SHANGHAI - ZKH Group Limited (NYSE: ZKH), a prominent MRO procurement service platform in China, revealed today that its board of directors has approved a new share repurchase program. The company is authorized to buy back up to $50 million of its American Depositary Shares over the forthcoming 12-month period, concluding on June 13, 2025.
The repurchase plan will be conducted depending on market conditions and may occur on the open market at prevailing prices, through privately negotiated transactions, block trades, or other legal methods. The company plans to finance the repurchases using its existing cash reserves.
Chairman and CEO Mr. Eric Long Chen expressed the initiative as a reflection of the firm's confidence in its business trajectory and its potential for future value creation. He affirmed ZKH's commitment to sustainable, profitable growth and its focus on enhancing shareholder value.
ZKH Group has established itself as a leader in driving digital transformation within the MRO industry in China. It aims to reduce costs and improve efficiency across the sector by leveraging its digital infrastructure. The company offers a digitalized, one-stop procurement solution, providing access to a broad selection of products at competitive prices, complemented by professional fulfillment services.
This announcement is based on a press release statement and contains forward-looking statements regarding the company's expectations, which are subject to risks and uncertainties. The actual results could vary materially due to various factors. ZKH does not take on the obligation to update any forward-looking statement as per applicable law.
InvestingPro Insights
ZKH Group Limited's recent authorization to repurchase up to $50 million in shares is a strategic move that aligns with the company's financial health and market performance. According to InvestingPro data, ZKH holds a market capitalization of $924.54 million and maintains more cash than debt on its balance sheet, providing a solid foundation to support the buyback program. Despite a challenging market, with the stock experiencing significant declines over the past week, month, and year, the company's liquidity position remains robust, with liquid assets exceeding short-term obligations.
While ZKH's price-to-earnings (P/E) ratio currently stands at -7.59, indicating that the company has been unprofitable over the last twelve months, analysts predict a return to profitability this year. Additionally, ZKH is trading at a low revenue valuation multiple, which could suggest a potential undervaluation by the market. This metric, coupled with the company's prominent position as a player in the Trading Companies & Distributors industry, may offer an attractive entry point for investors looking for growth opportunities in the sector.
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