ZKH Group Limited reported its first quarterly operating profit in the second quarter of 2026, reflecting a 20.3% year-over-year increase in gross profit to 430 million yuan. The company, listed as ZKH Group Ltd ADR, achieved a non-GAAP EBITDA of 42 million yuan and an adjusted net profit of 39 million yuan, compared with losses in the same period a year earlier.
Revenue for the quarter rose 12.8% to 2.4 billion yuan, while gross merchandise value (GMV) climbed 18.9% to 2.9 billion yuan, the fastest pace in recent quarters. Growth was broad-based, with the ZKH platform GMV up 23%, regional SME customer GMV rising 30%, and state-owned enterprise GMV increasing more than 20%. Electrical automation customer GMV surged 160%, and first-half international GMV exceeded 95 million yuan, more than tenfold the prior-year level.
Gross profit margin improved to 14.9% of GMV from 14.8% a year earlier and 14.4% in Q1 2026. Operating expenses declined 0.8% to 425 million yuan, reducing their share of revenue to 17.4% from 19.8%. The company maintained a strong balance sheet with 1.7 billion yuan in cash, restricted cash, and short-term investments as of June 30, a current ratio of 1.84, and a debt-to-equity ratio of 0.14.
Looking ahead, ZKH Group expects overseas business to turn profitable in the second half of 2026 and full-year fiscal profitability for 2026. The company also announced a $50 million share repurchase program, having bought back 2.49 million ADSs worth approximately $7.67 million in the quarter. Private label products now account for about 10% of GMV, with over 700 new SKUs added in the period, driving private label GMV growth of more than 25%.
Executives highlighted AI adoption as a key driver, with the AI Materials Manager serving over 8,600 customers across more than 15 state-owned enterprise cases. The company plans to launch the Linglong Huiyan industrial vision edge model in October 2026 in partnership with Intel. ZKH Group projected fiscal 2026 EPS of $0.12 and reported an EPS of 0.2714 for the quarter.
Shares were indicated down 1.72% in pre-market trading at $2.85, within a 52-week range of $1.92 to $3.90. Analyst price targets range from $3.74 to $4.83, implying 29% to 66% upside based on the current share price.
