ZKH Group Ltd (ZKH) 2024 Q2 法說會逐字稿

Ladies and gentlemen, good day, and welcome to ZKH Group Limited second-quarter and fiscal year 2024 earnings conference call.

女士們、先生們，美好的一天，歡迎參加震坤行集團有限公司第二季和 2024 財年財報電話會議。

Today's conference is being recorded.

今天的會議正在錄製中。

At this time I would like to turn the conference over to Jin Li, Head of Investor Relations.

現在我想把會議交給投資人關係主管金力。

Please go ahead.

請繼續。

Thank you, operator.

謝謝你，接線生。

Thank you, everyone.

謝謝大家。

Welcome to our call today.

歡迎您今天致電我們。

Joining us today on the call are Mr. Eric Chen, our Founder, Chairman and the Chief Executive Officer; and Mr. Max Chun Chiu Lai, our Chief Financial Officer.

今天加入我們電話會議的還有我們的創辦人、董事長兼執行長 Eric Chen 先生；以及我們的財務長 Max Chun Chiu Lai 先生。

During this call, we will discuss our future performance.

在這次電話會議中，我們將討論我們未來的表現。

These are forward-looking statements made under the Safe Harbor provision of the US Private Securities Litigation Reform Act.

這些是根據美國私人證券訴訟改革法案的安全港條款做出的前瞻性陳述。

Such statements are not guarantees of future performance and are subject to certain risks and uncertainties.

此類聲明並非對未來業績的保證，並且存在一定的風險和不確定性。

Some of these risks are beyond the company's control and could cause actual results could differ materially from those mentioned in today's press release.

其中一些風險超出了公司的控制範圍，可能導致實際結果與今天新聞稿中提到的結果有重大差異。

A number of potential risks and uncertainties are included in the ZKH Group's public filings with the Securities and Exchange Commission.

震坤行集團向美國證券交易委員會提交的公開文件中包含了許多潛在的風險和不確定性。

ZKH Group does not undertake any obligation to update these forward-looking information except as required by law.

除法律要求外，震坤行集團不承擔任何更新這些前瞻性資訊的義務。

During today's call, we will also discuss certain non-GAAP financial measures for comparison purposes only, please see the press release issued earlier today for a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results.

在今天的電話會議中，我們還將討論某些非GAAP 財務指標，僅供比較之用，請參閱今天早些時候發布的新聞稿，了解非GAAP 財務指標的定義以及GAAP 與非GAAP 財務業績的調節表。

Eric and Max will show our business updates, operating highlights, and financial performance for the second quarter of 2024.

Eric 和 Max 將展示我們 2024 年第二季的業務更新、營運亮點和財務表現。

After the prepared remarks, we will have a Q&A section.

在準備好的發言之後，我們將有一個問答部分。

With that I will turn the call to Eric.

我會把電話轉給埃里克。

Eric, please go ahead.

埃里克，請繼續。

(spoken in foreign language) (interpreted) Hello, everyone, thank you for joining ZKH's second quarter 2024 earnings conference call.

（外文）（翻譯）大家好，感謝您參加震坤行2024年第二季財報電話會議。

Our exemplary teamwork and effective execution yielded strong results during this quarter.

我們模範的團隊合作和有效的執行在本季度取得了強勁的業績。

(spoken in foreign language) (interpreted) Despite the ongoing macro headwinds, we remain steadfast in our commitment to do the right things that position our business for long-term success.

（用外語發言）（翻譯）儘管宏觀經濟逆風持續存在，我們仍然堅定地致力於做正確的事情，使我們的業務取得長期成功。

We strategically stepped back from business that did not align with our sustainable competitive edge.

我們策略性地退出了不符合我們可持續競爭優勢的業務。

While this may impact our short-term growth, that's led to an improvement in the quality of our business.

雖然這可能會影響我們的短期成長，但這會提高我們的業務品質。

Importantly, even with these recent optimizations and business adjustments.

重要的是，即使最近進行了這些優化和業務調整。

We still achieved solid revenue growth, profitability increase, and significantly improved cash flow in the second quarter.

第二季度我們仍然實現了穩健的收入成長、獲利能力提高和現金流的顯著改善。

Let's delve into these.

讓我們深入研究一下這些。

(spoken in foreign language) (interpreted) Our second quarter GMV reached RMB2.75 billion, up 5.6% year-over-year.

（外語）（翻譯）第二季GMV達到人民幣27.5億元，年增5.6%。

This brought our second quarter revenue to RMB2.25 billion, up 8.5% year-over-year.

這使得我們第二季營收達到 22.5億元，年增8.5%。

(spoken in foreign language) (interpreted) Our gross profit in the second quarter increased by 14.3% year-over-year, reaching RMB380 million.

（外語）（翻譯）第二季毛利年增14.3%，達到人民幣3.8億元。

Our gross margin based on revenue increased to 17% in the second quarter, up from 16.2% in the same period last year.

第二季度，我們基於營收的毛利率從去年同期的 16.2% 增至 17%。

(spoken in foreign language) (interpreted) Driven by higher business quality effective cost control and improved efficiency, we substantially narrowed our adjusted net loss by RMB95 million to RMB34.86 million in the second quarter compared to RMB130 million in the second quarter of 2023.

（外語）（翻譯）在更高的業務品質、有效的成本控制和效率提高的推動下，我們第二季度調整後淨虧損大幅收窄人民幣9,500萬元至人民幣3,486萬元，較2023年第二季度的人民幣1.3億元大幅收窄。

Notably, the second quarter marks our ninth consecutive quarter of year-over-year improvement in our adjusted net loss margin from 6.2% in the second quarter of 2023 to 1.5% in the second quarter of 2024.

值得注意的是，第二季標誌著我們的調整後淨虧損率連續第九個季度同比改善，從 2023 年第二季的 6.2% 升至 2024 年第二季的 1.5%。

(spoken in foreign language) (interpreted) I'd like to add that despite the controls that we achieved on management cost, we did not lower our investment in product capabilities as well as our digital capabilities.

（外語發言）（翻譯）我想補充一點，儘管我們在管理成本上實現了控制，但我們並沒有減少對產品能力和數位化能力的投入。

And that is to say the improvement in profitability is not at the price of a lower investment in these core competencies.

也就是說，獲利能力的提高並不是以減少對這些核心能力的投資為代價的。

(spoken in foreign language) (interpreted) Our substantial profitability improvements coupled with optimized management of accounts receivables, accounts payable, and inventories, resulted in a net operating cash inflow of RMB120 million in the second quarter of 2024.

（外語）（口譯）獲利能力大幅提升，同時優化應收帳款、應付帳款、存貨管理，2024年第二季實現經營性現金流淨流入1.2億元。

This positive cash flow further strengthens our cash position.

這種正現金流進一步增強了我們的現金狀況。

(spoken in foreign language) (interpreted) Recently we've undertaken comprehensive discussions and initiatives with the primary goal of reaffirming our development direction and strategic objectives as well as aligning our entire team's mindset to ensure strategic consistency and effective execution.

（外語）（翻譯）近期我們進行了全面的討論和舉措，主要目的是重申我們的發展方向和戰略目標，統一整個團隊的思路，確保戰略的一致性和有效執行。

(spoken in foreign language) (interpreted) I'd like to add a few words here.

（外語）（翻譯）我想在此補充幾句話。

In terms of what I mean by our development direction and strategic objectives.

就我所說的我們的發展方向和策略目標而言。

First, we are deeply committed to the MRO industry, and we are making deep investments into product capabilities and that means that we are not just choosing products for our customers, but we are now actively engaged in the research and development of products as well as in the coordination of manufacturing.

首先，我們深耕MRO產業，我們對產品能力進行深度投入，這意味著我們不僅僅是為客戶選擇產品，而是積極致力於產品的研發以及在製造協調方面。

Secondly, we are not just covering our key account customers that now expanding our focus more to small and medium customers.

其次，我們不僅涵蓋我們的大客戶客戶，現在我們的重點更多地擴展到中小型客戶。

And we are also developing our overseas business starting with developed countries.

我們也從已開發國家開始拓展海外業務。

(spoken in foreign language) (interpreted) Thirdly, we're increasing our focus on the management of accounts receivables, inventories, and cash flows in this macro environment we believe that this management is of extreme importance.

（外語）（翻譯）第三，我們更重視應收帳款、存貨、現金流的管理，在這個宏觀環境下我們認為這個管理是極為重要的。

(spoken in foreign language) (interpreted) Our goal is to become a MRO service platform of choice for our customers globally that can create value for our customers.

（外語發言）（口譯）我們的目標是成為全球客戶首選的MRO服務平台，為客戶創造價值。

More specifically, I will explain this in three areas.

具體來說，我將從三個方面進行解釋。

(spoken in foreign language) (interpreted) In terms of our organizational structure and team capabilities, as we enter a new growth stage, focused on lean operations and advancing IT and digital capabilities.

（外語）（翻譯）從組織架構和團隊能力來看，我們進入新的成長階段，注重精益運營，提升IT和數位化能力。

We are upgrading our team capabilities and synergy, and this includes bringing together and empowering our teams for customer operations, product operations and business development, as well as enhancing the management of human resources and finance.

我們正在提升團隊能力和協同能力，包括對客戶營運、產品營運和業務發展的團隊進行整合和賦能，以及加強人力資源和財務的管理。

This means that we are creating a team with mature experience in the industry with great synergy and collaboration and with the ability to take on new tasks competently.

這意味著我們正在打造一支產業經驗豐富、協同協作能力強、能夠勝任新任務的團隊。

And this will help us lay a solid foundation for our further growth, which is going to be more healthy and more long term.

這將為我們的進一步發展奠定堅實的基礎，使我們的發展更加健康、更長期。

(spoken in foreign language) (interpreted) We aim to further increase our data assets and enhance our digital and intelligent service capabilities through product and customer operations, including improving digitalization in our internal operations.

（外語演講）（同聲傳譯）我們的目標是透過產品營運和客戶運營，包括提高內部營運的數位化水平，進一步增加我們的數據資產，增強我們的數位化和智慧化服務能力。

(spoken in foreign language) (interpreted) We aim to strengthen our business development team to attract more high-quality third party marketplace suppliers fostering both competition and synergy with our first-party product sales and private label offerings, thereby enhancing our supply competitiveness.

（以外語發言）（翻譯）我們的目標是加強我們的業務開發團隊，以吸引更多優質的第三方市場供應商，促進與我們的第一方產品銷售和自有品牌產品的競爭和協同，從而增強我們的供應競爭力。

(spoken in foreign language) (interpreted) In terms of product capabilities, we believe one of our differentiators versus our competitors is that we are moving further upstream in the supply chain as we actively engage in product R&D design and smart manufacturing to grow the research and development of our private label offerings to achieve true cost savings and high price performance.

（外語發言）（同聲傳譯）在產品能力方面，我們認為我們與競爭對手的區別之一是我們正在向供應鏈上游邁進，我們積極參與產品研發設計和智慧製造，以發展研究並開發我們的自有品牌產品，以實現真正的成本節約和高性價比。

By the end of this year, our plant in [Taichung, Jiangsu] province will be built and our MRO innovation center there will be opened.

今年年底，我們在[江蘇台中]的工廠將建成，我們的MRO創新中心也將在那裡開業。

In the second quarter of 2024 the GMV of our private label products increased by 27% year over year.

2024年第二季度，我們自有品牌產品的GMV年增27%。

Additionally, by deepening our industry and customer insights and enriching our data assets, we are well positioned to deliver curated product pools, offering industry-specific features and meeting the diverse needs of our customer segments.

此外，透過加深我們的行業和客戶洞察並豐富我們的數據資產，我們能夠提供精心策劃的產品池，提供行業特定的功能並滿足客戶群的多樣化需求。

This strategy will expedite our transition from a sales-driven to a supply-driven model, reducing our reliance on sales generated from ad hoc inquiries and requests for quotes.

這項策略將加快我們從銷售驅動模式轉向供應驅動模式的轉變，減少我們對臨時詢價和報價請求產生的銷售的依賴。

Instead, we'll focus on increasing the sales of our readily available products with a competitive advantage, particularly our private label offerings and the ZKH selection product line.

相反，我們將專注於增加具有競爭優勢的現成產品的銷量，特別是我們的自有品牌產品和 ZKH 選擇產品線。

This transition is poised to enhance customer experience and boost repeat purchases, ultimately improving our operating efficiency and expanding our gross margin.

這項轉變旨在增強客戶體驗並促進重複購買，最終提高我們的營運效率並擴大我們的毛利率。

(spoken in foreign language) (interpreted) On the sales front by enhancing customer operations and accumulating more customer related data, we aim to assess solutions that can help our customers reduce cost and improve efficiency, ultimately leading to better and more effective online customer acquisition, particularly small and medium-sized customers.

（外語發言）（翻譯）在銷售方面，我們透過加強客戶運營，累積更多客戶相關數據，評估能夠幫助客戶降低成本、提高效率的解決方案，最終實現更好、更有效的線上獲客，特別是中小型客戶。

Additionally, through our localized service organizational design, we aim to further enhance our on the ground services and accelerate our efforts to cover, engage, and onboard regional customers.

此外，透過在地化的服務組織設計，我們的目標是進一步增強我們的地面服務，並加快我們覆蓋、吸引和吸引區域客戶的努力。

At the same time, our grid based staffing strategy is designed to boost the efficiency and effectiveness of customer visits, fostering deeper customer engagement and loyalty.

同時，我們以網格為基礎的人員配置策略旨在提高客戶拜訪的效率和效果，促進更深層的客戶參與度和忠誠度。

As a result of these initiatives, we served over 48,000 customers in the second quarter of 2024 and more than 63,000 customers over the first half of this year, representing year-over-year growth of 25.8% and 32.7% respectively.

透過這些舉措，我們在 2024 年第二季為超過 48,000 名客戶提供服務，今年上半年為超過 63,000 名客戶提供服務，年比分別成長 25.8% 和 32.7%。

(spoken in foreign language) (interpreted) We are committed to becoming a leading digital platform for MRO service with a strong focus on creating value for our customers.

（外語發言）（口譯）我們致力於成為領先的 MRO 服務數位化平台，專注於為客戶創造價值。

We firmly believe that the strategies and initiatives outlined here our critical to enhancing our product supply chain capabilities, digitalization, and lean operations, all of which are key to long-term business development and growth.

我們堅信，此處概述的策略和舉措對於增強我們的產品供應鏈能力、數位化和精益營運至關重要，所有這些都是長期業務發展和成長的關鍵。

Therefore, even though we have recently optimized and adjusted certain areas of our business.

因此，儘管我們最近對某些業務領域進行了優化和調整。

And despite the challenging external environment, we are continuing to invest in our product and digital capabilities, which may have a short-term impact on the growth of revenue and profitability.

儘管外部環境充滿挑戰，我們仍在繼續投資於我們的產品和數位能力，這可能會對收入和獲利能力的成長產生短期影響。

Even despite all of this, our long-term outlook remains unchanged, and we believe that this will help us further strengthen our core competitiveness.

儘管如此，我們的長期前景仍然沒有改變，我們相信這將有助於我們進一步增強核心競爭力。

Ultimately, we are confident in our ability to achieve sustained steady growth and continuously unlock profitability over time.

最終，我們對實現持續穩定成長並隨著時間的推移不斷釋放獲利能力的能力充滿信心。

(spoken in foreign language) (interpreted) With that, I'll turn the call over to our CFO, Max Lai, to discuss our financial performance.

（用外語發言）（翻譯）接下來，我將把電話轉給我們的財務長 Max Lai，討論我們的財務表現。

Thank you.

謝謝。

Thank you, Eric, and thanks, everyone, for making time to join our earnings call today.

謝謝艾瑞克，也謝謝大家抽出時間參加我們今天的財報電話會議。

I will now provide an overview of our 2024 second quarter financial results.

我現在將概述我們 2024 年第二季的財務表現。

We are pleased with the solid performance in the second quarter, driving further profitability improvement despite macroeconomic headwinds.

我們對第二季的穩健表現感到滿意，儘管宏觀經濟不利，但仍推動獲利能力進一步改善。

In the second quarter, our GMV increased by 5.6% year-over-year to RMB2.8 billion.

第二季度，我們的GMV年增5.6%至人民幣28億元。

By platform GMV generated from ZKH platform increased by 4.4% year over year to RMB2.5 billion, and GMV generated from GBB platform grew 17.8% year over year to RMB274.7 million.

按平台分，震坤行平台GMV年增4.4%至人民幣25億元，GBB平台GMV年增17.8%至人民幣2.747億元。

The proportion of GMV generated from the marketplace model was about 20.7% in the second quarter of 2024.

2024年第二季度，市場模式產生的GMV佔比約為20.7%。

Our total revenues in the second quarter of 2024 were RMB2.25 billion, representing an increase of 8.5%, mainly due to the strong increase in customer numbers and continued growth in MRO market demand.

2024年第二季我們的總營收為人民幣22.5億元，成長8.5%，主要得益於客戶數量的強勁成長以及MRO市場需求的持續成長。

We enhanced our customer coverage and surface capabilities by automating the sales team structured to foster closer customer engagement.

我們透過自動化銷售團隊來增強我們的客戶覆蓋範圍和表面能力，以促進更緊密的客戶參與。

As a result, we had over 48,000 customers transacted on our platform in the second quarter of 2024, representing year-over-year increase of 25.8%.

因此，2024 年第二季度，我們的平台上有超過 48,000 名客戶進行交易，較去年同期成長 25.8%。

As a result of business quality improvements, gross profit in the second quarter grew by 14.3% year over year to RMB383 million, resulting in gross profit margin of 17% compared with 16.2% in the prior year period.

由於業務品質改善，第二季毛利年增14.3%至人民幣3.83億元，毛利率由去年同期的16.2%提升至17%。

The increase was driven by high plus margin of product sales 1(P) model increased from 13.7% to 15.5%, and increased take rate of marketplace 3(P) model increased from 11.4% to 12.2%, partially offset by slightly lower gross margin of GBB platform.

這一增長是由於產品銷售1(P) 模型的高利潤率從13.7% 增加至15.5%，以及市場3(P) 模型的採用率從11.4% 增加至12.2%，部分被毛利率略有下降所抵消GBB平台。

Operating expenses in the second quarter of 2024 were RMB454.2 million.

2024年第二季營運費用為人民幣4.542億元。

Operating expenses as a percentage of net revenues was 20.2% compared with 22.1% in the prior year period, demonstrating our improved operating efficiency and also effectiveness of our cost control measures.

營運費用佔淨收入的比例為 20.2%，而去年同期為 22.1%，這表明我們營運效率的提高以及成本控制措施的有效性。

Fulfillment expenses in the second quarter of 2024 were RMB99.1 million, a decrease of 7.1% from RMB106.7 million in the prior year period.

2024年第二季的履約費用為人民幣9,910萬元，較上年同期的人民幣1.067億元下降7.1%。

The decrease was primarily attributable to lower employee benefit costs and warehouse rental costs, partially offset by higher distribution expenses.

減少的主要原因是員工福利成本和倉庫租賃成本降低，但部分被分銷費用增加所抵消。

Fulfillment expenses as a percentage of net revenue were 4.4% compared with 5.1% in the prior year period.

履行費用佔淨收入的百分比為 4.4%，去年同期為 5.1%。

Sales and marketing expenses in the second quarter of 2024 were RMB157.7 million, a decrease of 6.5% from RMB168.6 million in the prior year period.

2024年第二季銷售及行銷費用為人民幣1.577億元，較去年同期的人民幣1.686億元下降6.5%。

The decrease was mainly attributable to lower travel expenses and employee benefits costs.

減少的主要原因是差旅費用和員工福利費用減少。

Sales and marketing expenses as a percentage of net revenues were 7% compared with 8.1% in the prior year period.

銷售和行銷費用佔淨收入的百分比為 7%，去年同期為 8.1%。

Research and development expenses in the second quarter were RMB38.4 million, a decrease of 16.4% from RMB46 million in the prior year period.

第二季研發費用為人民幣3,840萬元，較去年同期的人民幣4,600萬元下降16.4%。

The decrease was mainly attributable to lower employee benefit costs.

減少的主要原因是僱員福利成本下降。

Research and development costs expenses as a percentage of net revenues were 1.7% compared with 2.2% in the prior year period.

研發成本支出佔淨收入的比例為 1.7%，而去年同期為 2.2%。

General and administrative expenses in the second quarter of 2024 were RMB159 million, an increase of 16.1% from RMB136.9 million in the prior year period.

2024年第二季的一般及行政費用為人民幣1.59億元，較上年同期的人民幣1.369億元成長16.1%。

The increase was primarily attributable to higher share-based compensation expenses and partially offset by a decrease in employee benefit costs.

這一增長主要歸因於股權激勵費用的增加，並被員工福利成本的減少部分抵消。

General and administrative expenses as a percentage of net revenues were 7.1% compared to 6.6% in the prior year period.

一般及管理費用佔淨收入的百分比為 7.1%，而去年同期為 6.6%。

Our non-GAAP adjusted net loss in the second quarter of 2024 was RMB34.9 million compared with RMB129.5 million in the prior year period.

2024 年第二季度，我們的非 GAAP 調整後淨虧損為 3,490 萬元，而去年同期為 1.295 億元。

Non-GAAP adjusted net loss margin was 1.5% in the second quarter of 2024 compared with 6.2% in the prior year period, making our ninth consecutive quarter of year-over-year improvements.

2024 年第二季非 GAAP 調整後淨虧損率為 1.5%，而去年同期為 6.2%，這使我們連續第九個季度實現年比改善。

As of June 30, 2024, we had cash and cash equivalents, restricted cash and certain investments of RMB2.04 billion compared with RMB2.12 billion as of December 31, 2023.

截至2024年6月30日，我們的現金及現金等價物、限制性現金及某些投資為人民幣20.4億元，而截至2023年12月31日為人民幣21.2億元。

Net cash generated from operating activities was RMB122.1 million in the second quarter of 2024 compared with net cash used in operating activities of RMB236.2 million in the prior year period.

2024年第二季經營活動產生的現金淨額為人民幣1.221億元，而去年同期經營活動使用的現金淨額為人民幣2.362億元。

In June this year, we initiated share repurchase program under which we may repurchase up to USD50 million of ADS over a 12-month period ending in June 2025.

今年 6 月，我們啟動了股票回購計劃，根據該計劃，我們可能在截至 2025 年 6 月的 12 個月內回購最多 5,000 萬美元的美國存託股份。

The program underscores our confidence in our business growth and future value creation potential.

該計劃強調了我們對業務成長和未來價值創造潛力的信心。

Moving forward, we will continue to execute our share repurchase program from time to time on the open market at market prices, and we remain focused on sustaining growth and delivering long-term value to our all shareholders.

展望未來，我們將繼續不時在公開市場上以市場價格執行股票回購計劃，我們仍然專注於維持成長並為所有股東提供長期價值。

With that, I would now like to open the call to Q&A, and operator, please go ahead.

現在，我想開始問答通話，接線員請繼續。

Thank you.

謝謝。

(Operating Instructions) Leo Chiang, Deutsche Bank.

（操作說明）Leo Jiang，德意志銀行。

(spoken in foreign language) Thanks, management, for taking my questions.

（用外語發言）謝謝管理階層回答我的問題。

Well, (inaudible) sales down to some macro challenges and different adjustment.

好吧，（聽不清楚）銷售歸因於一些宏觀挑戰和不同的調整。

And on those I have three questions.

關於這些我有三個問題。

First question on, management gave us an update on customers standing by our industry verticals and product category in

第一個問題，管理層向我們提供了有關客戶支持我們的行業垂直和產品類別的最新信息

(inaudible)

（聽不清楚）

My second question, can management share with us the update on financing of consumer service market outlook and the competition landscape, I mean, second half of 2024, my numbers?

我的第二個問題，管理階層能否與我們分享消費服務融資市場前景和競爭格局的最新情況，我的意思是，2024年下半年，我的數據？

My third question is, could management give us an update on the sales optimization progress, it is largely comfortable with or should we expect a continuous impact in second quarter?

我的第三個問題是，管理層是否可以向我們提供有關銷售優化進展的最新信息，它基本上對此感到滿意，或者我們是否應該預期第二季度會產生持續影響？

thank you.

謝謝。

(spoken in foreign language) (interpreted) Thank you very much for your question.

（外語）（翻譯）非常感謝你的提問。

So yes, from the industry perspective, indeed, some industries we're doing really well or at least relatively stable, but some industries have been impacted by cycles.

所以，是的，從行業角度來看，確實，有些行業我們做得非常好或至少相對穩定，但有些行業受到了周期的影響。

So if you look to industries like EVs, chemicals, electric and equipment manufacturing and communications, electronics, and clearly, their procurement on our platform has been growing very strong, not because the downstream demand has grown significantly, but because these industries are growing at a pretty healthy pace and they are digitized the procurement, their migration of procurement from offline to online has been going pretty smoothly.

因此，如果你關注電動車、化學、電力和設備製造以及通訊、電子等產業，很明顯，他們在我們平台上的採購成長非常強勁，不是因為下游需求大幅成長，而是因為這些產業的成長速度非常快。

Specifically for EV, Q2 growth has been 36% year over year, for chemicals the growth of procurement was 36%, also year over year electric and equipment manufacturing 30% year over year growth, communications electronics, 29% year-over-year growth.

具體來說，電動車第二季度年增36%，化學品採購年增36%，電氣和設備製造年增30%，通訊電子年增29% 。

So for these industries borrowing, the risks of our receivables and payment collection on the growth has will usually be pretty quick.

所以對於這些借貸行業來說，我們的應收帳款和回款風險的成長通常會很快。

But on the contrary, for example, for traditional ICE vehicles, mining, steel, and coal.

但恰恰相反，例如傳統的內燃機汽車、採礦、鋼鐵和煤炭。

These industries on their procurement on the platform has been pretty flat year over year.

這些產業在平台上的採購量較去年同期持平。

Specifically for ICE cars, Q2 has been down procurement wise by 2% year over year, steel has gone down by 1% year over year.

特別是對於內燃機汽車，第二季的採購量較去年同期下降了 2%，鋼材採購量較去年同期下降了 1%。

(spoken in foreign language) (interpreted) And from the product perspective chemicals, factory automation, fasteners, grinders, and abrasives and PPEs or personal protective equipment had been growing pretty quickly year over year.

（用外語發言）（口譯）從產品角度來看，化學品、工廠自動化、緊固件、磨床、磨料和 PPE 或個人防護設備逐年增長得相當快。

Specifically for chemicals, year-over-year growth was 40%, 25% for factory automation, 26% for fasteners, 45% for grinders and abrasives, and 23% for PPE.

具體而言，化學品年增 40%，工廠自動化年增 25%，緊固件年增 26%，研磨機和磨料年增 45%，個人防護用品年增 23%。

(spoken in foreign language) (interpreted) So from the customer's perspective, GMV from SMEs has been growing very rapidly.

（外語）（翻譯）所以從顧客的角度來看，中小企業的GMV成長得非常快。

And so specifically the GBB platform that serves SMEs, it has recorded a GMV upfront, RMB270 million unlike [mom], with a year-over-year growth of 17.8%.

特別是服務中小企業的 GBB 平台，它的前期 GMV 與[媽媽]不同，為 2.7 億元人民幣，年增 17.8%。

And however, KA customers are still the key to us deeply cultivating the market and growing our market share.

但KA客戶仍是我們深耕市場、擴大市佔率的關鍵。

And in terms of the number of our customers this number grew by 32.7% in the first half this year, meaning we're covering more and more clients and customers due to our increasing product competitiveness.

而就我們的客戶數量而言，今年上半年這個數字成長了32.7%，這意味著我們由於產品競爭力的增強而涵蓋了越來越多的客戶和客戶。

(spoken in foreign language) (interpreted) So to the second question, despite the macro headwinds like you referred to, the Chinese manufacturing sector is still the largest in the world.

（外語）（口譯）那麼第二個問題，儘管有你提到的宏觀逆風，但中國製造業仍然是世界第一。

And when it comes to MRO, it is still it remains be an inelastic demand by the manufacturing sector.

就 MRO 而言，製造業的需求仍缺乏彈性。

And that's why the potential market potential for MRO is huge.

這就是為什麼MRO的潛在市場潛力巨大。

(spoken in foreign language) (interpreted) And currently, if you look at the penetration of the digitized procurement on the part of the companies, the penetration is still pretty low.

（外語）（翻譯）目前從企業的數位化採購滲透率來看，滲透率還很低。

And this trend of companies moving to online to do their procurement is only accelerating and this trend is irreversible.

企業轉向線上採購的趨勢只會加速，而且這種趨勢是不可逆轉的。

And during economic hardships, the companies will have even a stronger need to minimize their costs and maximize their proficiency or efficiency rather.

在經濟困難時期，企業將更強烈地需要最大限度地降低成本並最大限度地提高熟練程度或效率。

And that's why more and more companies are willing to adopt e-commerce as their way to procure on their items.

這就是為什麼越來越多的公司願意採用電子商務作為採購產品的方式。

(spoken in foreign language) (interpreted) And competition wise, it's getting increasingly rational.

（用外語發言）（翻譯）從競爭角度來看，它變得越來越理性。

The fierce competition in the past is now non-existent.

過去的激烈競爭現在已不復存在。

And as a leader in this space, and leaders in this space will have even more marked position and their advantages will become even more conspicuous.

而作為這個領域的領導者，這個領域的領導者的地位將會更加顯著，優勢也會更加凸顯。

And of course, competition not only exist in China.

當然，競爭不僅存在於中國。

It also exists in overseas markets, especially developed markets.

海外市場，尤其是已開發市場也存在這種情況。

And I would say that developed markets offer better opportunities for Chinese MRO.

我想說，已開發市場為中國的 MRO 提供了更好的機會。

And in this sense, our presence and foray into the US market will give us even a better edge or better leg up.

從這個意義上說，我們進入並進入美國市場將為我們帶來更好的優勢或更好的優勢。

(spoken in foreign language) (interpreted) And to answer your third question, so I would like to further explain what we mean by optimization and how we go about it.

（用外語說）（口譯）為了回答你的第三個問題，我想進一步解釋一下優化的含義以及我們如何進行優化。

So firstly, we would like to optimize business where there's a payment collection risk.

因此，首先，我們希望優化有收款風險的業務。

So we do that in order to better guard our cash flow.

所以我們這樣做是為了更好地保護我們的現金流。

So we manage that kind of business events.

所以我們管理此類商業活動。

And also when it comes to 3(P) or platform type of business and especially in cases where products are not competitive either price wise or quality wise, we're determined to optimize the go of those.

此外，當涉及 3(P) 或平台類型的業務時，特別是在產品在價格或品質方面不具競爭力的情況下，我們決心優化這些業務。

Because in the short term, even though those kinds of products will add to on our GMV in long term, we don't think they offer much value to our customers.

因為從短期來看，即使這些類型的產品從長遠來看會增加我們的 GMV，但我們認為它們不會為我們的客戶提供太多價值。

And that we believe an important way to create value for our customer is to offer a better quality and the lower cost for them.

我們相信為客戶創造價值的一個重要方法是為他們提供更好的品質和更低的成本。

(spoken in foreign language) (interpreted) So in terms of impact and the duration of it, I think, the first two quarters have been impacted and again, at the third quarter will also be impacted to some extent, then the impact will gradually start to fade away.

（外語）（翻譯）所以從影響和持續時間來看，我覺得前兩個季度是有影響的，第三季度也會有一定的影響，然後影響會逐漸的開始消失。

And because we have already replaced those products with less advantage and competitiveness with our advantage and competitive products.

因為我們已經用我們的優勢和競爭力的產品取代了那些優勢和競爭力較差的產品。

So we have effectively infused [flash of fresh blood] into the system.

所以我們有效地給系統注入了[新血]。

So we believe going forward Q4 and beyond on the quality of the business will definitely improve.

因此，我們相信第四季度及以後的業務品質肯定會有所改善。

(spoken in foreign language) (interpreted) So that was my answers to your three questions.

（外語）（口譯）這就是我對你三個問題的回答。

Thank you.

謝謝。

Colin Liu, China Renaissance

劉科林，華興資本

(spoken in foreign language) Thanks management for the opportunity.

（用外語發言）感謝管理階層提供的機會。

So I have three questions and many about outlook.

所以我有三個問題，還有很多關於前景的問題。

And the first one is about the second-half outlook.

第一個是關於下半年的展望。

So really appreciate if management can provide some guidance on top line growth, second half potential breakeven timing?

那麼，如果管理階層能夠就營收成長、下半年潛在的損益平衡時機提供一些指導，真的很感激嗎？

And what are the drivers behind the revenue growth and a breakeven or profit growth?

營收成長和損益平衡或利潤成長背後的驅動因素是什麼？

And my second question is about GBV platform and I would like to mention to provide some updates, if there are any on GBB platform outlook.

我的第二個問題是關於 GBV 平台的，如果 GBB 平台前景有任何更新，我想提一下提供一些更新。

And then my last question is about 3(P) model.

我的最後一個問題是關於 3(P) 模型的。

Well, management just explained, you know, the revenue decline -- sorry, the revenue contribution decline from 3(P) model in the quarter.

好吧，管理層剛剛解釋了，你知道，收入下降——抱歉，本季 3(P) 模型的收入貢獻下降。

And so I wanted to ask about how should we think about the revenue contributions from this model going into the next few quarters.

所以我想問我們應該如何看待這個模型在接下來幾季的營收貢獻。

Thank you very much.

非常感謝。

(spoken in foreign language) (interpreted) So in terms of the whole year growth and profitability outlook, excluding the optimized portions of our business, the rest of the business remains a growth of 15% in Q2 and July continues at this trend.

（外語）（翻譯）所以從全年的成長和獲利前景來看，除去我們業務優化的部分，其餘業務第二季還是保持15%的成長，7月份也延續了這個趨勢。

It's estimated that for the whole year, our growth will be either high single digit or low double digits.

預計全年成長要不是高個位數，就是低兩位數。

And the gross profit will continue to improve the over the whole year, growth will be 15% to 20%.

全年毛利將持續改善，成長15%至20%。

And specifically the whole year, our gross profit will be about RMB1.45 billion -- sorry, the RMB1.45 billion refers to gross profit in 2023, and we expect this year to breakeven with some slight profit.

具體來說，全年我們的毛利約為14.5億元人民幣——抱歉，14.5億元人民幣是指2023年的毛利，我們預計今年將實現盈虧平衡，略有盈利。

(spoken in foreign language) (interpreted) So second question regarding GBB growth in terms of their GMV in Q2 this year was 17.8% year over year under the existing model.

（外語發言）（翻譯）第二個問題，GBB今年第二季的GMV成長在現有模型下年增了17.8%。

And with regards to its outlook, we did a hard and thorough look at GBB, and we have made a very firm determination which is we are determined to term GBB into a truly this type of platform dedicated to serving the SMEs.

對於它的前景，我們對GBB進行了認真、徹底的審視，我們下了一個非常堅定的決心，就是我們決心把GBB打造成一個真正致力於服務中小企業的平台。

(spoken in foreign language) (interpreted) And in order to better support the growth of GBB, we wanted to become a truly technological company into that end, we have recently recruited the former head of the MRO platform on Taobao to become the head of GBB.

（外語）（翻譯）而為了更好地支援GBB的成長，我們想成為一家真正的科技公司，為此，我們最近聘請了前淘寶MRO平台的負責人，擔任GBB的負責人。

And hopefully with this person at the helm GBB can truly become a MRO platform that serves large quantities of SMEs under the backdrop of this smart era wherein.

希望在他的掌舵下，GBB能夠真正成為智慧時代背景下服務大量中小企業的MRO平台。

(spoken in foreign language) (interpreted) So when it comes to 3(P), it has to do with our international optimization that I referred to earlier.

（外語說）（翻譯）所以說到3（P），就和我剛才提到的國際優化有關。

So the 3(P) mind you the 3(P) business, we are trying to get rid of some, for example, typical trading companies that are neither original manufacturers nor formal agents of any brands.

所以3（P）請注意3（P）業務，我們正在努力擺脫一些，例如，既不是原始製造商也不是任何品牌的正式代理商的典型貿易公司。

And for those, we will eliminate gradually before 3(P) business that is original manufacturer and that can guarantee the competitiveness of their products and has quality assurance those we will keep.

而對於那些3（P）之前的企業，我們會逐步淘汰，那些是原廠的，能保證其產品的競爭力，有品質保證的企業，我們會保留。

So the decrease from 3(P) is primarily from those non-original manufacturer 3(P)s.

所以3(P)的減少主要來自那些非原廠3(P)。

And this year, the share of 3(P) for our GMV will be about 20% long term, longer term, it will be about 30%.

今年，3(P)占我們GMV的市佔率長期約為20%，長期約30%。

Colin, did that answer your questions?

科林，這回答了你的問題嗎？

Yes.

是的。

Thanks to the management, you know, that's really helpful.

感謝管理層，你知道，這真的很有幫助。

Liping Zhao, CICC.

趙麗萍，中金公司。

(spoken in foreign language) Good evening management.

（用外語發言） 各位領導者晚上好。

And thanks for taking my questions.

感謝您回答我的問題。

With notice that the gross margin saw year-over-year expansion in both first quarter and second quarter.

值得注意的是，第一季和第二季的毛利率均較去年同期成長。

What's the gross margin outlook for the whole year?

全年毛利率前景如何？

And what is the key drivers of the margin expansion?

利潤率擴張的關鍵驅動因素是什麼？

And second question, could you please give us latest updates on a company's US expansion?

第二個問題，您能否向我們介紹一家公司在美國擴張的最新情況？

Thank you.

謝謝。

(spoken in foreign language) (interpreted) Sure.

（用外語說）（翻譯）當然可以。

To your first question regarding margin, we believe that for this year, our gross margin will increase by about 1.5 percentage points.

關於你的第一個問題，關於利潤率，我們認為今年我們的毛利率將增加約1.5個百分點。

And we are confident that in the years to come, we will continue to grow our gross margin at this rate.

我們相信，在未來的幾年裡，我們的毛利率將繼續以這個速度成長。

This margin growth will be driven by three main sources.

利潤成長將由三個主要來源推動。

First, the continuous expansion of our business scale means that we have greater bargaining power with our upstream suppliers.

首先，我們業務規模的不斷擴大意味著我們與上游供應商的議價能力更強。

We will receive further support from our suppliers as we aggregate more demand, despite the fact that quantity can tends to be smaller in the MRO industry for different types of items.

儘管 MRO 行業中不同類型物品的數量往往較小，但隨著我們聚集更多需求，我們將獲得供應商的進一步支持。

We are already past that initial stage of smaller quantities.

我們已經過了小批量的初始階段。

And now we are enjoying the benefits brought by this aggregated a larger demand.

現在我們正在享受這種更大需求的聚合所帶來的好處。

And we believe that in the future this advantage will only increase.

我們相信，未來這種優勢只會越來越大。

The second margin driver comes from our efforts at integrating the upstream, which means that we are sourcing directly from manufacturers turning them into our strategic partners that will help us further reduce costs.

第二個利潤驅動因素來自我們整合上游的努力，這意味著我們直接從製造商採購，將他們變成我們的策略夥伴，這將幫助我們進一步降低成本。

The third margin driver comes from our private label offerings.

第三個利潤驅動因素來自我們的自有品牌產品。

It is now helping us to further increase our gross margin by reducing cost.

它現在正在幫助我們透過降低成本來進一步提高毛利率。

(spoken in foreign language) (interpreted) Regarding your second question on our overseas business strategy.

（外語）（翻譯）關於你提到的第二個問題，關於我們的海外經營策略。

Our strategy is very clear, is two-pronged for the developed markets such as the US and Europe.

我們的策略非常明確，是雙管齊下，針對美國和歐洲等已開發市場。

Our approach is to establish our companies, our entities locally and use a localized business approach, whereas in developing markets such as those in South East Asia, our approach is to collaborate with existing companies in the local region and establish joint ventures or create agents to facilitate local sales.

我們的方法是在當地建立我們的公司和實體，並採用本地化的業務方法，而在東南亞等發展中市場，我們的方法是與當地現有的公司合作，建立合資企業或設立代理商，以促進本地銷售。

These two different approaches is based on the level of transparency and compliance in different markets.

這兩種不同的方法是基於不同市場的透明度和合規程度。

We made this decision based on that difference.

我們根據這種差異做出了這個決定。

Specifically for the US market, we have already won our first client in the US and I believe that in the US, we will be working with two main types of customers.

特別是針對美國市場，我們已經在美國贏得了第一個客戶，我相信在美國，我們將與兩類主要客戶合作。

One is larger key account customers who will be US companies, who are already our customers in the China market, and we will be able to now continue to provide for them in their home market.

一是較大的大客戶客戶，他們將是美國公司，他們已經是我們在中國市場的客戶，我們現在將能夠繼續在他們的國內市場為他們提供服務。

The second type of customers will be small and medium enterprises.

第二類客戶是中小企業。

Our approach for warehousing and supply chain will be very asset light, meaning that we'll be using a 3(P) model, whereas we will heavily invest in our product capabilities and digital capabilities to improve our online customer acquisition and product competitiveness.

我們的倉儲和供應鏈方法將非常輕資產，這意味著我們將使用3（P）模型，而我們將大力投資我們的產品能力和數位能力，以提高我們的線上客戶獲取和產品競爭力。

I hope that answers your question.

我希望這能回答你的問題。

Yes, that's very helpful.

是的，這非常有幫助。

Thank you.

謝謝。

And that concludes the question-and-answer session.

問答環節到此結束。

I would like to turn the conference back over to management for any additional or closing comments.

我想將會議轉回管理層以徵求任何補充意見或結束意見。

Thank you, operator, and thanks, everyone, for joining us today.

謝謝運營商，也謝謝大家今天加入我們。

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.

您可以在 ir.zkh.com 上找到今天電話會議的網路廣播。如果您還有任何疑問，請隨時與我們聯繫。

Our contact information can be found in today's press release.

我們的聯絡資訊可以在今天的新聞稿中找到。

Thank you and have a great day.

謝謝您，祝您有美好的一天。

Thank you.

謝謝。

The conference has now concluded.

會議現已結束。

Thank you for attending today's presentation.

感謝您參加今天的演講。

You may now disconnect.

您現在可以斷開連線。

Portions of this transcript that are marked (interpreted) were spoken by an interpreter present on the live call.

此文字記錄中標記（翻譯）的部分是由現場通話中的口譯員說出的。

The interpreter was provided by the company sponsoring this event.

口譯員由贊助本次活動的公司提供。