liabilities
Debt incl. operating leasesCN¥95MCN¥50M of it operating leases
Deferred revenueCN¥27Mcustomer cash collected before delivery; operating float
From the company's latest filing.
Peers, Trading Companies & Distributors
The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.
| Company | Revenue | Gross margin | Op. margin | ROIC | Owner earn. margin |
|---|---|---|---|---|---|
| HDHome Depot Inc. | $164.7B | 34% | 14.3% | 41% | 10% |
| LOWLowe's Cos Inc. | $86.3B | 33% | 10.6% | 33% | 7% |
| SHWSherwin-Williams Company (The) | $23.6B | 46% | 15.9% | 23% | 11% |
| TSCOTractor Supply Company | $15.5B | 35% | 9.5% | 31% | 7% |
| BLDRBuilders FirstSource | $15.2B | 28% | 5.9% | 16% | 5% |
| ZKHZKH Group Limited | CN¥9.0B | 16% | -4.6% | -15% | -7% |
| FASTFastenal Company | $8.2B | 46% | 20.2% | 30% | 12% |
| FNDFloor & Decor | $4.7B | 42% | 7.7% | 16% | 6% |
| Group median | — | 34% | 10.0% | 26% | 7% |
The price
What a price has to assume.
What the price implies
reverse-DCFEnter the US price, in dollars: the NYSE/Nasdaq quote you hold. Per the filing's own cover, “American depositary shares (each representing thirty-five (35) Class”; ZKH Group Limited reports in CNY, so every figure in this tool is stated per ADS and translated at CNY 1 = $0.147 (2026-07-17, reference rate) so your dollar quote reconciles exactly. The record tables elsewhere on this page remain as filed, in CNY.
ZKH Group Limited is profitable, but owner earnings are negative this year because capital spending currently outruns operating cash, a build-out, so the owner-earnings reverse-DCF has no positive base to grow. We read the price from both ends instead: type a price to see the steady-state profitability it demands, then set the mature margin you would believe and weigh the two against each other. Nothing leaves your browser unless you enter it in your notebook.
$
The assumptions
Revenue, delivered4%/yr’21→’25
Enter a price to run it.
Owner earnings it must reach—
Margin the price demands—
Owner-earnings margin today−0%
A dated snapshot of the price you typed, the assumptions you set, and what the page showed for them. A snapshot is never edited after it is saved. Your notebook is yours alone — the commitment states what is stored and what we will never do.
Two reads of one future. From your price: the owner earnings the company must reach, valued at a mature multiple and discounted back at your rate, expressed as the margin it implies on revenue grown at your rate. From your belief: the mature margin you would credit, set on the dial above. When the margin the price demands runs above the one you would believe, you are paying for a future taken on faith. For a deep cyclical at a trough, normalized through-cycle earnings are the better lens; this mode is for the genuinely unprofitable, and for the profitable business whose capital spending currently outruns its cash.
Cite: Owner Scorecard, "ZKH Group Limited (ZKH), the owner's record," https://ownerscorecard.com/c/ZKH, data as of 2026-07-09.
Manual order: ← ZJK its page in the Manual ZKIN →
Industry order: ← YDDL the Trading Companies & Distributors chapter