10q10k10q10k.net
ZKH Group Ltd

ZKH Group LtdZKH決算レポート

NYSE

ZKH Group Ltd is a leading industrial supply chain service provider headquartered in China, specializing in MRO (Maintenance, Repair and Operations) products, industrial components, and digital procurement solutions. It mainly serves manufacturing, construction and energy sectors across the Asia-Pacific, delivering end-to-end inventory management and cost optimization support for enterprise clients.

What changed in ZKH Group Ltd's 20-F — 2024 vs 2025

Top changes in ZKH Group Ltd's 2025 20-F

679 paragraphs added · 695 removed · 596 edited across 4 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

270 edited+23 added−28 removed659 unchanged
ITEM 3. KEY INFORMATION Our Holding Company Structure and Risks Related to Doing Business in China ZKH Group Limited is not a Chinese operating company but a Cayman Islands holding company with operations primarily conducted through our mainland China subsidiaries.
ITEM 3. KEY INFORMATION Our Holding Company Structure and Risks Related to Doing Business in China ZKH Group Limited is not a Chinese operating company but a Cayman Islands holding company with operations primarily conducted through our Chinese mainland subsidiaries.
As a network platform operator who possesses personal information of more than one million users for purposes of the Revised Cybersecurity Review Measures, we have completed a cybersecurity review with respect to our initial public offering pursuant to the Revised Cybersecurity Review Measures.
As a network platform operator who possesses personal information of more than one million users for purposes of the Revised Cybersecurity Review Measures, we have completed a cybersecurity review with respect to our initial public offering pursuant to the Revised Cybersecurity Review Measures.
The expansion of our global and cross-border businesses will also expose us to risks inherent in operating businesses globally, including, but not limited to: ● inability to recruit international and local talent and deal with challenges in replicating or adapting our company policies and procedures to operating environments different than those of China; ● lack of acceptance of the product and service offerings on our platform; ● disruptions in the supply chain; ● investigations regarding anti-dumping; ● trade wars; ● geopolitical tensions, political instability and general economic or political conditions in particular countries or regions; ● challenges and increased expenses associated with staffing and managing global and cross-border operations and managing an organization spread over multiple jurisdictions; ● trade barriers, such as import and export restrictions, tariffs, customs duties and other taxes, competition law regimes and other trade restrictions, as well as other protectionist policies; ● differing and potentially adverse tax consequences; ● increased and conflicting regulatory compliance requirements; 32 Table of Contents ● increased risks of being involved in legal disputes and labor disputes; ● adaption to different industry practices; ● challenges caused by distance, language and cultural differences; ● the impact of pandemic diseases or natural disasters; ● increased costs to protect the security and stability of our information technology systems, intellectual property and personal data, including compliance costs related to data localization laws; ● availability and reliability of global and cross-border payment systems and logistics infrastructure; and ● exchange rate fluctuations.
The expansion of our global and cross-border businesses will also expose us to risks inherent in operating businesses globally, including, but not limited to: ● inability to recruit international and local talent and deal with challenges in replicating or adapting our company policies and procedures to operating environments different than those of China; ● lack of acceptance of the product and service offerings on our platform; ● disruptions in the supply chain; ● investigations regarding anti-dumping; 32 Table of Contents ● trade wars; ● geopolitical tensions, political instability and general economic or political conditions in particular countries or regions; ● challenges and increased expenses associated with staffing and managing global and cross-border operations and managing an organization spread over multiple jurisdictions; ● trade barriers, such as import and export restrictions, tariffs, customs duties and other taxes, competition law regimes and other trade restrictions, as well as other protectionist policies; ● differing and potentially adverse tax consequences; ● increased and conflicting regulatory compliance requirements; ● increased risks of being involved in legal disputes and labor disputes; ● adaption to different industry practices; ● challenges caused by distance, language and cultural differences; ● the impact of pandemic diseases or natural disasters; ● increased costs to protect the security and stability of our information technology systems, intellectual property and personal data, including compliance costs related to data localization laws; ● availability and reliability of global and cross-border payment systems and logistics infrastructure; and ● exchange rate fluctuations.
On February 17, 2023, the CSRC issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Enterprises, which became effective on March 31, 2023, and five supporting guidelines on CSRC’s official website.
On February 17, 2023, the CSRC issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Enterprises, which became effective on March 31, 2023, and five supporting guidelines on CSRC’s official website.
The CSRC or other PRC regulatory authorities also may take actions requiring us, or making it advisable for us, to halt our offerings before settlement and delivery of the shares offered.
The CSRC or other PRC regulatory authorities also may take actions requiring us, or making it advisable for us, to halt our offerings before settlement and delivery of the shares offered.
Consequently, if investors engage in market trading or other activities in anticipation of and prior to settlement and delivery, they do so at the risk that settlement and delivery may not occur.
Consequently, if investors engage in market trading or other activities in anticipation of and prior to settlement and delivery, they do so at the risk that settlement and delivery may not occur.
In addition, if the CSRC or other regulatory authorities later promulgate new rules or explanations requiring that we obtain their approvals or accomplish the required filing or other regulatory procedures for our initial public offering, we may be unable to obtain a waiver of such approval requirements, if and when procedures are established to obtain such a waiver.
In addition, if the CSRC or other regulatory authorities later promulgate new rules or explanations requiring that we obtain their approvals or accomplish the required filing or other regulatory procedures for our initial public offering, we may be unable to obtain a waiver of such approval requirements, if and when procedures are established to obtain such a waiver.
As of the date of this annual report, the PCAOB has not issued any new determination that it is unable to inspect or investigate completely registered public accounting firms headquartered in any jurisdiction. For this reason, we do not expect to be identified as a Commission-Identified Issuer under the HFCAA after we file this annual report on Form 20-F.
As of the date of this annual report, the PCAOB has not issued any new determination that it is unable to inspect or investigate completely registered public accounting firms headquartered in any jurisdiction. For this reason, we do not expect to be identified as a Commission-Identified Issuer under the HFCAA after we file this annual report on Form 20-F.
On December 29, 2022, the Consolidated Appropriations Act, 2023, was signed into law, which amended the HFCAA (i) to reduce the number of consecutive non-inspection years required for triggering the prohibitions under the HFCAA from three years to two, and (ii) so that any foreign jurisdiction could be the reason why the PCAOB does not have complete access to inspect or investigate a company’s auditor.
On December 29, 2022, the Consolidated Appropriations Act, 2023, was signed into law, which amended the HFCAA (i) to reduce the number of consecutive non-inspection years required for triggering the prohibitions under the HFCAA from three years to two, and (ii) so that any foreign jurisdiction could be the reason why the PCAOB does not have complete access to inspect or investigate a company’s auditor.
As it was originally enacted, the HFCAA applied only if the PCAOB’s inability to inspect or investigate was due to a position taken by an authority in the foreign jurisdiction where the relevant public accounting firm is located.
As it was originally enacted, the HFCAA applied only if the PCAOB’s inability to inspect or investigate was due to a position taken by an authority in the foreign jurisdiction where the relevant public accounting firm is located.
You are not able to directly exercise your right to vote with respect to the underlying shares unless you withdraw the Class A ordinary shares and become the registered holder of such Class A ordinary shares prior to the record date for the general meeting.
You are not able to directly exercise your right to vote with respect to the underlying Class A ordinary shares unless you withdraw the Class A ordinary shares and become the registered holder of such Class A ordinary shares prior to the record date for the general meeting.
Risk Factors—Risks Related to Doing Business in China—Uncertainties exist with respect to how the PRC Foreign Investment Law may impact the viability of our current corporate structure and operations.” Unless otherwise indicated or the context otherwise requires, references in this annual report to “ZKH” are to ZKH Group Limited, our Cayman Islands holding company; “ZKH Industrial Supply” are to ZKH Industrial Supply (Shanghai) Co., Ltd., the wholly foreign owned subsidiary of ZKH Group Limited in mainland China; “we,” “us,” “our company,” and “our” are to ZKH Group Limited and its subsidiaries, including ZKH Industrial Supply and its subsidiaries; “our mainland China subsidiaries” are to ZKH Industrial Supply and its subsidiaries, including, but not limited to, Shanghai Gongbangbang Industrial Tech Co., Ltd., Shanghai Kunhe Supply Chain Management Co., Ltd. and Shenzhen Kuntong Smart Warehousing Technology Co., Ltd.
Risk Factors—Risks Related to Doing Business in China—Uncertainties exist with respect to how the PRC Foreign Investment Law may impact the viability of our current corporate structure and operations.” Unless otherwise indicated or the context otherwise requires, references in this annual report to “ZKH” are to ZKH Group Limited, our Cayman Islands holding company; “ZKH Industrial Supply” are to ZKH Industrial Supply (Shanghai) Co., Ltd., the wholly foreign owned subsidiary of ZKH Group Limited in Chinese mainland; “we,” “us,” “our company,” and “our” are to ZKH Group Limited and its subsidiaries, including ZKH Industrial Supply and its subsidiaries; “our Chinese mainland subsidiaries” are to ZKH Industrial Supply and its subsidiaries, including, but not limited to, Shanghai Gongbangbang Industrial Tech Co., Ltd., Shanghai Kunhe Supply Chain Management Co., Ltd. and Shenzhen Kuntong Smart Warehousing Technology Co., Ltd.
Risk Factors—Risks Related to Doing Business in China—PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from making loans or additional capital contributions to our mainland China subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business.” Permissions Required from the PRC Government Authorities for Overseas Securities Offering We have completed the cybersecurity review by the Cyberspace Administration of China for our initial public offering in the United States and listing of our ADSs on the New York Stock Exchange, or the NYSE.
Risk Factors—Risks Related to Doing Business in China—PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from making loans or additional capital contributions to our Chinese mainland subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business.” Permissions Required from the PRC Government Authorities for Overseas Securities Offering We have completed the cybersecurity review by the Cyberspace Administration of China for our initial public offering in the United States and listing of our ADSs on the New York Stock Exchange, or the NYSE.
If we fail to obtain the necessary approval or complete the filings and other regulatory procedures in a timely manner, we may face sanctions by the CSRC or other PRC regulatory agencies, which may include fines and penalties on our operations in mainland China, limitations on our operating privileges in China, restrictions on or prohibition of the payments or remittance of dividends by our mainland China subsidiaries, delay of or restriction on the repatriation of the proceeds from our initial public offering into mainland China, or other actions that could have a material and adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our ADSs.
If we fail to obtain the necessary approval or complete the filings and other regulatory procedures in a timely manner, we may face sanctions by the CSRC or other PRC regulatory agencies, which may include fines and penalties on our operations in Chinese mainland, limitations on our operating privileges in China, restrictions on or prohibition of the payments or remittance of dividends by our Chinese mainland subsidiaries, delay of or restriction on the repatriation of the proceeds from our initial public offering into Chinese mainland, or other actions that could have a material and adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our ADSs.
It is not clear under the PRC Data Security Law what constitutes “important data” or “state critical data.” If we are deemed to collect “important data” or “state critical data,” we may need to adopt internal reforms in order to comply with the PRC Data Security Law. 19 Table of Contents Pursuant to the Administrative Provisions on Security Vulnerabilities in Network Products jointly issued by the Ministry of Industry and Information Technology, the Cyberspace Administration of China and the Ministry of Public Security on July 12, 2021, all providers of network products and network operators within mainland China must take measures to verify, assess, and repair network vulnerabilities.
It is not clear under the PRC Data Security Law what constitutes “important data” or “state critical data.” If we are deemed to collect “important data” or “state critical data,” we may need to adopt internal reforms in order to comply with the PRC Data Security Law. 19 Table of Contents Pursuant to the Administrative Provisions on Security Vulnerabilities in Network Products jointly issued by the Ministry of Industry and Information Technology, the Cyberspace Administration of China and the Ministry of Public Security on July 12, 2021, all providers of network products and network operators within Chinese mainland must take measures to verify, assess, and repair network vulnerabilities.
Risk Factors—Risks Related to Doing Business in China—We may rely on dividends and other distributions on equity paid by our PRC subsidiaries in mainland China to fund any cash and financing requirements we may have, and any limitation on the ability of our mainland China subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.” For the Cayman Islands, mainland China and United States federal income tax considerations in connection with an investment in the ADSs, see “Item 10.
Risk Factors—Risks Related to Doing Business in China—We may rely on dividends and other distributions on equity paid by our PRC subsidiaries in Chinese mainland to fund any cash and financing requirements we may have, and any limitation on the ability of our Chinese mainland subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.” For the Cayman Islands, Chinese mainland and United States federal income tax considerations in connection with an investment in the ADSs, see “Item 10.
For a detailed description of the underlying risks, see “—Risks Related to Doing Business in China—PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from making loans or additional capital contributions to our mainland China subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business” on page 55 in this annual report.
For a detailed description of the underlying risks, see “—Risks Related to Doing Business in China—PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from making loans or additional capital contributions to our Chinese mainland subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business” on page 55 in this annual report.
If we fail to obtain the approval or complete the filings and other regulatory procedures, we may face sanctions by the CSRC or other PRC regulatory agencies, which may include fines and penalties on our operations in mainland China, limitations on our operating privileges in China, restrictions on or prohibition of the payments or remittance of dividends by our mainland China subsidiaries, or other actions that could have a material and adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our ADSs.
If we fail to obtain the approval or complete the filings and other regulatory procedures, we may face sanctions by the CSRC or other PRC regulatory agencies, which may include fines and penalties on our operations in Chinese mainland, limitations on our operating privileges in China, restrictions on or prohibition of the payments or remittance of dividends by our Chinese mainland subsidiaries, or other actions that could have a material and adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our ADSs.
These risks and challenges include our ability to, among other things: ● expand or optimize the product mix, sustain and improve the quality of MRO products and fulfillment solutions on our platform and provide a satisfying customer experience; ● maintain and enhance our relationship and business collaboration with suppliers, distributors, and warehousing and logistics service providers; ● attract new customers, retain existing customers and increase their spending on our platform; ● expand our prospective customer base further to include customers from overseas markets; ● develop and upgrade our SaaS-based offerings and intelligent services; ● enhance our technology infrastructure to support the growth of our business and maintain the security of our system; ● navigate the complex and evolving regulatory environment in mainland China, and geopolitical tensions in overseas markets; ● withstand fluctuations in the supply and demand and prices of MRO products and related raw materials; ● manage our strategic investments and alliances; ● respond to macroeconomic conditions and fluctuations; and ● defend ourselves against legal and regulatory actions, such as actions involving intellectual property.
These risks and challenges include our ability to, among other things: ● expand or optimize the product mix, sustain and improve the quality of MRO products and fulfillment solutions on our platform and provide a satisfying customer experience; ● maintain and enhance our relationship and business collaboration with suppliers, distributors, and warehousing and logistics service providers; ● attract new customers, retain existing customers and increase their spending on our platform; ● expand our prospective customer base further to include customers from overseas markets; ● develop and upgrade our SaaS-based offerings and intelligent services; ● enhance our technology infrastructure to support the growth of our business and maintain the security of our system; ● navigate the complex and evolving regulatory environment in Chinese mainland, and geopolitical tensions in overseas markets; ● withstand fluctuations in the supply and demand and prices of MRO products and related raw materials; ● manage our strategic investments and alliances; ● respond to macroeconomic conditions and fluctuations; and ● defend ourselves against legal and regulatory actions, such as actions involving intellectual property.
In addition, the PRC Enterprise Income Tax Law and its implementation rules provide that a withholding tax rate of up to 10% will be applicable to dividends payable by Chinese companies to non-PRC resident enterprises unless otherwise exempted or reduced according to treaties or arrangements between the mainland China central government and governments of other countries or regions where the non-PRC resident enterprises are incorporated.
In addition, the PRC Enterprise Income Tax Law and its implementation rules provide that a withholding tax rate of up to 10% will be applicable to dividends payable by Chinese companies to non-PRC resident enterprises unless otherwise exempted or reduced according to treaties or arrangements between the Chinese mainland central government and governments of other countries or regions where the non-PRC resident enterprises are incorporated.
According to Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be regarded as a PRC tax resident by virtue of having its “de facto management body” in China and will be subject to PRC enterprise income tax on its global income only if all of the following conditions are met: (i) the primary location of the day-to-day operational management is in the PRC; (ii) decisions relating to the enterprise’s financial and human resource matters are made or are subject to approval by organizations or personnel in the PRC; (iii) the enterprise’s primary assets, accounting books and records, company seals, and board and shareholder resolutions, are located or maintained in the PRC; and (iv) at least 50% of voting board members or senior executives habitually reside in the PRC. 49 Table of Contents We believe none of our entities outside of mainland China is a PRC resident enterprise for PRC tax purposes.
According to Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be regarded as a PRC tax resident by virtue of having its “de facto management body” in China and will be subject to PRC enterprise income tax on its global income only if all of the following conditions are met: (i) the primary location of the day-to-day operational management is in the PRC; (ii) decisions relating to the enterprise’s financial and human resource matters are made or are subject to approval by organizations or personnel in the PRC; (iii) the enterprise’s primary assets, accounting books and records, company seals, and board and shareholder resolutions, are located or maintained in the PRC; and (iv) at least 50% of voting board members or senior executives habitually reside in the PRC. 50 Table of Contents We believe none of our entities outside of Chinese mainland is a PRC resident enterprise for PRC tax purposes.
For a detailed description of the underlying risks, see “—Risks Related to Doing Business in China—Uncertainties with respect to the PRC legal system could adversely affect us” on page 43 in this annual report. ● We conduct our business primarily through our mainland China subsidiaries. Our operations in mainland China are governed by laws and regulations in mainland China.
For a detailed description of the underlying risks, see “—Risks Related to Doing Business in China—Uncertainties with respect to the PRC legal system could adversely affect us” on page 43 in this annual report. ● We conduct our business primarily through our Chinese mainland subsidiaries. Our operations in Chinese mainland are governed by laws and regulations in Chinese mainland.
Key Information—D. Risk Factors—Risks Related to Doing Business in China,” the laws, regulations and the discretion of PRC governmental authorities discussed in this annual report are expected to apply to PRC entities and businesses, rather than entities or businesses in Hong Kong, which operate under a different set of laws from mainland China.
Key Information—D. Risk Factors—Risks Related to Doing Business in China,” the laws, regulations and the discretion of PRC governmental authorities discussed in this annual report are expected to apply to PRC entities and businesses, rather than entities or businesses in Hong Kong, which operate under a different set of laws from Chinese mainland.
In addition to market and industry factors, the price and trading volume for our ADSs may be highly volatile for factors specific to our own operations, including the following: ● variations in our revenues, earnings and cash flow; ● announcements of new investments, acquisitions, strategic partnerships or joint ventures by us or our competitors; ● announcements of new services and expansions by us or our competitors; 57 Table of Contents ● changes in financial estimates by securities analysts; ● detrimental adverse publicity about us, our services or our industry; ● additions or departures of key personnel; ● release of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities; ● trends in the global economy in general and China’s economy in particular; ● rising international geopolitical tensions; and ● potential litigation or regulatory investigations.
In addition to market and industry factors, the price and trading volume for our ADSs may be highly volatile for factors specific to our own operations, including the following: ● variations in our revenues, earnings and cash flow; ● announcements of new investments, acquisitions, strategic partnerships or joint ventures by us or our competitors; ● announcements of new services and expansions by us or our competitors; 58 Table of Contents ● changes in financial estimates by securities analysts; ● detrimental adverse publicity about us, our services or our industry; ● additions or departures of key personnel; ● release of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities; ● trends in the global economy in general and China’s economy in particular; ● rising international geopolitical tensions; and ● potential litigation or regulatory investigations.
Under these circulars, our employees working in China who exercise share options and/or are granted restricted shares will be subject to PRC individual income tax. Our mainland China subsidiaries have obligations to file documents related to employee share options and/or restricted shares with tax authorities and to withhold individual income taxes of those employees who exercise their share options.
Under these circulars, our employees working in China who exercise share options and/or are granted restricted shares will be subject to PRC individual income tax. Our Chinese mainland subsidiaries have obligations to file documents related to employee share options and/or restricted shares with tax authorities and to withhold individual income taxes of those employees who exercise their share options.
Risks Related to Doing Business in China Uncertainties exist with respect to how the PRC Foreign Investment Law may impact the viability of our current corporate structure and operations. Laws regulating foreign investment in mainland China include the PRC Foreign Investment Law and the Regulation on Implementing the PRC Foreign Investment Law, both effective from January 1, 2020.
Risks Related to Doing Business in China Uncertainties exist with respect to how the PRC Foreign Investment Law may impact the viability of our current corporate structure and operations. Laws regulating foreign investment in Chinese mainland include the PRC Foreign Investment Law and the Regulation on Implementing the PRC Foreign Investment Law, both effective from January 1, 2020.
According to the Circular of the State Administration of Foreign Exchange on Issuing the Regulations on Foreign Exchange Administration of the Overseas Direct Investment of Domestic Institutions, which was promulgated by SAFE on July 13, 2009 and became effective on August 1, 2009, PRC enterprises must register for overseas direct investment with a local SAFE branch. 53 Table of Contents We may not be fully informed of the identities of all of our shareholders or beneficial owners who are PRC entities, and we cannot provide any assurance that all of our shareholders and beneficial owners who are PRC entities will comply with our request to complete the overseas direct investment procedures under the aforementioned regulations or other related rules in a timely manner, or at all.
According to the Circular of the State Administration of Foreign Exchange on Issuing the Regulations on Foreign Exchange Administration of the Overseas Direct Investment of Domestic Institutions, which was promulgated by SAFE on July 13, 2009 and became effective on August 1, 2009, PRC enterprises must register for overseas direct investment with a local SAFE branch. 54 Table of Contents We may not be fully informed of the identities of all of our shareholders or beneficial owners who are PRC entities, and we cannot provide any assurance that all of our shareholders and beneficial owners who are PRC entities will comply with our request to complete the overseas direct investment procedures under the aforementioned regulations or other related rules in a timely manner, or at all.
The delisting of the ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment. ● We may rely on dividends and other distributions on equity paid by our mainland China subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our mainland China subsidiaries to transfer cash or make payments to us could have a material and adverse effect on our ability to conduct our business. ● To the extent cash or assets in the business is in mainland China or a PRC entity, the funds and assets may not be available to fund operations or for other use outside of mainland China due to interventions in or the imposition of restrictions and limitations on the ability of ZKH or its subsidiaries by the PRC government to transfer cash or assets.
The delisting of the ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment. ● We may rely on dividends and other distributions on equity paid by our Chinese mainland subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our Chinese mainland subsidiaries to transfer cash or make payments to us could have a material and adverse effect on our ability to conduct our business. ● To the extent cash or assets in the business is in Chinese mainland or a PRC entity, the funds and assets may not be available to fund operations or for other use outside of Chinese mainland due to interventions in or the imposition of restrictions and limitations on the ability of ZKH or its subsidiaries by the PRC government to transfer cash or assets.
The CSRC has concluded the filing procedure and published the filing results on the CSRC website on November 3, 2023. 8 Table of Contents However, any future securities offerings and listings outside of mainland China by our company, including, but not limited to, follow on offerings, secondary listings and going-private transactions, will be subject to the filing requirements with the CSRC under the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Enterprises and the supporting guidelines, and we cannot assure you that we will be able to comply with such filing requirements in a timely manner, or at all.
The CSRC has concluded the filing procedure and published the filing results on the CSRC website on November 3, 2023. 8 Table of Contents However, any future securities offerings and listings outside of Chinese mainland by our company, including, but not limited to, follow on offerings, secondary listings and going-private transactions, will be subject to the filing requirements with the CSRC under the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Enterprises and the supporting guidelines, and we cannot assure you that we will be able to comply with such filing requirements in a timely manner, or at all.
These interruptions or failures may be due to the third-party service providers’ failure to obtain and maintain requisite licenses or permits for storage and transportation of hazardous products in China or failure to comply with laws and regulations in mainland China governing the storage and transportation of hazardous chemicals.
These interruptions or failures may be due to the third-party service providers’ failure to obtain and maintain requisite licenses or permits for storage and transportation of hazardous products in China or failure to comply with laws and regulations in Chinese mainland governing the storage and transportation of hazardous chemicals.
However, the tax resident status of an enterprise is subject to determination by the tax authorities of mainland China and uncertainties remain with respect to the interpretation of the term “de facto management body.” If the tax authorities of mainland China determine that we are a PRC resident enterprise for enterprise income tax purposes, we could be subject to a uniform tax rate of 25% on our worldwide income, which could materially reduce our net income, and we may be required to withhold a 10% withholding tax from dividends we pay to our shareholders (including our ADS holders) that are non-resident enterprises, subject to any reduction set forth in applicable tax treaties.
However, the tax resident status of an enterprise is subject to determination by the tax authorities of Chinese mainland and uncertainties remain with respect to the interpretation of the term “de facto management body.” If the tax authorities of Chinese mainland determine that we are a PRC resident enterprise for enterprise income tax purposes, we could be subject to a uniform tax rate of 25% on our worldwide income, which could materially reduce our net income, and we may be required to withhold a 10% withholding tax from dividends we pay to our shareholders (including our ADS holders) that are non-resident enterprises, subject to any reduction set forth in applicable tax treaties.
Discontinuation of any preferential tax treatments or imposition of any additional taxes could adversely affect our financial condition and results of operations. The Chinese government has provided tax incentives to our mainland China subsidiaries, primarily in the form of reduced enterprise income tax rates.
Discontinuation of any preferential tax treatments or imposition of any additional taxes could adversely affect our financial condition and results of operations. The Chinese government has provided tax incentives to our Chinese mainland subsidiaries, primarily in the form of reduced enterprise income tax rates.
Violations of SAFE Circular 19 and SAFE Circular 16 could result in administrative penalties. SAFE Circular 19 and SAFE Circular 16 may significantly limit our ability to transfer any foreign currency we hold to our mainland China subsidiaries, which may adversely affect our liquidity and our ability to fund and expand our business in China.
Violations of SAFE Circular 19 and SAFE Circular 16 could result in administrative penalties. SAFE Circular 19 and SAFE Circular 16 may significantly limit our ability to transfer any foreign currency we hold to our Chinese mainland subsidiaries, which may adversely affect our liquidity and our ability to fund and expand our business in China.
If we are unable to do so, in a timely manner or otherwise, we may become subject to sanctions imposed by the PRC regulatory authorities, which could include fines, penalties, and proceedings against us, and other forms of sanctions, and our ability to conduct our business, invest in mainland China as foreign investments or accept foreign investments, or list on a U.S. or other overseas exchange may be restricted, and our business, reputation, financial condition, and results of operations may be materially and adversely affected, and the value of our ADSs could significantly decline or become worthless.
If we are unable to do so, in a timely manner or otherwise, we may become subject to sanctions imposed by the PRC regulatory authorities, which could include fines, penalties, and proceedings against us, and other forms of sanctions, and our ability to conduct our business, invest in Chinese mainland as foreign investments or accept foreign investments, or list on a U.S. or other overseas exchange may be restricted, and our business, reputation, financial condition, and results of operations may be materially and adversely affected, and the value of our ADSs could significantly decline or become worthless.
For purposes of illustration, the following discussion reflects the hypothetical taxes that might be required to be paid in mainland China and Hong Kong, assuming that: (i) we have taxable earnings, and (ii) we determine to pay a dividend in the future: ​ ​ ​ ​ ​ Tax calculation (1) Hypothetical pre-tax earnings 100 % Tax on earnings at statutory rate of 25% (2) (25) % Net earnings available for distribution 75 % Withholding tax at standard rate of 10% (3) (7.5) % Net distribution to Parent/Shareholders 67.5 % Notes: (1) For purposes of this example, the tax calculation has been simplified.
For purposes of illustration, the following discussion reflects the hypothetical taxes that might be required to be paid in Chinese mainland and Hong Kong, assuming that: (i) we have taxable earnings, and (ii) we determine to pay a dividend in the future: ​ ​ ​ ​ ​ ​ ​ ​ Tax calculation (1) Hypothetical pre-tax earnings 100 % Tax on earnings at statutory rate of 25% (2) (25) % Net earnings available for distribution 75 % Withholding tax at standard rate of 10% (3) (7.5) % Net distribution to Parent/Shareholders 67.5 % Notes: (1) For purposes of this example, the tax calculation has been simplified.
If authorities in the PRC or another foreign jurisdiction were to take a position at any time in the future that would prevent the PCAOB from continuing to inspect or investigate completely registered public accounting firms headquartered in mainland China or Hong Kong, and if such lack of inspection were to extend for the requisite period of time under the HFCAA, our securities will be prohibited from being traded on U.S. markets and an exchange may determine to delist our securities.
If authorities in the PRC or another foreign jurisdiction were to take a position at any time in the future that would prevent the PCAOB from continuing to inspect or investigate completely registered public accounting firms headquartered in Chinese mainland or Hong Kong, and if such lack of inspection were to extend for the requisite period of time under the HFCAA, our securities will be prohibited from being traded on U.S. markets and an exchange may determine to delist our securities.
In addition, pursuant to the Arrangement Between Mainland China and Hong Kong Special Administrative Region for the Avoidance of Double Taxation on Income, if a Hong Kong resident enterprise owns more than 25% of the equity interest of a mainland China company at all times during the twelve-month period immediately prior to obtaining a dividend from such company, the 10% withholding tax on the dividend is reduced to 5%; provided that certain other conditions and requirements are satisfied at the discretion of the PRC tax authority.
In addition, pursuant to the Arrangement Between Chinese mainland and Hong Kong Special Administrative Region for the Avoidance of Double Taxation on Income, if a Hong Kong resident enterprise owns more than 25% of the equity interest of a Chinese mainland company at all times during the twelve-month period immediately prior to obtaining a dividend from such company, the 10% withholding tax on the dividend is reduced to 5%; provided that certain other conditions and requirements are satisfied at the discretion of the PRC tax authority.
If authorities in the mainland China or another foreign jurisdiction were to take a position at any time in the future that would prevent the PCAOB from continuing to inspect or investigate completely registered public accounting firms headquartered in mainland China or Hong Kong, and if such lack of inspection were to extend for the requisite period of time under the HFCAA, our securities will be prohibited from being traded on U.S. markets and an exchange may determine to delist our securities.
If authorities in the Chinese mainland or another foreign jurisdiction were to take a position at any time in the future that would prevent the PCAOB from continuing to inspect or investigate completely registered public accounting firms headquartered in Chinese mainland or Hong Kong, and if such lack of inspection were to extend for the requisite period of time under the HFCAA, our securities will be prohibited from being traded on U.S. markets and an exchange may determine to delist our securities.
Operators in violation of the PRC Anti-unfair Competition Law may be subject to civil, administrative or criminal liabilities depending on the specific circumstances. 47 Table of Contents In March 2018, the State Administration for Market Regulation was formed as a new governmental agency to take over, among other things, the anti-monopoly enforcement functions from the relevant departments under the Ministry of Commerce, the National Development and Reform Commission, and the former State Administration for Industry and Commerce, respectively.
Operators in violation of the PRC Anti-unfair Competition Law may be subject to civil, administrative or criminal liabilities depending on the specific circumstances. 48 Table of Contents In March 2018, the State Administration for Market Regulation was formed as a new governmental agency to take over, among other things, the anti-monopoly enforcement functions from the relevant departments under the Ministry of Commerce, the National Development and Reform Commission, and the former State Administration for Industry and Commerce, respectively.
If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong and we continue to use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year.
If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in Chinese mainland and Hong Kong and we continue to use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year.
Moreover, failure to comply with the various foreign exchange registration requirements described above could result in liability under the PRC laws for evasion of applicable foreign exchange restrictions, including (i) the requirement by SAFE to return the foreign exchange remitted overseas or into mainland China within a period of time specified by SAFE, with a fine of up to 30% of the total amount of foreign exchange remitted overseas or into mainland China and deemed to have been evasive or illegal and (ii) in circumstances involving serious violations, a fine of no less than 30% of and up to the total amount of remitted foreign exchange deemed evasive or illegal.
Moreover, failure to comply with the various foreign exchange registration requirements described above could result in liability under the PRC laws for evasion of applicable foreign exchange restrictions, including (i) the requirement by SAFE to return the foreign exchange remitted overseas or into Chinese mainland within a period of time specified by SAFE, with a fine of up to 30% of the total amount of foreign exchange remitted overseas or into Chinese mainland and deemed to have been evasive or illegal and (ii) in circumstances involving serious violations, a fine of no less than 30% of and up to the total amount of remitted foreign exchange deemed evasive or illegal.
Because we are a foreign private issuer under the Securities Exchange Act of 1934, as amended, or the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including: ● the rules under the Exchange Act requiring the filing of quarterly reports on Form 10-Q or current reports on Form 8-K with the SEC; ● the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; 61 Table of Contents ● the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; ● the selective disclosure rules by issuers of material nonpublic information under Regulation FD; and ● certain audit committee independence requirements in Rule 10A-3 of the Exchange Act.
Because we are a foreign private issuer under the Securities Exchange Act of 1934, as amended, or the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including: ● the rules under the Exchange Act requiring the filing of quarterly reports on Form 10-Q or current reports on Form 8-K with the SEC; ● the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; ● the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; ● the selective disclosure rules by issuers of material nonpublic information under Regulation FD; and ● certain audit committee independence requirements in Rule 10A-3 of the Exchange Act.
If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong and we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year.
If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in Chinese mainland and Hong Kong and we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year.
Therefore, we believe we have received all requisite permissions from and completed all filings with Chinese authorities in connection with our initial public offering explicitly required under current laws, regulations and rules in mainland China.
Therefore, we believe we have received all requisite permissions from and completed all filings with Chinese authorities in connection with our initial public offering explicitly required under current laws, regulations and rules in Chinese mainland.
Any failure to obtain or delay in obtaining CSRC approval for our initial public offering, or a rescission of such CSRC approval if we obtained, would subject us to sanctions imposed by the CSRC and other PRC regulatory agencies, which could include fines and penalties on our operations in mainland China, restrictions or limitations on our ability to pay dividends outside of mainland China, and other forms of sanctions that may materially and adversely affect our business, financial condition and results of operations.
Any failure to obtain or delay in obtaining CSRC approval for our initial public offering, or a rescission of such CSRC approval if we obtained, would subject us to sanctions imposed by the CSRC and other PRC regulatory agencies, which could include fines and penalties on our operations in Chinese mainland, restrictions or limitations on our ability to pay dividends outside of Chinese mainland, and other forms of sanctions that may materially and adversely affect our business, financial condition and results of operations.
However, given (i) the uncertainties of interpretation and implementation of the laws and regulations and the enforcement practice by the government authorities, (ii) the PRC government has significant oversight and discretion over the conduct of our business, and (iii) the rapid evolvement of laws, regulations and rules in mainland China which may be preceded with short advance notice, we may be required to obtain additional licenses, permits, registrations or approvals or complete additional filings for our initial public offering.
However, given (i) the uncertainties of interpretation and implementation of the laws and regulations and the enforcement practice by the government authorities, (ii) the PRC government has significant oversight and discretion over the conduct of our business, and (iii) the rapid evolvement of laws, regulations and rules in Chinese mainland which may be preceded with short advance notice, we may be required to obtain additional licenses, permits, registrations or approvals or complete additional filings for our initial public offering.
On October 25, 2019, SAFE promulgated the Notice for Further Advancing the Facilitation of Cross-border Trade and Investment, or SAFE Circular 28, which, among other things, allows all foreign-invested companies to use Renminbi converted from foreign currency-denominated capital for equity investments in mainland China, as long as the equity investment is genuine, does not violate applicable laws, and complies with the negative list on foreign investment.
On October 25, 2019, SAFE promulgated the Notice for Further Advancing the Facilitation of Cross-border Trade and Investment, or SAFE Circular 28, which, among other things, allows all foreign-invested companies to use Renminbi converted from foreign currency-denominated capital for equity investments in Chinese mainland, as long as the equity investment is genuine, does not violate applicable laws, and complies with the negative list on foreign investment.
Any such misconduct by our collection personnel or the perception that our collection practices are considered to not be compliant with the laws and regulations in mainland China or other relevant jurisdictions may result in harm to our reputation and business, which could further reduce our ability to collect payments, or may result in fines and penalties imposed by the regulatory authorities, any of which may have a material and adverse effect on our results of operations.
Any such misconduct by our collection personnel or the perception that our collection practices are considered to not be compliant with the laws and regulations in Chinese mainland or other relevant jurisdictions may result in harm to our reputation and business, which could further reduce our ability to collect payments, or may result in fines and penalties imposed by the regulatory authorities, any of which may have a material and adverse effect on our results of operations.
Therefore, our acquisitions of other entities that we make in the future (whether by ourselves or our subsidiaries) that meet the thresholds for clearance, may be required to be reported to and approved by the anti-monopoly law enforcement agency in mainland China, and we may be subject to penalty including, but not limited to, a fine of no more than RMB500,000 if we fail to comply with such requirement.
Therefore, our acquisitions of other entities that we make in the future (whether by ourselves or our subsidiaries) that meet the thresholds for clearance, may be required to be reported to and approved by the anti-monopoly law enforcement agency in Chinese mainland, and we may be subject to penalty including, but not limited to, a fine of no more than RMB500,000 if we fail to comply with such requirement.
Companies operating in mainland China are required to participate in various government sponsored employee benefit plans, including certain social insurance, housing funds and other welfare-oriented payment obligations, and contribute to the plans in amounts equal to certain percentages of salaries, including bonuses and allowances, of our employees up to a maximum amount specified by the local government from time to time at locations where we operate our businesses.
Companies operating in Chinese mainland are required to participate in various government sponsored employee benefit plans, including certain social insurance, housing funds and other welfare-oriented payment obligations, and contribute to the plans in amounts equal to certain percentages of salaries, including bonuses and allowances, of our employees up to a maximum amount specified by the local government from time to time at locations where we operate our businesses.
Pursuant to Bulletin 7, an “indirect transfer” of mainland China assets, including a transfer of equity interests in an unlisted non-PRC holding company of a PRC resident enterprise, by non-PRC resident enterprises may be re-characterized and treated as a direct transfer of the underlying mainland China assets, if such arrangement does not have a reasonable commercial purpose and was established for the purpose of avoiding payment of PRC enterprise income tax.
Pursuant to Bulletin 7, an “indirect transfer” of Chinese mainland assets, including a transfer of equity interests in an unlisted non-PRC holding company of a PRC resident enterprise, by non-PRC resident enterprises may be re-characterized and treated as a direct transfer of the underlying Chinese mainland assets, if such arrangement does not have a reasonable commercial purpose and was established for the purpose of avoiding payment of PRC enterprise income tax.
Any adverse changes in economic conditions in China, in the policies of the PRC government or in the laws and regulations in mainland China could have a material adverse effect on the overall economic growth of China.
Any adverse changes in economic conditions in China, in the policies of the PRC government or in the laws and regulations in Chinese mainland could have a material adverse effect on the overall economic growth of China.
Although substantially all of our business operations are in mainland China, it is unclear whether the dividends ZKH Group Limited pays with respect to the shares or ADSs of ZKH Group Limited, or the gains realized from the transfer of the shares or ADSs of ZKH Group Limited, would be treated as income derived from sources within mainland China and as a result be subject to PRC income tax if we are considered a PRC resident enterprise.
Although substantially all of our business operations are in Chinese mainland, it is unclear whether the dividends ZKH Group Limited pays with respect to the shares or ADSs of ZKH Group Limited, or the gains realized from the transfer of the shares or ADSs of ZKH Group Limited, would be treated as income derived from sources within Chinese mainland and as a result be subject to PRC income tax if we are considered a PRC resident enterprise.
In light of the various requirements imposed by the PRC regulations on loans to and direct investment in PRC entities by offshore holding companies, we cannot assure you that we will be able to complete the necessary government registrations or obtain the necessary government approvals on a timely basis, or at all, with respect to future loans to our mainland China subsidiaries or future capital contributions we make to our mainland China subsidiaries.
In light of the various requirements imposed by the PRC regulations on loans to and direct investment in PRC entities by offshore holding companies, we cannot assure you that we will be able to complete the necessary government registrations or obtain the necessary government approvals on a timely basis, or at all, with respect to future loans to our Chinese mainland subsidiaries or future capital contributions we make to our Chinese mainland subsidiaries.
Remittance of dividends by a wholly foreign-owned company out of mainland China is subject to examination by the banks designated by SAFE. Our mainland China subsidiaries have not paid dividends and will not be able to pay dividends until they generate accumulated profits and meet the requirements for statutory reserve funds. For more information on related risks, see “Item 3.
Remittance of dividends by a wholly foreign-owned company out of Chinese mainland is subject to examination by the banks designated by SAFE. Our Chinese mainland subsidiaries have not paid dividends and will not be able to pay dividends until they generate accumulated profits and meet the requirements for statutory reserve funds. For more information on related risks, see “Item 3.
For purposes of this hypothetical example, the table above assumes a maximum tax scenario under which the full withholding tax would be applied. 7 Table of Contents In addition, our mainland China subsidiaries generate their revenue primarily in Renminbi, and cash transfers from our mainland China subsidiaries to their parent companies outside of mainland China are subject to PRC government control of currency conversion.
For purposes of this hypothetical example, the table above assumes a maximum tax scenario under which the full withholding tax would be applied. 7 Table of Contents In addition, our Chinese mainland subsidiaries generate their revenue primarily in Renminbi, and cash transfers from our Chinese mainland subsidiaries to their parent companies outside of Chinese mainland are subject to PRC government control of currency conversion.
Any of these liabilities may disrupt our business operations and materially and adversely affect our reputation, financial condition and operating results. Even if we are successful in defending against such claims, legal proceedings could result in substantial costs and be a distraction to our management. Meanwhile, intellectual property protection is still a developing legal sector in mainland China.
Any of these liabilities may disrupt our business operations and materially and adversely affect our reputation, financial condition and operating results. Even if we are successful in defending against such claims, legal proceedings could result in substantial costs and be a distraction to our management. Meanwhile, intellectual property protection is still a developing legal sector in Chinese mainland.
You should carefully consider all of the information in this annual report before making an investment in our ADSs. Below please find a summary of the principal risks we face, organized under headings. With respect to the legal risks associated with being based in and having operations in mainland China as discussed in the risk factors under “Item 3.
You should carefully consider all of the information in this annual report before making an investment in our ADSs. Below please find a summary of the principal risks we face, organized under headings. With respect to the legal risks associated with being based in and having operations in Chinese mainland as discussed in the risk factors under “Item 3.
Furthermore, whether the PCAOB will continue to conduct inspections and investigations completely to its satisfaction of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our auditor’s, control, including positions taken by authorities of the PRC or any other foreign jurisdiction.
Furthermore, whether the PCAOB will continue to conduct inspections and investigations completely to its satisfaction of PCAOB-registered public accounting firms headquartered in Chinese mainland and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our auditor’s, control, including positions taken by authorities of the PRC or any other foreign jurisdiction.
In addition, cash transfers between ZKH Group Limited, our subsidiaries, or investors shall follow the applicable laws and regulations in mainland China. 6 Table of Contents As part of our corporate restructuring throughout 2021 to 2022, the investors exited from ZKH Industrial Supply by way of capital reduction and received refunds for their original investments.
In addition, cash transfers between ZKH Group Limited, our subsidiaries, or investors shall follow the applicable laws and regulations in Chinese mainland. 6 Table of Contents As part of our corporate restructuring throughout 2021 to 2022, the investors exited from ZKH Industrial Supply by way of capital reduction and received refunds for their original investments.
The hypothetical book pre-tax earnings amount, not considering timing differences, is assumed to equal taxable income in mainland China. (2) Certain of our subsidiaries qualifies for a 15% preferential income tax rate in mainland China. However, such rate is subject to qualification, is temporary in nature, and may not be available in a future period when distributions are paid.
The hypothetical book pre-tax earnings amount, not considering timing differences, is assumed to equal taxable income in Chinese mainland. (2) Certain of our subsidiaries qualifies for a 15% preferential income tax rate in Chinese mainland. However, such rate is subject to qualification, is temporary in nature, and may not be available in a future period when distributions are paid.
Furthermore, whether the PCAOB will continue to conduct inspections and investigations completely to its satisfaction of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our auditor’s, control, including positions taken by authorities of the mainland China or any other foreign jurisdiction.
Furthermore, whether the PCAOB will continue to conduct inspections and investigations completely to its satisfaction of PCAOB-registered public accounting firms headquartered in Chinese mainland and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our auditor’s, control, including positions taken by authorities of the Chinese mainland or any other foreign jurisdiction.
In such event, despite our efforts to restructure to comply with the then applicable laws and regulations in mainland China in order to continue our operations in mainland China, we may experience material changes in our business and results of operations, our attempts may prove to be futile due to factors beyond our control, and the value of the ADSs you invest in may significantly decline or become worthless.
In such event, despite our efforts to restructure to comply with the then applicable laws and regulations in Chinese mainland in order to continue our operations in Chinese mainland, we may experience material changes in our business and results of operations, our attempts may prove to be futile due to factors beyond our control, and the value of the ADSs you invest in may significantly decline or become worthless.
In addition, our wholly foreign owned subsidiaries in mainland China may allocate a portion of their after-tax profits based on accounting standards in mainland China to enterprise expansion funds and staff bonus and welfare funds at their discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends. See also “Item 5.
In addition, our wholly foreign owned subsidiaries in Chinese mainland may allocate a portion of their after-tax profits based on accounting standards in Chinese mainland to enterprise expansion funds and staff bonus and welfare funds at their discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends. See also “Item 5.
Holders of such intellectual property rights may seek to enforce such intellectual property rights against us in mainland China, the United States or other jurisdictions. If any third-party infringement claims are brought against us, we may be forced to divert management’s time and other resources from our business and operations to defend against these claims, regardless of their merits.
Holders of such intellectual property rights may seek to enforce such intellectual property rights against us in Chinese mainland, the United States or other jurisdictions. If any third-party infringement claims are brought against us, we may be forced to divert management’s time and other resources from our business and operations to defend against these claims, regardless of their merits.
SAFE Circular 37 is applicable to our shareholders who are PRC residents and may be applicable to any offshore acquisitions that we make in the future. 52 Table of Contents Under these foreign exchange regulations, PRC residents who make, or have previously made, prior to the implementation of these foreign exchange regulations, direct or indirect investments in offshore companies are required to register those investments.
SAFE Circular 37 is applicable to our shareholders who are PRC residents and may be applicable to any offshore acquisitions that we make in the future. 53 Table of Contents Under these foreign exchange regulations, PRC residents who make, or have previously made, prior to the implementation of these foreign exchange regulations, direct or indirect investments in offshore companies are required to register those investments.
For purposes of this hypothetical example, the table above reflects a maximum tax scenario under which the full statutory rate would be effective. (3) The PRC Enterprise Income Tax Law imposes a withholding income tax of 10% on dividends distributed by a foreign-invested enterprise to its immediate holding company outside of mainland China.
For purposes of this hypothetical example, the table above reflects a maximum tax scenario under which the full statutory rate would be effective. (3) The PRC Enterprise Income Tax Law imposes a withholding income tax of 10% on dividends distributed by a foreign-invested enterprise to its immediate holding company outside of Chinese mainland.
ZKH Group Limited is not a Chinese operating company but a Cayman Islands holding company with operations primarily conducted through our mainland China subsidiaries.
ZKH Group Limited is not a Chinese operating company but a Cayman Islands holding company with operations primarily conducted through our Chinese mainland subsidiaries.
As mainland China has adopted a “first-to-file” trademark registration system and there are trademarks similar to ours which have been registered in the same categories, we may not be able to successfully register our trademarks in such categories and may be exposed to the risk that we are held to be infringing third-party trademark rights.
As Chinese mainland has adopted a “first-to-file” trademark registration system and there are trademarks similar to ours which have been registered in the same categories, we may not be able to successfully register our trademarks in such categories and may be exposed to the risk that we are held to be infringing third-party trademark rights.
If this subsidiary fails to maintain its “High and New Technology Enterprise” qualification, its enterprise income tax rate would increase to 25%, which could have an adverse effect on our financial condition and results of operations. In addition, certain of our mainland China subsidiaries enjoy local government subsidies.
If this subsidiary fails to maintain its “High and New Technology Enterprise” qualification, its enterprise income tax rate would increase to 25%, which could have an adverse effect on our financial condition and results of operations. In addition, certain of our Chinese mainland subsidiaries enjoy local government subsidies.
Our operations in mainland China are governed by laws and regulations in mainland China. As of the date of this annual report, certain leasehold interests in our leased properties have not been registered with the competent PRC government authorities as required by the laws and regulations in mainland China. For more details, see “Item 3. Key Information—D.
Our operations in Chinese mainland are governed by laws and regulations in Chinese mainland. As of the date of this annual report, certain leasehold interests in our leased properties have not been registered with the competent PRC government authorities as required by the laws and regulations in Chinese mainland. For more details, see “Item 3. Key Information—D.
In addition, this Regulation requires that data processors processing important data shall conduct an annual risk assessment for network data processing activities, and submit the risk assessment report to the competent authorities at or above the provincial level. In addition, internet information in mainland China is regulated from a national security standpoint.
In addition, this Regulation requires that data processors processing important data shall conduct an annual risk assessment for network data processing activities, and submit the risk assessment report to the competent authorities at or above the provincial level. In addition, internet information in Chinese mainland is regulated from a national security standpoint.
In addition, parts of our business rely on technologies developed or licensed by third parties, and we may not be able to obtain or continue to obtain licenses and technologies from these third parties on reasonable terms, or at all. It is often difficult to maintain and enforce intellectual property rights in mainland China.
In addition, parts of our business rely on technologies developed or licensed by third parties, and we may not be able to obtain or continue to obtain licenses and technologies from these third parties on reasonable terms, or at all. It is often difficult to maintain and enforce intellectual property rights in Chinese mainland.
If any new laws and/or regulations on foreign investments in mainland China are promulgated and implemented, such changes could have a significant impact on our current corporate structure, which in turn could have a material adverse impact on our business and operations, our ability to raise capital and the market price of our ADSs.
If any new laws and/or regulations on foreign investments in Chinese mainland are promulgated and implemented, such changes could have a significant impact on our current corporate structure, which in turn could have a material adverse impact on our business and operations, our ability to raise capital and the market price of our ADSs.
In particular, laws and regulations in mainland China concerning the internet-related industries are developing and evolving. Although we have taken measures to comply with the laws and regulations applicable to our business operations and to avoid conducting any non-compliant activities under these laws and regulations, the PRC governmental authorities may promulgate new laws and regulations regulating internet-related industries.
In particular, laws and regulations in Chinese mainland concerning the internet-related industries are developing and evolving. Although we have taken measures to comply with the laws and regulations applicable to our business operations and to avoid conducting any non-compliant activities under these laws and regulations, the PRC governmental authorities may promulgate new laws and regulations regulating internet-related industries.
Also, the PRC government has indicated an intent to exert more oversight and control over offerings that are conducted overseas and foreign investment in mainland China-based issuers. Any such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors.
Also, the PRC government has indicated an intent to exert more oversight and control over offerings that are conducted overseas and foreign investment in Chinese mainland-based issuers. Any such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors.
The requirement of employee benefit plans has not been implemented consistently by the local governments in mainland China given the different levels of economic development in different locations. Companies operating in mainland China are also required to withhold individual income tax on employees’ salaries based on the actual salary of each employee upon payment.
The requirement of employee benefit plans has not been implemented consistently by the local governments in Chinese mainland given the different levels of economic development in different locations. Companies operating in Chinese mainland are also required to withhold individual income tax on employees’ salaries based on the actual salary of each employee upon payment.
We may also be subject to regulatory investigations and other penalties if our other employment practices (e.g., engaging third-party human resource service providers to pay social insurance and housing funds for our employees on our behalf) are deemed to be in violation of laws and regulations in mainland China.
We may also be subject to regulatory investigations and other penalties if our other employment practices (e.g., engaging third-party human resource service providers to pay social insurance and housing funds for our employees on our behalf) are deemed to be in violation of laws and regulations in Chinese mainland.
If any PRC shareholder fails to make the required registration or update the previously filed registration, the mainland China subsidiary of that offshore parent company may be restricted from distributing their profits and the proceeds from any reduction in capital, share transfer or liquidation to their offshore parent company, and the offshore parent company may also be restricted from injecting additional capital into its mainland China subsidiary.
If any PRC shareholder fails to make the required registration or update the previously filed registration, the Chinese mainland subsidiary of that offshore parent company may be restricted from distributing their profits and the proceeds from any reduction in capital, share transfer or liquidation to their offshore parent company, and the offshore parent company may also be restricted from injecting additional capital into its Chinese mainland subsidiary.
To the extent cash or assets in the business is in mainland China or a PRC entity, the funds and assets may not be available to fund operations or for other use outside of mainland China due to interventions in or the imposition of restrictions and limitations on the ability of ZKH Group Limited or its subsidiaries by the PRC government to transfer cash or assets.
To the extent cash or assets in the business is in Chinese mainland or a PRC entity, the funds and assets may not be available to fund operations or for other use outside of Chinese mainland due to interventions in or the imposition of restrictions and limitations on the ability of ZKH Group Limited or its subsidiaries by the PRC government to transfer cash or assets.

… 241 more changes not shown on this page.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

176 edited+51 added−41 removed220 unchanged
For more details and relevant risks, please see “Item 3. Key Information—D.
For more details and relevant risks, please see “Item 3. Key Information—D.
For more details and relevant risks, please see “Item 3. Key Information—D.
For more details and relevant risks, please see “Item 3. Key Information—D.
For more details and relevant risks, please see “Item 3. Key Information—D.
For more details and relevant risks, please see “Item 3. Key Information—D.
Failure to comply with the registration procedures set forth in the Circular on Relevant Issues Relating to Domestic Resident’s Investment and Financing and Roundtrip Investment through Special Purpose Vehicles and the subsequent notice, or making misrepresentations or failing to disclose the control of the foreign-invested enterprise that is established through round-trip investment, may result in restrictions being imposed on the foreign exchange activities of the foreign-invested enterprise, including payment of dividends and other distributions, such as proceeds from any reduction in capital, share transfer or liquidation, to its offshore parent or affiliate, and the capital inflow from the offshore parent, and may also subject Chinese residents or entities to penalties under mainland China foreign exchange administration regulations.
Failure to comply with the registration procedures set forth in the Circular on Relevant Issues Relating to Domestic Resident’s Investment and Financing and Roundtrip Investment through Special Purpose Vehicles and the subsequent notice, or making misrepresentations or failing to disclose the control of the foreign-invested enterprise that is established through round-trip investment, may result in restrictions being imposed on the foreign exchange activities of the foreign-invested enterprise, including payment of dividends and other distributions, such as proceeds from any reduction in capital, share transfer or liquidation, to its offshore parent or affiliate, and the capital inflow from the offshore parent, and may also subject Chinese residents or entities to penalties under Chinese mainland foreign exchange administration regulations.
Risk Factors—Risks Related to Doing Business in China—We may rely on dividends and other distributions on equity paid by our mainland China subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our mainland China subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.” Regulation on Foreign Exchange Registration of Overseas Investment by PRC residents SAFE issued the Circular on Relevant Issues Relating to Domestic Resident’s Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, which became effective on July 4, 2014.
Risk Factors—Risks Related to Doing Business in China—We may rely on dividends and other distributions on equity paid by our Chinese mainland subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our Chinese mainland subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.” Regulation on Foreign Exchange Registration of Overseas Investment by PRC residents SAFE issued the Circular on Relevant Issues Relating to Domestic Resident’s Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, which became effective on July 4, 2014.
Under this notice and other rules and regulations, domestic individuals, which means the Chinese residents and non-PRC citizens residing in mainland China for a continuous period of not less than one year, subject to a few exceptions, who participate in a stock incentive plan in an overseas publicly listed company are required to register with SAFE or its local branches and complete certain other procedures.
Under this notice and other rules and regulations, domestic individuals, which means the Chinese residents and non-PRC citizens residing in Chinese mainland for a continuous period of not less than one year, subject to a few exceptions, who participate in a stock incentive plan in an overseas publicly listed company are required to register with SAFE or its local branches and complete certain other procedures.
Risk Factors—Risks Related to Doing Business in China—We face uncertainties with respect to indirect transfer of equity interests in PRC resident enterprises by their non-PRC holding companies.” Regulations on Anti-Monopoly The PRC Anti-monopoly Law, which was adopted by Standing Committee of the National People’s Congress, became effective on August 1, 2008 and was last amended on August 1, 2022, provides the regulatory framework for the mainland China anti-monopoly.
Risk Factors—Risks Related to Doing Business in China—We face uncertainties with respect to indirect transfer of equity interests in PRC resident enterprises by their non-PRC holding companies.” Regulations on Anti-Monopoly The PRC Anti-monopoly Law, which was adopted by Standing Committee of the National People’s Congress, became effective on August 1, 2008 and was last amended on August 1, 2022, provides the regulatory framework for the Chinese mainland anti-monopoly.
Under this circular, a “special purpose vehicle” refers to an offshore entity established or controlled, directly or indirectly, by Chinese residents or entities for the purpose of seeking offshore financing or making offshore investment, using legitimate onshore or offshore assets or interests, while “round trip investment” refers to direct investment in mainland China by Chinese residents or entities through special purpose vehicles, namely, establishing foreign-invested enterprises to obtain ownership, control rights and management rights.
Under this circular, a “special purpose vehicle” refers to an offshore entity established or controlled, directly or indirectly, by Chinese residents or entities for the purpose of seeking offshore financing or making offshore investment, using legitimate onshore or offshore assets or interests, while “round trip investment” refers to direct investment in Chinese mainland by Chinese residents or entities through special purpose vehicles, namely, establishing foreign-invested enterprises to obtain ownership, control rights and management rights.
Pursuant to the Notice of the Supreme People’s Court, the Supreme People’s Procuratorate and the Ministry of Public Security on Legally Punishing Criminal Activities Infringing upon the Personal Information of Citizens, which became effective on April 23, 2013, and the Interpretation of the Supreme People’s Court and the Supreme People’s Procuratorate on Several Issues regarding Legal Application in Criminal Cases Infringing upon the Personal Information of Citizens, which became effective on June 1, 2017, the following activities may constitute the crime of infringing upon a citizen’s personal information: (i) providing a citizen’s personal information to specified persons or releasing a citizen’s personal information online or through other methods in violation of the provisions; (ii) providing legitimately collected information relating to a citizen to others without such citizen’s consent (unless the information is processed, not traceable to a specific person and not recoverable); (iii) collecting a citizen’s personal information in violation of applicable rules and regulations when performing a duty or providing services; or (iv) collecting a citizen’s personal information by purchasing, accepting or exchanging such information in violation of applicable rules and regulations. ​ 87 Table of Contents On August 20, 2021, the Standing Committee of the National People’s Congress adopted the PRC Personal Information Protection Law, which became effective on November 1, 2021.
Pursuant to the Notice of the Supreme People’s Court, the Supreme People’s Procuratorate and the Ministry of Public Security on Legally Punishing Criminal Activities Infringing upon the Personal Information of Citizens, which became effective on April 23, 2013, and the Interpretation of the Supreme People’s Court and the Supreme People’s Procuratorate on Several Issues regarding Legal Application in Criminal Cases Infringing upon the Personal Information of Citizens, which became effective on June 1, 2017, the following activities may constitute the crime of infringing upon a citizen’s personal information: (i) providing a citizen’s personal information to specified persons or releasing a citizen’s personal information online or through other methods in violation of the provisions; (ii) providing legitimately collected information relating to a citizen to others without such citizen’s consent (unless the information is processed, not traceable to a specific person and not recoverable); (iii) collecting a citizen’s personal information in violation of applicable rules and regulations when performing a duty or providing services; or (iv) collecting a citizen’s personal information by purchasing, accepting or exchanging such information in violation of applicable rules and regulations. 89 Table of Contents On August 20, 2021, the Standing Committee of the National People’s Congress adopted the PRC Personal Information Protection Law, which became effective on November 1, 2021.
Under the PRC Anti-monopoly Law, the prohibited monopolistic acts include monopolistic agreements, abuse of a dominant market position and concentration of businesses that may have the effect to eliminate or restrict competition. 97 Table of Contents Pursuant to the PRC Anti-monopoly Law, a business operator that possesses a dominant market position is prohibited from abusing its dominant market position, including conducting the following acts: (i) selling commodities at unfairly high prices or buying commodities at unfairly low prices; (ii) without justifiable reasons, selling commodities at prices below cost; (iii) without justifiable reasons, refusing to enter into transactions with their trading counterparts; (iv) without justifiable reasons, allowing trading counterparts to make transactions exclusively with itself or with the business operators designated by it; (v) without justifiable reasons, tying commodities or imposing unreasonable trading conditions to transactions; (vi) without justifiable reasons, applying differential prices and other transaction terms among their trading counterparts who are on an equal footing; and (vii) other acts determined as abuse of dominant market position by the governmental authorities.
Under the PRC Anti-monopoly Law, the prohibited monopolistic acts include monopolistic agreements, abuse of a dominant market position and concentration of businesses that may have the effect to eliminate or restrict competition. 99 Table of Contents Pursuant to the PRC Anti-monopoly Law, a business operator that possesses a dominant market position is prohibited from abusing its dominant market position, including conducting the following acts: (i) selling commodities at unfairly high prices or buying commodities at unfairly low prices; (ii) without justifiable reasons, selling commodities at prices below cost; (iii) without justifiable reasons, refusing to enter into transactions with their trading counterparts; (iv) without justifiable reasons, allowing trading counterparts to make transactions exclusively with itself or with the business operators designated by it; (v) without justifiable reasons, tying commodities or imposing unreasonable trading conditions to transactions; (vi) without justifiable reasons, applying differential prices and other transaction terms among their trading counterparts who are on an equal footing; and (vii) other acts determined as abuse of dominant market position by the governmental authorities.
Through data cleaning, standardization and classification, the ZKH MRO Dictionary labels each of our product offerings with standardized data benchmarks and follows consistent nomenclature, allowing us to match products with our customers’ varying business needs. This innovation also facilitates cross-brand product selection and substitution, which helps optimizes procurement cost structure and enhances supply chain responsiveness.
Through data cleaning, standardization and classification, ZKH MRO Dictionary labels each of our product offerings with standardized data benchmarks and follows consistent nomenclature, allowing us to match products with our customers’ varying business needs. This innovation also facilitates cross-brand product selection and substitution, which helps optimizes procurement cost structure and enhances supply chain responsiveness.
However, according to the Notice on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties issued on February 20, 2009 by the State Administration of Taxation, if the tax authorities of mainland China determine, in their discretion, that a company benefits from such reduced income tax rate due to a structure or arrangement that is primarily tax-driven, such tax authorities of mainland China may adjust the preferential tax treatment; and according to the Announcement on Relevant Issues Concerning the “Beneficial Owners” in Tax Treaties issued on February 3, 2018 by the State Administration of Taxation and effective from April 1, 2018, comprehensive analysis based on the stipulated factor therein and actual circumstances shall be adopted when recognizing the “beneficial owner” and agents and designated wire beneficiaries are specifically excluded from being recognized as “beneficial owners.” For more details and relevant risks, please see “Item 5.
However, according to the Notice on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties issued on February 20, 2009 by the State Administration of Taxation, if the tax authorities of Chinese mainland determine, in their discretion, that a company benefits from such reduced income tax rate due to a structure or arrangement that is primarily tax-driven, such tax authorities of Chinese mainland may adjust the preferential tax treatment; and according to the Announcement on Relevant Issues Concerning the “Beneficial Owners” in Tax Treaties issued on February 3, 2018 by the State Administration of Taxation and effective from April 1, 2018, comprehensive analysis based on the stipulated factor therein and actual circumstances shall be adopted when recognizing the “beneficial owner” and agents and designated wire beneficiaries are specifically excluded from being recognized as “beneficial owners.” For more details and relevant risks, please see “Item 5.
Empowered by cutting-edge AI tools and big data, our dedicated team’s extensive expertise in industrial grade MRO products enable us to deliver a bespoke curation optimally aligned with each customer’s demand from a myriad of products with complicated technical specifications, varying application scenarios, and disparate supply-chain compliance capabilities.
Empowered by cutting-edge AI tools and big data, our dedicated team’s extensive expertise in professional and industrial grade MRO products enable us to deliver a bespoke curation optimally aligned with each customer’s demand from a myriad of products with complicated technical specifications, varying application scenarios, and disparate supply-chain compliance capabilities.
Risk Factors—Risks Related to Doing Business in China—PRC regulations relating to offshore investment activities by PRC residents may limit the ability of our mainland China subsidiaries to change their registered capital or distribute profits to us or otherwise expose us or our PRC resident beneficial owners to liability and penalties under PRC laws.
Risk Factors—Risks Related to Doing Business in China—PRC regulations relating to offshore investment activities by PRC residents may limit the ability of our Chinese mainland subsidiaries to change their registered capital or distribute profits to us or otherwise expose us or our PRC resident beneficial owners to liability and penalties under PRC laws.
Participants of a stock incentive plan who are Chinese residents must retain a qualified mainland China agent, which could be a Chinese subsidiary of the overseas publicly listed company or another qualified institution selected by the Chinese subsidiary, to conduct the SAFE registration and other procedures with respect to the stock incentive plan on behalf of its participants.
Participants of a stock incentive plan who are Chinese residents must retain a qualified Chinese mainland agent, which could be a Chinese subsidiary of the overseas publicly listed company or another qualified institution selected by the Chinese subsidiary, to conduct the SAFE registration and other procedures with respect to the stock incentive plan on behalf of its participants.
Our ZKH platform and GBB platform are highly scalable and complementary. We first started our operations on our ZKH platform for enterprise customers and have developed core capabilities in industry insights, technology empowerment and supply chain effectiveness over the past years. By leveraging the infrastructure we have built, we launched our GBB platform for micro businesses.
Our ZKH platform and GBB platform are highly scalable and complementary. We first started our operations on our ZKH platform for enterprise customers and have developed core capabilities in industry insights, technology empowerment and supply chain effectiveness over the past years. By leveraging the infrastructure we have built, we launched our GBB platform for retailers and micro businesses.
Any violation of these laws and regulations may subject the internet information service provider to warnings, fines, confiscation of illegal gains, revocation of licenses, cancelation of filings, closedown of websites or even criminal liabilities. 86 Table of Contents With respect to the security of information collected and used by mobile apps, pursuant to the Announcement of Conducting Special Supervision against the Illegal Collection and Use of Personal Information by Apps, which was issued on January 23, 2019, app operators shall collect and use personal information in compliance with the PRC Cybersecurity Law and shall be responsible for the security of personal information obtained from users and take effective measures to strengthen the personal information protection.
Any violation of these laws and regulations may subject the internet information service provider to warnings, fines, confiscation of illegal gains, revocation of licenses, cancelation of filings, closedown of websites or even criminal liabilities. 88 Table of Contents With respect to the security of information collected and used by mobile apps, pursuant to the Announcement of Conducting Special Supervision against the Illegal Collection and Use of Personal Information by Apps, which was issued on January 23, 2019, app operators shall collect and use personal information in compliance with the PRC Cybersecurity Law and shall be responsible for the security of personal information obtained from users and take effective measures to strengthen the personal information protection.
In addition, a Chinese company, including a foreign-invested enterprise in mainland China, is required to allocate at least 10% of its accumulated profits each year, if any, to fund certain reserve funds until these reserves have reached 50% of the registered capital of the enterprise.
In addition, a Chinese company, including a foreign-invested enterprise in Chinese mainland, is required to allocate at least 10% of its accumulated profits each year, if any, to fund certain reserve funds until these reserves have reached 50% of the registered capital of the enterprise.
Risk Factors—Risks Related to Doing Business in China—We may be adversely affected by the complexity, uncertainties and changes in PRC regulation of internet-related businesses and companies, and any lack of requisite approvals, licenses or permits applicable to our business may have a material adverse effect on our business and results of operations.” ​ 83 Table of Contents Regulation on Foreign Investment Restriction on Value-Added Telecommunications Services Pursuant to the Provisions on Administration of Foreign-Invested Telecommunications Enterprises promulgated by the State Council on December 11, 2001 and last amended on May 1, 2022, the ultimate foreign equity ownership in a value-added telecommunications services provider may not exceed 50%.
Risk Factors—Risks Related to Doing Business in China—We may be adversely affected by the complexity, uncertainties and changes in PRC regulation of internet-related businesses and companies, and any lack of requisite approvals, licenses or permits applicable to our business may have a material adverse effect on our business and results of operations.” 85 Table of Contents Regulation on Foreign Investment Restriction on Value-Added Telecommunications Services Pursuant to the Provisions on Administration of Foreign-Invested Telecommunications Enterprises promulgated by the State Council on December 11, 2001 and last amended on May 1, 2022, the ultimate foreign equity ownership in a value-added telecommunications services provider may not exceed 50%.
The foreign exchange proceeds received by the Chinese residents from the sale of shares under the stock incentive plans granted and dividends distributed by the overseas listed companies must be remitted into the bank accounts in mainland China opened by the mainland China agents before distribution to such Chinese residents.
The foreign exchange proceeds received by the Chinese residents from the sale of shares under the stock incentive plans granted and dividends distributed by the overseas listed companies must be remitted into the bank accounts in Chinese mainland opened by the Chinese mainland agents before distribution to such Chinese residents.
ZKH Group Limited is not a Chinese operating company but a Cayman Islands holding company with operations primarily conducted through our mainland China subsidiaries. Under this holding company structure, investors in the ADSs are purchasing equity interests in the Cayman Islands holding company and are not purchasing equity securities of our operating subsidiaries in mainland China. D.
ZKH Group Limited is not a Chinese operating company but a Cayman Islands holding company with operations primarily conducted through our Chinese mainland subsidiaries. Under this holding company structure, investors in the ADSs are purchasing equity interests in the Cayman Islands holding company and are not purchasing equity securities of our operating subsidiaries in Chinese mainland. D.
An enterprise established outside of mainland China with its “de facto management bodies” located within mainland China is considered a “resident enterprise,” meaning that it can be treated in a manner similar to a Chinese domestic enterprise for enterprise income tax purposes.
An enterprise established outside of Chinese mainland with its “de facto management bodies” located within Chinese mainland is considered a “resident enterprise,” meaning that it can be treated in a manner similar to a Chinese domestic enterprise for enterprise income tax purposes.
Whereas, pursuant to the Provisional Regulations on Value-Added Tax of the PRC, which became effective on January 1, 1994 and was last updated on November 19, 2017, and its implementation regulations, unless otherwise specified by the laws and regulations, any entity or individual engaged in the sales of goods, provision of processing, repairs and replacement services and importation of goods into mainland China is generally required to pay a value-added tax for revenues generated from sales of products, while qualified input value-added tax paid on taxable purchase can be offset against such output value-added tax.
Whereas, pursuant to the Provisional Regulations on Value-Added Tax of the PRC, which became effective on January 1, 1994 and was last updated on November 19, 2017, and its implementation regulations, unless otherwise specified by the laws and regulations, any entity or individual engaged in the sales of goods, provision of processing, repairs and replacement services and importation of goods into Chinese mainland is generally required to pay a value-added tax for revenues generated from sales of products, while qualified input value-added tax paid on taxable purchase can be offset against such output value-added tax.
The mainland China agents must, on behalf of the Chinese residents who have the right to exercise the employee share options, apply to SAFE or its local branches for an annual quota for the payment of foreign currencies in connection with the Chinese residents’ exercise of the employee share options.
The Chinese mainland agents must, on behalf of the Chinese residents who have the right to exercise the employee share options, apply to SAFE or its local branches for an annual quota for the payment of foreign currencies in connection with the Chinese residents’ exercise of the employee share options.
Social Insurance As required under the Regulation of Insurance for Labor Injury implemented on January 1, 2004 and last amended on January 1, 2011, the Provisional Measures for Maternity Insurance of Employees of Corporations implemented on January 1, 1995, the Decisions on the Establishment of a Unified Program for Old-Aged Pension Insurance of the State Council issued on July 16, 1997, the Decisions on the Establishment of the Medical Insurance Program for Urban Workers of the State Council promulgated on December 14, 1998, the Unemployment Insurance Measures promulgated on January 22, 1999 and the PRC Social Insurance Law implemented on July 1, 2011 and last amended on December 29, 2018, employers are required to provide their employees in mainland China with welfare benefits covering pension insurance, unemployment insurance, maternity insurance, work-related injury insurance, and medical insurance.
Social Insurance As required under the Regulation of Insurance for Labor Injury implemented on January 1, 2004 and last amended on January 1, 2011, the Provisional Measures for Maternity Insurance of Employees of Corporations implemented on January 1, 1995, the Decisions on the Establishment of a Unified Program for Old-Aged Pension Insurance of the State Council issued on July 16, 1997, the Decisions on the Establishment of the Medical Insurance Program for Urban Workers of the State Council promulgated on December 14, 1998, the Unemployment Insurance Measures promulgated on January 22, 1999 and the PRC Social Insurance Law implemented on July 1, 2011 and last amended on December 29, 2018, employers are required to provide their employees in Chinese mainland with welfare benefits covering pension insurance, unemployment insurance, maternity insurance, work-related injury insurance, and medical insurance.
Interim Measures for Seven-day Unconditional Return of Online Purchased Goods, which became effective on March 15, 2017 and was last amended on October 23, 2020, further clarifies the scope of consumers’ rights to make returns without a reason, the standard of “good condition,” and return procedures. 82 Table of Contents Regulation Related to Value-Added Telecommunications Services Regulation on Value-Added Telecommunications Services The primary regulation governing telecommunications services is PRC Telecommunications Regulations, which were promulgated by the State Council, became effective on September 25, 2000 and was last amended on February 6, 2016.
Interim Measures for Seven-day Unconditional Return of Online Purchased Goods, which became effective on March 15, 2017 and was last amended on October 23, 2020, further clarifies the scope of consumers’ rights to make returns without a reason, the standard of “good condition,” and return procedures. 84 Table of Contents Regulation Related to Value-Added Telecommunications Services Regulation on Value-Added Telecommunications Services The primary regulation governing telecommunications services is PRC Telecommunications Regulations, which were promulgated by the State Council, became effective on September 25, 2000 and was last amended on February 6, 2016.
A Chinese company may, in its discretion, allocate a portion of its after-tax profits based on accounting standards in mainland China to staff welfare and bonus funds. These reserves are not distributable as cash dividends.
A Chinese company may, in its discretion, allocate a portion of its after-tax profits based on accounting standards in Chinese mainland to staff welfare and bonus funds. These reserves are not distributable as cash dividends.
Pursuant to the Adjusting Foreign Exchange Administration Policies on Foreign Direct Investment, the opening of various special purpose foreign exchange accounts, such as pre-establishment expenses accounts, foreign exchange capital accounts and guarantee accounts, the reinvestment of Renminbi proceeds derived by foreign investors in mainland China, and remittance of foreign exchange profits and dividends by a foreign-invested enterprise to its foreign shareholders no longer require the approval or verification of SAFE, and multiple capital accounts for the same entity may be opened in different provinces, which was not possible previously.
Pursuant to the Adjusting Foreign Exchange Administration Policies on Foreign Direct Investment, the opening of various special purpose foreign exchange accounts, such as pre-establishment expenses accounts, foreign exchange capital accounts and guarantee accounts, the reinvestment of Renminbi proceeds derived by foreign investors in Chinese mainland, and remittance of foreign exchange profits and dividends by a foreign-invested enterprise to its foreign shareholders no longer require the approval or verification of SAFE, and multiple capital accounts for the same entity may be opened in different provinces, which was not possible previously.
Operating Results—Taxation—Mainland China.” Tax on Indirect Transfer On February 3, 2015, the State Administration of Taxation issued the Circular on Issues of Enterprise Income Tax on Indirect Transfers of Assets by Non-PRC resident enterprises, pursuant to which an “indirect transfer” of assets, including equity interests in a PRC resident enterprise, by non-PRC resident enterprises, may be recharacterized and treated as a direct transfer of PRC taxable assets, if such arrangement does not have a reasonable commercial purpose and was established for the purpose of avoiding payment of PRC enterprise income tax.
Operating Results—Taxation—Chinese mainland.” Tax on Indirect Transfer On February 3, 2015, the State Administration of Taxation issued the Circular on Issues of Enterprise Income Tax on Indirect Transfers of Assets by Non-PRC resident enterprises, pursuant to which an “indirect transfer” of assets, including equity interests in a PRC resident enterprise, by non-PRC resident enterprises, may be recharacterized and treated as a direct transfer of PRC taxable assets, if such arrangement does not have a reasonable commercial purpose and was established for the purpose of avoiding payment of PRC enterprise income tax.
In March 30, 2015, SAFE promulgated the Circular of the SAFE on Reforming the Management Approach regarding the Settlement of Foreign Capital of Foreign-invested Enterprise, which allows all foreign-invested enterprises established in mainland China to settle their foreign exchange capital on a discretionary basis according to the actual needs of their business operation, provides the procedures for foreign-invested companies to use Renminbi converted from foreign currency-denominated capital for equity investments and removes certain other restrictions that had been provided in prior regulations.
In March 30, 2015, SAFE promulgated the Circular of the SAFE on Reforming the Management Approach regarding the Settlement of Foreign Capital of Foreign-invested Enterprise, which allows all foreign-invested enterprises established in Chinese mainland to settle their foreign exchange capital on a discretionary basis according to the actual needs of their business operation, provides the procedures for foreign-invested companies to use Renminbi converted from foreign currency-denominated capital for equity investments and removes certain other restrictions that had been provided in prior regulations.
Our MRO procurement solutions are mainly delivered through our two major online platforms, the ZKH platform and the GBB platform . We tactically started with providing one-stop MRO procurement services to large corporations in China.
Our MRO procurement solutions are mainly delivered through our two major online platforms in China, ZKH platform and GBB platform . We tactically started with providing one-stop MRO procurement services to large corporations in China.
When determining whether there is a “reasonable commercial purpose” in the transaction arrangement, features to considered include, inter alia, whether the main value of the equity interest of the offshore enterprise derives directly or indirectly from PRC taxable assets; whether the assets of the offshore enterprise mainly consists of direct or indirect investment in mainland China or if its income is mainly derived from mainland China; and whether the offshore enterprise and its subsidiaries directly or indirectly holding PRC taxable assets have a real commercial nature which is evidenced by their actual function and risk exposure.
When determining whether there is a “reasonable commercial purpose” in the transaction arrangement, features to considered include, inter alia, whether the main value of the equity interest of the offshore enterprise derives directly or indirectly from PRC taxable assets; whether the assets of the offshore enterprise mainly consists of direct or indirect investment in Chinese mainland or if its income is mainly derived from Chinese mainland; and whether the offshore enterprise and its subsidiaries directly or indirectly holding PRC taxable assets have a real commercial nature which is evidenced by their actual function and risk exposure.
It also provides several protective rules and principles for foreign investors and their investments in the mainland China, including foreign investors’ funds being freely transferred out and into the territory of the PRC through the entire life cycle from the entry to the exit of foreign investment, a comprehensive system to guarantee fair competition among foreign-invested enterprises and domestic enterprises to be established, and prohibition of the state to expropriate any foreign investment except under special circumstances.
It also provides several protective rules and principles for foreign investors and their investments in the Chinese mainland, including foreign investors’ funds being freely transferred out and into the territory of the PRC through the entire life cycle from the entry to the exit of foreign investment, a comprehensive system to guarantee fair competition among foreign-invested enterprises and domestic enterprises to be established, and prohibition of the state to expropriate any foreign investment except under special circumstances.
The production, distribution, purchase, transportation, import and export of precursor chemicals in mainland China are regulated by Regulation on the Administration of Precursor Chemicals adopted by the State Council, which became effective on November 1, 2005 and was last amended on September 18, 2018, and a catalogue of precursor chemicals which is divided into three categories: Category I covers the major materials to produce narcotic drugs, and Categories II and III cover the chemical auxiliary substances to produce narcotic drugs.
The production, distribution, purchase, transportation, import and export of precursor chemicals in Chinese mainland are regulated by Regulation on the Administration of Precursor Chemicals adopted by the State Council, which became effective on November 1, 2005 and was last amended on September 18, 2018, and a catalogue of precursor chemicals which is divided into three categories: Category I covers the major materials to produce narcotic drugs, and Categories II and III cover the chemical auxiliary substances to produce narcotic drugs.
In addition to direct shipping, suppliers may choose to rent space in our warehouses and use logistics services available on our platform to ship their products stored in our warehouses. 73 Table of Contents We have established a set of stringent criteria for third-party logistic service providers and have entered into long-term framework agreements with the ones we have selected to serve our customers.
In addition to direct shipping, suppliers may choose to rent space in our warehouses and use logistics services available on our platform to ship their products stored in our warehouses. 75 Table of Contents We have established a set of stringent criteria for third-party logistic service providers and have entered into long-term framework agreements with the ones we have selected to serve our customers.
Pursuant to the Arrangement Between Mainland China and Hong Kong Special Administrative Region for the Avoidance of Double Taxation on Income, and other applicable PRC laws, if a Hong Kong resident enterprise is determined by the competent PRC tax authority to have satisfied the conditions and requirements under such double tax avoidance arrangement and other applicable laws, the 10% withholding tax on the dividends the Hong Kong resident enterprise receives from a PRC resident enterprise may be reduced to 5% upon receiving approval from the competent tax authority.
Pursuant to the Arrangement Between Chinese mainland and Hong Kong Special Administrative Region for the Avoidance of Double Taxation on Income, and other applicable PRC laws, if a Hong Kong resident enterprise is determined by the competent PRC tax authority to have satisfied the conditions and requirements under such double tax avoidance arrangement and other applicable laws, the 10% withholding tax on the dividends the Hong Kong resident enterprise receives from a PRC resident enterprise may be reduced to 5% upon receiving approval from the competent tax authority.
According to the Notice on Lifting the Restriction to Foreign Shareholding Percentage in Online Data Processing and Transaction Processing Business (Operational E-commerce) promulgated by the Ministry of Industry and Information Technology on June 19, 2015, foreign investors are allowed to hold up to 100% of the equity interest in the online data processing and transaction processing business (operational e-commerce) in mainland China, while other requirements provided by the Provisions on Administration of Foreign-Invested Telecommunications Enterprises still apply.
According to the Notice on Lifting the Restriction to Foreign Shareholding Percentage in Online Data Processing and Transaction Processing Business (Operational E-commerce) promulgated by the Ministry of Industry and Information Technology on June 19, 2015, foreign investors are allowed to hold up to 100% of the equity interest in the online data processing and transaction processing business (operational e-commerce) in Chinese mainland, while other requirements provided by the Provisions on Administration of Foreign-Invested Telecommunications Enterprises still apply.
The PRC Advertising Law sets forth certain content requirements for advertisements including, among other things, prohibitions on false or misleading content, superlative wording, socially destabilizing content or content involving obscenities, superstition, violence, discrimination or infringement of the public interest. 84 Table of Contents The State Administration for Market Regulation issued the Administrative Measures for Internet Advertising, which came into effect on May 1, 2023.
The PRC Advertising Law sets forth certain content requirements for advertisements including, among other things, prohibitions on false or misleading content, superlative wording, socially destabilizing content or content involving obscenities, superstition, violence, discrimination or infringement of the public interest. 86 Table of Contents The State Administration for Market Regulation issued the Administrative Measures for Internet Advertising, which came into effect on May 1, 2023.
In addition, any failure to comply with PRC regulations with respect to registration requirements for offshore financing may subject us to legal or administrative sanctions.” 94 Table of Contents Regulation Related to Stock Incentive Plans On February 15, 2012, SAFE promulgated the Notice on Foreign Exchange Administration of PRC Residents Participating in Share Incentive Plans of Offshore Listed Companies.
In addition, any failure to comply with PRC regulations with respect to registration requirements for offshore financing may subject us to legal or administrative sanctions.” 96 Table of Contents Regulation Related to Stock Incentive Plans On February 15, 2012, SAFE promulgated the Notice on Foreign Exchange Administration of PRC Residents Participating in Share Incentive Plans of Offshore Listed Companies.
Operating Results—Taxation—Mainland China.” Dividend Withholding Tax The PRC Enterprise Income Tax Law provides that since January 1, 2008, an income tax rate of 10% will normally be applicable to dividends declared to non-PRC resident investors that do not have an establishment or place of business in mainland China, or that have such establishment or place of business but the relevant income is not effectively connected with the establishment or place of business, to the extent such dividends are derived from sources within mainland China. 96 Table of Contents Pursuant to the Arrangement Between Mainland China and Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and Capital and other applicable PRC laws, if a Hong Kong resident enterprise is determined by the competent PRC tax authority to have met the conditions and requirements under this arrangement and other applicable laws, the 10% withholding tax on the dividends the Hong Kong resident enterprise receives from a PRC resident enterprise may be reduced to 5%.
Operating Results—Taxation—Chinese mainland.” Dividend Withholding Tax The PRC Enterprise Income Tax Law provides that since January 1, 2008, an income tax rate of 10% will normally be applicable to dividends declared to non-PRC resident investors that do not have an establishment or place of business in Chinese mainland, or that have such establishment or place of business but the relevant income is not effectively connected with the establishment or place of business, to the extent such dividends are derived from sources within Chinese mainland. 98 Table of Contents Pursuant to the Arrangement Between Chinese mainland and Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and Capital and other applicable PRC laws, if a Hong Kong resident enterprise is determined by the competent PRC tax authority to have met the conditions and requirements under this arrangement and other applicable laws, the 10% withholding tax on the dividends the Hong Kong resident enterprise receives from a PRC resident enterprise may be reduced to 5%.
Risk Factors—Risks Related to Doing Business in China—The approval of the CSRC or other PRC government authorities may be required in connection with our future offerings under PRC laws and regulations, and if required, we cannot predict whether or for how long we will be able to obtain such approval.” 99 Table of Contents C.
Risk Factors—Risks Related to Doing Business in China—The approval of the CSRC or other PRC government authorities may be required in connection with our future offerings under PRC laws and regulations, and if required, we cannot predict whether or for how long we will be able to obtain such approval.” 101 Table of Contents C.
Risk Factors—Risks Related to Doing Business in China—The M&A Rules and certain other PRC regulations may make it more difficult for us to pursue growth through acquisitions.” Regulations on Chemical Industry Regulations on the Safety Management of Hazardous Chemicals Under the Regulations on the Safety Management of Hazardous Chemicals, which was promulgated by the State Council and was last amended on December 6, 2024, enterprises engaged in production, storage, usage, operation and transportation of hazardous chemicals are required to obtain permits and meet the safety conditions under laws, administrative regulations, national standards and industrial standards.
Risk Factors—Risks Related to Doing Business in China—The M&A Rules and certain other PRC regulations may make it more difficult for us to pursue growth through acquisitions.” 82 Table of Contents Regulations on Chemical Industry Regulations on the Safety Management of Hazardous Chemicals Under the Regulations on the Safety Management of Hazardous Chemicals, which was promulgated by the State Council and was last amended on December 6, 2024, enterprises engaged in production, storage, usage, operation and transportation of hazardous chemicals are required to obtain permits and meet the safety conditions under laws, administrative regulations, national standards and industrial standards.
Regulations Related to Foreign Investment The establishment, operation and management of corporate entities in mainland China, including foreign-invested companies, are subject to the PRC Company Law, which was issued by the Standing Committee of the National People’s Congress on December 29, 1993. The PRC Company Law was last amended on December 29, 2023, with effect from July 1, 2024.
Regulations Related to Foreign Investment The establishment, operation and management of corporate entities in Chinese mainland, including foreign-invested companies, are subject to the PRC Company Law, which was issued by the Standing Committee of the National People’s Congress on December 29, 1993. The PRC Company Law was last amended on December 29, 2023, with effect from July 1, 2024.
Risk Factors—Risks Related to Doing Business in China—Governmental control of currency conversion may limit our ability to utilize our income effectively and affect the value of your investment.” ​ 93 Table of Contents Regulation on Dividend Distribution The principal regulations governing distribution of dividends of foreign-invested enterprises is the PRC Company Law.
Risk Factors—Risks Related to Doing Business in China—Governmental control of currency conversion may limit our ability to utilize our income effectively and affect the value of your investment.” ​ 95 Table of Contents Regulation on Dividend Distribution The principal regulations governing distribution of dividends of foreign-invested enterprises is the PRC Company Law.
We believe our market leadership roots in our ability to efficiently curate and timely deliver superior products optimally aligned with our customers’ demands through a transparent, intuitive, and intelligent procurement experience. We provide MRO procurement solutions to a large, diversified and loyal customer base mainly through our two major online platforms, the ZKH platform and the GBB platform .
We believe our market leadership roots in our ability to efficiently curate and timely deliver superior products optimally aligned with our customers’ demands through a transparent, intuitive, and intelligent procurement experience. We provide MRO procurement solutions to a large, diversified and loyal customer base mainly through our two major online platforms in China, ZKH platform and GBB platform .
However, according to the Circular on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties, if the tax authorities of mainland China determine, in their discretions, that a company benefits from such reduced income tax rate due to a structure or arrangement that is primarily tax-driven, such tax authorities of mainland China may adjust the preferential tax treatment.
However, according to the Circular on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties, if the tax authorities of Chinese mainland determine, in their discretions, that a company benefits from such reduced income tax rate due to a structure or arrangement that is primarily tax-driven, such tax authorities of Chinese mainland may adjust the preferential tax treatment.
In addition, pursuant to the PRC Anti-monopoly Law and related regulations, entering into monopolistic agreements, which means agreements or concerted practices to eliminate or restrict competition, is prohibited, unless such agreements satisfy the specific exemptions prescribed therein, such as improving technologies or increasing the efficiency and competitiveness of small and medium-sized undertakings.
In addition, pursuant to the PRC Anti-monopoly Law and related regulations, entering into monopolistic agreements, which means agreements or concerted practices to eliminate or restrict competition, is prohibited, unless such agreements satisfy the specific exemptions prescribed therein, such as improving technologies or increasing the efficiency and competitiveness of small-and mid-sized undertakings.
According to the Eight Measures for the Public Security Fire Department to Deepen Reform and Serve Economic and Social Development promulgated by the Ministry of Public Security of the PRC in August 2015, the filing of fire protection design and completion acceptance with respect to fire protection of construction projects with an investment of less than RMB300,000 or a building area of less than 300 square meters (or below the limit set by the housing and urban construction department of the provincial people’s government) was no longer required. ​ 92 Table of Contents Regulation Related to Foreign Exchange and Dividend Distribution Regulation on Foreign Currency Exchange The principal regulations governing foreign currency exchange in mainland China are the Foreign Exchange Administration Regulations, which became effective on April 1, 1996 and was last amended on August 5, 2008.
According to the Eight Measures for the Public Security Fire Department to Deepen Reform and Serve Economic and Social Development promulgated by the Ministry of Public Security of the PRC in August 2015, the filing of fire protection design and completion acceptance with respect to fire protection of construction projects with an investment of less than RMB300,000 or a building area of less than 300 square meters (or below the limit set by the housing and urban construction department of the provincial people’s government) was no longer required. 94 Table of Contents Regulation Related to Foreign Exchange and Dividend Distribution Regulation on Foreign Currency Exchange The principal regulations governing foreign currency exchange in Chinese mainland are the Foreign Exchange Administration Regulations, which became effective on April 1, 1996 and was last amended on August 5, 2008.
For hazardous chemicals, we rely on third-party warehouses who hold requisite licenses and permits to manage and store the inventory in mainland China. We expect these third-party warehouses to strictly comply with PRC laws and regulations, and follow our standards and policies to store, maintain, and manage the hazardous chemicals and deliver quality fulfillment services to meet our customers’ needs.
For hazardous chemicals, we rely on third-party warehouses who hold requisite licenses and permits to manage and store the inventory in Chinese mainland. We expect these third-party warehouses to strictly comply with PRC laws and regulations, and follow our standards and policies to store, maintain, and manage the hazardous chemicals and deliver quality fulfillment services to meet our customers’ needs.
Operating and Financial Review and Prospectus—A. Operating Results—Taxation—Mainland China.” Value-added Tax and Business Tax Pursuant to PRC tax regulations, an entity or individual conducting business in the service industry is generally required to pay a business tax at the rate of 5% on the revenues generated from providing such services.
Operating and Financial Review and Prospectus—A. Operating Results—Taxation—Chinese mainland.” Value-added Tax and Business Tax Pursuant to PRC tax regulations, an entity or individual conducting business in the service industry is generally required to pay a business tax at the rate of 5% on the revenues generated from providing such services.
MROProcure Agent takes the form of an intuitive chatbot integrated with multiple platforms and assists our customer on a 24-7 basis . MRO Procure Agent excels in offering a seamless experience across multiple domains, including product recommendations, intelligent customer support, logistics tracking, order management, and knowledge-based Q&A.
MROProcure Agent takes the form of an intuitive chatbot integrated with multiple platforms and assists our customer on a 24-7 basis. MROProcure Agent excels in offering a seamless experience across multiple domains, including product recommendations, intelligent customer support, logistics tracking, order management, and knowledge-based Q&A.
Regulation Related to Intellectual Property Patent Patents in mainland China are principally protected under the PRC Patent Law, which became effective on April 1, 1985 and was last amended on June 1, 2021, and the Implementation Rules of the PRC Patent Law, which was promulgated by the State Council on June 15, 2001 and last amended on January 20, 2024.
Regulation Related to Intellectual Property Patent Patents in Chinese mainland are principally protected under the PRC Patent Law, which became effective on April 1, 1985 and was last amended on June 1, 2021, and the Implementation Rules of the PRC Patent Law, which was promulgated by the State Council on June 15, 2001 and last amended on January 20, 2024.
On February 7, 2021, the Anti-monopoly Commission of the State Council published Anti-Monopoly Guidelines for the Internet Platform Economy Sector, which specify circumstances where an activity of an internet platform will be identified as monopolistic act as well as merger controlling filing procedures, which may be applicable to our mainland China subsidiaries.
On February 7, 2021, the Anti-monopoly Commission of the State Council published Anti-Monopoly Guidelines for the Internet Platform Economy Sector, which specify circumstances where an activity of an internet platform will be identified as monopolistic act as well as merger controlling filing procedures, which may be applicable to our Chinese mainland subsidiaries.
We hold the licenses and permits to sell and distribute chemicals, including Hazardous Chemicals Operation License (Excluding Storage Facilities) and Certification for the Production and Operation of Precursor Chemicals (Class 3). 74 Table of Contents Warehouse Automation We launched our first automated warehouse for the fasteners’ product line in Shanghai, China in March 2024.
We hold the licenses and permits to sell and distribute chemicals, including Hazardous Chemicals Operation License (Excluding Storage Facilities) and Certification for the Production and Operation of Precursor Chemicals (Class 3). 76 Table of Contents Warehouse Automation We launched our first automated warehouse for the fasteners’ product line in Shanghai, China in March 2024.
By contrast, approval from or registration with appropriate government authorities is required where Renminbi is to be converted into foreign currency and remitted out of mainland China to pay capital account items, such as direct investments, repayment of foreign currency-denominated loans, repatriation of investments and investments in securities outside of mainland China.
By contrast, approval from or registration with appropriate government authorities is required where Renminbi is to be converted into foreign currency and remitted out of Chinese mainland to pay capital account items, such as direct investments, repayment of foreign currency-denominated loans, repatriation of investments and investments in securities outside of Chinese mainland.
Furthermore, the measures provide that, if foreign investors or relevant parties in mainland China intend to invest in crucial information technology and internet products and services, or in crucial financial services, or in other crucial fields which relate to national security, they shall apply to the office in advance for a security review.
Furthermore, the measures provide that, if foreign investors or relevant parties in Chinese mainland intend to invest in crucial information technology and internet products and services, or in crucial financial services, or in other crucial fields which relate to national security, they shall apply to the office in advance for a security review.
Foreign investors shall comply with the M&A Rules when purchasing equity interests in a domestic company or subscribe the increased capital of a domestic company, which results in changing the nature of the domestic company into a foreign-invested enterprise; or when the foreign investors establish a foreign-invested enterprise in mainland China and purchase the assets of a domestic company and operate the assets; or when the foreign investors purchase the asset of a domestic company and establish a foreign-invested enterprise by injecting such assets and operate the assets.
Foreign investors shall comply with the M&A Rules when purchasing equity interests in a domestic company or subscribe the increased capital of a domestic company, which results in changing the nature of the domestic company into a foreign-invested enterprise; or when the foreign investors establish a foreign-invested enterprise in Chinese mainland and purchase the assets of a domestic company and operate the assets; or when the foreign investors purchase the asset of a domestic company and establish a foreign-invested enterprise by injecting such assets and operate the assets.
Investments in mainland China by foreign investors and foreign-invested enterprises are regulated by the Catalog of Industries in which Foreign Investment is Encouraged (2022 edition), which became effective on January 1, 2023, and the Special Administrative Measures for Foreign Investment Access (Negative List 2024), or the 2024 Negative List, which became effective on November 1, 2024.
Investments in Chinese mainland by foreign investors and foreign-invested enterprises are regulated by the Catalog of Industries in which Foreign Investment is Encouraged (2022 edition), which became effective on January 1, 2023, and the Special Administrative Measures for Foreign Investment Access (Negative List 2024), or the 2024 Negative List, which became effective on November 1, 2024.
We had five major product categories consisting of 32 product lines available on our platform as of December 31, 2024 as follows. ● Equipment parts : including, without limitation, pump valve fittings, low voltage electrical, electric automation, wire and cable, fastening seal, pneumatics & hydraulics, and instrumentation; ● Chemicals : including, without limitation, workshop chemicals, chemical reagent, lubricant, paint & painting supplies, and adhesives; ● Manufacturing parts : including, without limitation, cutting tool, air compressor, electronic vending machine, factory automation, and abrasive measuring tool; ● General consumables : including, without limitation, security-related products, material handling, power transmission, personal protective equipment, welding, tape & label, cleaning supplies, laboratory instrument consumables, and hardware & hand tools; ● Office supplies : including, without limitation, office supplies, furniture, fringe benefit, lightening, refrigeration & heating, ventilating, air conditioning, and building materials.
We had five major product categories consisting of 32 product lines available on our platform as of December 31, 2025 as follows. ● Equipment parts : including, without limitation, pump valve fittings, low voltage electrical, electric automation, wire and cable, fastening seal, pneumatics & hydraulics, and instrumentation; ● Chemicals : including, without limitation, workshop chemicals, chemical reagent, lubricant, paint & painting supplies, and adhesives; ● Manufacturing parts : including, without limitation, cutting tool, air compressor, electronic vending machine, factory automation, and abrasive measuring tool; 72 Table of Contents ● General consumables : including, without limitation, security-related products, material handling, power transmission, personal protective equipment, welding, tape & label, cleaning supplies, laboratory instrument consumables, and hardware & hand tools; ● Office supplies : including, without limitation, office supplies, furniture, fringe benefit, lightening, refrigeration & heating, ventilating, air conditioning, and building materials.
In case of serious violations, the operator’s websites may be ordered to be closed. The PRC Telecommunications Regulations categorize all telecommunication services in mainland China as either basic telecommunications services or value-added telecommunications services, and value-added telecommunications services are defined as telecommunications and information services provided through public network infrastructures.
In case of serious violations, the operator’s websites may be ordered to be closed. The PRC Telecommunications Regulations categorize all telecommunication services in Chinese mainland as either basic telecommunications services or value-added telecommunications services, and value-added telecommunications services are defined as telecommunications and information services provided through public network infrastructures.
This circular allows non-investment foreign-invested enterprises to use their capital funds to make equity investments in mainland China as long as such investments do not violate the Negative List and the target investment projects are genuine and in compliance with laws.
This circular allows non-investment foreign-invested enterprises to use their capital funds to make equity investments in Chinese mainland as long as such investments do not violate the Negative List and the target investment projects are genuine and in compliance with laws.
The preferential tax treatment continues as long as an enterprise can retain its “High and New Technology Enterprise” status. ​ 95 Table of Contents The PRC Enterprise Income Tax Law and the implementation rules provide that an income tax rate of 10% should normally be applicable to dividends payable to investors that are “non-resident enterprises,” and gains derived by such investors, which (i) do not have an establishment or place of business in mainland China, or (ii) have an establishment or place of business in mainland China, but the relevant income is not effectively connected with the establishment or place of business to the extent such dividends and gains are derived from sources within mainland China.
The preferential tax treatment continues as long as an enterprise can retain its “High and New Technology Enterprise” status. ​ 97 Table of Contents The PRC Enterprise Income Tax Law and the implementation rules provide that an income tax rate of 10% should normally be applicable to dividends payable to investors that are “non-resident enterprises,” and gains derived by such investors, which (i) do not have an establishment or place of business in Chinese mainland, or (ii) have an establishment or place of business in Chinese mainland, but the relevant income is not effectively connected with the establishment or place of business to the extent such dividends and gains are derived from sources within Chinese mainland.
The Measures for the Supervision and Administration of the Operation of Medical Devices, which became effective on October 1, 2014 and was last amended on May 1, 2022, regulates the business activities involving medical devices in mainland China. Business activities involving medical devices are regulated in accordance with risk levels of the medical devices.
The Measures for the Supervision and Administration of the Operation of Medical Devices, which became effective on October 1, 2014 and was last amended on May 1, 2022, regulates the business activities involving medical devices in Chinese mainland. Business activities involving medical devices are regulated in accordance with risk levels of the medical devices.
Copyright Copyright in mainland China, including copyrighted software, is principally protected under the PRC Copyright Law and related rules and regulations. Under the PRC Copyright Law, which became effective on June 1, 1991 and was last amended on June 1, 2021, the term of protection for copyrighted software is 50 years.
Copyright Copyright in Chinese mainland, including copyrighted software, is principally protected under the PRC Copyright Law and related rules and regulations. Under the PRC Copyright Law, which became effective on June 1, 1991 and was last amended on June 1, 2021, the term of protection for copyrighted software is 50 years.
As required by PRC law and regulations, we participate in various employee social security plans that are organized by municipal and provincial governments for our employees in mainland China, including pension, unemployment insurance, childbirth insurance, work-related injury insurance and medical insurance.
As required by PRC law and regulations, we participate in various employee social security plans that are organized by municipal and provincial governments for our employees in Chinese mainland, including pension, unemployment insurance, childbirth insurance, work-related injury insurance and medical insurance.
The Standing Committee of the National People’s Congress promulgated the PRC Cybersecurity Law, which became effective on June 1, 2017 and is applicable to the construction, operation, maintenance and use of networks as well as the supervision and administration of cybersecurity in mainland China.
The Standing Committee of the National People’s Congress promulgated the PRC Cybersecurity Law, which became effective on June 1, 2017 and is applicable to the construction, operation, maintenance and use of networks as well as the supervision and administration of cybersecurity in Chinese mainland.
We provide a transparent and efficient one-stop MRO procurement experience, advanced digital solutions along with intelligent services powered by AI, effective fulfillment services, broad product offerings, and sales and service representatives with deep industry insights. 77 Table of Contents We believe that we are well-positioned to effectively compete on the basis of the factors listed above.
We provide a transparent and efficient one-stop MRO procurement experience, advanced digital solutions along with intelligent services powered by AI, effective fulfillment services, broad product offerings, and sales and service representatives with deep industry insights. We believe that we are well-positioned to effectively compete on the basis of the factors listed above.
Long Chen, had experienced these industry pain points first-hand and identified enormous opportunities in China’s MRO segment, the transaction infrastructure of which was in great need of a comprehensive digital transformation. 71 Table of Contents We have a successful track record of providing MRO procurement and management services to various value chain participant digitally.
Long Chen, had experienced these industry pain points first-hand and identified enormous opportunities in China’s MRO segment, the transaction infrastructure of which was in great need of a comprehensive digital transformation. We have a successful track record of providing MRO procurement and management services to various value chain participant digitally.
Regulation This section sets forth a summary of the significant laws, rules and regulations that affect our business activities in mainland China and our shareholders’ rights to receive dividends and other distributions from us.
Regulation This section sets forth a summary of the significant laws, rules and regulations that affect our business activities in Chinese mainland and our shareholders’ rights to receive dividends and other distributions from us.
The PRC Data Security Law is applicable to both data processing activities carried out within the territory of mainland China and data processing activities carried out outside mainland China that may harm the national security, public interests or the legitimate rights and interests of citizens or organizations of mainland China.
The PRC Data Security Law is applicable to both data processing activities carried out within the territory of Chinese mainland and data processing activities carried out outside Chinese mainland that may harm the national security, public interests or the legitimate rights and interests of citizens or organizations of Chinese mainland.
The PRC Personal Information Protection Law applies to personal information processing activities within mainland China, as well as processing activities outside mainland China that are purposed to provide any product or service to any natural person within mainland China or analyze or assess the behavior of that natural person within mainland China.
The PRC Personal Information Protection Law applies to personal information processing activities within Chinese mainland, as well as processing activities outside Chinese mainland that are purposed to provide any product or service to any natural person within Chinese mainland or analyze or assess the behavior of that natural person within Chinese mainland.
This circular regulates foreign exchange matters in relation to the use of special purpose vehicles by PRC residents or entities to seek offshore investment and financing or conduct round trip investment in mainland China.
This circular regulates foreign exchange matters in relation to the use of special purpose vehicles by PRC residents or entities to seek offshore investment and financing or conduct round trip investment in Chinese mainland.
Our industry-leading agentic AIs like PriceCompare Agent and ProductRecom Agent optimize product offerings by delivering competitive pricing and precise product recommendations, while MRO Procure Agent and AI Material Management Agent revolutionize the procurement workflows by automating labor-intensive procurement tasks, standardizing disjointed supplies management protocols, and integrating complex data into intuitive, customer-friendly catalogues.
Our industry-leading agentic AIs like ProductRecom Agent optimize product offerings by delivering precise product recommendations, while MRO Procure Agent and AI Material Management Agent revolutionize the procurement workflows by automating labor-intensive procurement tasks, standardizing disjointed supplies management protocols, and integrating complex data into intuitive, customer-friendly catalogues.
We have also established stringent internal protocols, under which we grant classified access to confidential data only to limited employees with access authorization. We back up our core data on a real-time basis and other data on a daily basis in separate and various secured data back-up systems to minimize the risk of data loss.
We have also established stringent internal protocols, under which we grant classified access to confidential data only to limited employees with access authorization. 79 Table of Contents We back up our core data on a real-time basis and other data on a daily basis in separate and various secured data back-up systems to minimize the risk of data loss.
Under these laws and regulations, foreign-invested enterprises in mainland China may pay dividends only out of their accumulated after-tax profits, if any, determined in accordance with accounting standards in mainland China and regulations.
Under these laws and regulations, foreign-invested enterprises in Chinese mainland may pay dividends only out of their accumulated after-tax profits, if any, determined in accordance with accounting standards in Chinese mainland and regulations.
In addition, the mainland China agent is required to amend the SAFE registration with respect to the stock incentive plan if there is any material change to the stock incentive plan, the mainland China agent or the overseas entrusted institution or other material changes.
In addition, the Chinese mainland agent is required to amend the SAFE registration with respect to the stock incentive plan if there is any material change to the stock incentive plan, the Chinese mainland agent or the overseas entrusted institution or other material changes.
PRC resident enterprises typically pay an enterprise income tax at the rate of 25% while non-PRC resident enterprises without any branches in mainland China should pay an enterprise income tax in connection with their income from mainland China at the tax rate of 10%.
PRC resident enterprises typically pay an enterprise income tax at the rate of 25% while non-PRC resident enterprises without any branches in Chinese mainland should pay an enterprise income tax in connection with their income from Chinese mainland at the tax rate of 10%.
Our large to mid-size enterprise customers value superior price-to-performance ratios and rely on our comprehensive offerings and cutting-edge AI tools to optimize products sourcing. In addition to MRO products, we provide value-added MRO procurement and management services that streamline complicated, laborious enterprise procurement process for enterprise customers.
Our large to small - and mid-sized enterprise customers value superior price-to-performance ratios and rely on our comprehensive offerings and cutting-edge AI tools to optimize products sourcing. In addition to MRO products, we provide value-added MRO procurement and management services that streamline complicated, laborious enterprise procurement process for enterprise customers.
For a detailed description of our product offerings, see “—Our Product-Led Approach.” Our one-stop MRO procurement solutions are further powered by various innovative agentic AI tools that aims to revolutionize customer experience and address industry pain points.
For a detailed description of our product offerings, see “—Our Product-Led Approach.” Our one-stop MRO procurement solutions are further powered by various innovative agentic AI tools that aims to revolutionize customer experience and address industry pain points. See “Agentic AI-powered MRO Procurement Solutions” for details.
Built on advanced AI models and a comprehensive MRO industry knowledge base, MROProcure Agent , our full life-cycle support AI agent, delivers an intelligent, autonomous alternative to the traditional procurement experience by automating the MRO procurement process and reducing the need for extensive manual intervention.
Built on advanced MRO vertical AI model and a comprehensive MRO industry knowledge base, MROProcure Agent , our full life-cycle support AI agent, delivers an intelligent, autonomous alternative to the traditional procurement experience by automating the MRO procurement process and reducing the need for extensive manual intervention.

… 188 more changes not shown on this page.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

94 edited+3 added−17 removed64 unchanged
Risk Factors—Risks Related to Doing Business in China—PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from making loans or additional capital contribution to our mainland China subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business.” We expect that substantially all of our future revenues will be denominated in Renminbi for the foreseeable future.
Risk Factors—Risks Related to Doing Business in China—PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from making loans or additional capital contribution to our Chinese mainland subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business.” We expect that substantially all of our future revenues will be denominated in Renminbi for the foreseeable future.
As GBB customers generally use cash settlement with no credit term and most of them are trading companies which will resell the products procured on our platform, we generally set prices on our GBB platform to be lower than our ZKH platform , which explains the higher gross margin of our ZKH platform . 102 Table of Contents Our cost of revenues primarily consists of purchase price of products under our product sales model, and also includes inbound shipping charges and write-downs of inventories.
As GBB customers generally use cash settlement with no credit term and most of them are trading companies which will resell the products procured on our platform, we generally set prices on our GBB platform to be lower than our ZKH platform , which explains the higher gross margin of our ZKH platform . 104 Table of Contents Our cost of revenues primarily consists of purchase price of products under our product sales model, and also includes inbound shipping charges and write-downs of inventories.
Risk Factors—Risks Related to Doing Business in China—If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders or ADS holders.” 107 Table of Contents Results of Operations The following table sets forth a summary of our consolidated results of operations for the years presented, both in absolute amount and as a percentage of our total net revenues for the years presented.
Risk Factors—Risks Related to Doing Business in China—If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders or ADS holders.” ​ 109 Table of Contents Results of Operations The following table sets forth a summary of our consolidated results of operations for the years presented, both in absolute amount and as a percentage of our total net revenues for the years presented.
Under our marketplace model, suppliers sell products to customers over our platform and pay us commissions on their sales. Net service revenues consist of such commissions earned from suppliers for sales made through our platform.
Under our marketplace model, suppliers sell products to customers over our platform and pay us commissions on sales. Net service revenues consist of such commissions earned from suppliers for sales made through our platform.
Our product sales model contributes the majority of our revenues. Under our product sales model, we purchase products from suppliers and sell them to our customers. Under our marketplace model, suppliers sell products to customers over our platform and pay us commissions on their sales.
Our product sales model contributes the majority of our revenues. Under our product sales model, we purchase products from suppliers and sell them to our customers. Under our marketplace model, suppliers sell products to customers over our platform and pay us commissions on sales.
Dividends paid by our wholly foreign-owned subsidiary in mainland China to our intermediary holding company in Hong Kong will be subject to a withholding tax rate of 10%, unless the Hong Kong entity satisfies all the requirements under the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and receives approval from the tax authority.
Dividends paid by our wholly foreign-owned subsidiary in Chinese mainland to our intermediary holding company in Hong Kong will be subject to a withholding tax rate of 10%, unless the Hong Kong entity satisfies all the requirements under the Arrangement between Chinese mainland and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and receives approval from the tax authority.
Critical Accounting Estimates An accounting estimate is considered critical if it requires to be made based on assumptions about matters that are highly uncertain at the time such estimate is made, and if different accounting estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the consolidated financial statements. 115 Table of Contents We prepare our financial statements in conformity with U.S.
Critical Accounting Estimates An accounting estimate is considered critical if it requires to be made based on assumptions about matters that are highly uncertain at the time such estimate is made, and if different accounting estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the consolidated financial statements. 117 Table of Contents We prepare our financial statements in conformity with U.S.
Remittance of dividends by a wholly foreign-owned company out of mainland China is subject to examination by the banks designated by SAFE. Our mainland China subsidiaries have not paid dividends and will not be able to pay dividends until they generate accumulated profits and meet the requirements for statutory reserve funds. C. Research and Development, Patents and Licenses, etc.
Remittance of dividends by a wholly foreign-owned company out of Chinese mainland is subject to examination by the banks designated by SAFE. Our Chinese mainland subsidiaries have not paid dividends and will not be able to pay dividends until they generate accumulated profits and meet the requirements for statutory reserve funds. C. Research and Development, Patents and Licenses, etc.
Accounts payable turnover days on a GMV basis for a given period are equal to the average of the accounts payable and notes payable at the beginning and the end of the period divided by cost of GMV, which is equal to GMV minus gross profit, during the period and then multiplied by the number of days during the period. 112 Table of Contents Our net accounts receivable primarily includes amounts due from customers.
Accounts payable turnover days on a GMV basis for a given period are equal to the average of the accounts payable and notes payable at the beginning and the end of the period divided by cost of GMV, which is equal to GMV minus gross profit, during the period and then multiplied by the number of days during the period. 114 Table of Contents Our net accounts receivable primarily includes amounts due from customers.
We will continue to optimize our inventory management via system integration with more suppliers, the usage of direct shipping in more orders and the reduction of secondary transport movements from warehouses to customers as appropriate. 103 Table of Contents Key Components of Results of Operations Revenues Our net revenues are comprised of net product revenues, net service revenues and other revenues.
We will continue to optimize our inventory management via system integration with more suppliers, the usage of direct shipping in more orders and the reduction of secondary transport movements from warehouses to customers as appropriate. 105 Table of Contents Key Components of Results of Operations Revenues Our net revenues are comprised of net product revenues, net service revenues and other revenues.
If our holding company in the Cayman Islands or any of our subsidiaries outside of mainland China were deemed to be a “resident enterprise” under the PRC Enterprise Income Tax Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%. See “Item 3. Key Information—D.
If our holding company in the Cayman Islands or any of our subsidiaries outside of Chinese mainland were deemed to be a “resident enterprise” under the PRC Enterprise Income Tax Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%. See “Item 3. Key Information—D.
Other than as discussed above, we did not have any significant capital and other commitments as of December 31, 2024. We intend to fund our future material cash requirements with our existing cash balance and other financing alternatives. We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties.
Other than as discussed above, we did not have any significant capital and other commitments as of December 31, 2025. We intend to fund our future material cash requirements with our existing cash balance and other financing alternatives. We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties.
In addition, our wholly foreign owned subsidiaries in mainland China may allocate a portion of their after-tax profits based on accounting standards in mainland China to enterprise expansion funds and staff bonus and welfare funds at their discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends.
In addition, our wholly foreign owned subsidiaries in Chinese mainland may allocate a portion of their after-tax profits based on accounting standards in Chinese mainland to enterprise expansion funds and staff bonus and welfare funds at their discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends.
British Virgin Islands Under the current laws of the British Virgin Islands, entities incorporated in the British Virgin Islands are not subject to tax on their income or capital gains. 106 Table of Contents Hong Kong Under the current Hong Kong Inland Revenue Ordinance, our subsidiaries incorporated in Hong Kong are subject to 16.5% Hong Kong profit tax on their taxable income generated from operations in Hong Kong.
British Virgin Islands Under the current laws of the British Virgin Islands, entities incorporated in the British Virgin Islands are not subject to tax on their income or capital gains. 108 Table of Contents Hong Kong Under the current Hong Kong Inland Revenue Ordinance, our subsidiaries incorporated in Hong Kong are subject to 16.5% Hong Kong profit tax on their taxable income generated from operations in Hong Kong.
Additionally, payments of dividends by our subsidiaries incorporated in Hong Kong are not subject to any Hong Kong withholding tax. Mainland China Generally, our subsidiaries incorporated in mainland China are subject to enterprise income tax on their worldwide taxable income as determined under PRC tax laws and accounting standards at a rate of 25%.
Additionally, payments of dividends by our subsidiaries incorporated in Hong Kong are not subject to any Hong Kong withholding tax. Chinese mainland Generally, our subsidiaries incorporated in Chinese mainland are subject to enterprise income tax on their worldwide taxable income as determined under PRC tax laws and accounting standards at a rate of 25%.
As a Cayman Islands exempted company and offshore holding company, we are permitted under PRC laws and regulations to provide funding to our mainland China subsidiaries only through loans or capital contributions, subject to the approval or registration of government authorities and limits on the amount of capital contributions and loans.
As a Cayman Islands exempted company and offshore holding company, we are permitted under PRC laws and regulations to provide funding to our Chinese mainland subsidiaries only through loans or capital contributions, subject to the approval or registration of government authorities and limits on the amount of capital contributions and loans.
Under laws and regulations in mainland China, each of our mainland China subsidiaries is required to set aside at least 10% of its after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of their registered capital.
Under laws and regulations in Chinese mainland, each of our Chinese mainland subsidiaries is required to set aside at least 10% of its after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of their registered capital.
This may delay us from using the proceeds from our initial public offering to make loans or capital contributions to our mainland China subsidiaries. However, most of these uses are subject to PRC regulations. See “Item 3. Key Information—D.
This may delay us from using the proceeds from our initial public offering to make loans or capital contributions to our Chinese mainland subsidiaries. However, most of these uses are subject to PRC regulations. See “Item 3. Key Information—D.
However, approval from or registration with competent government authorities is required where the Renminbi is to be converted into foreign currency and remitted out of mainland China to pay capital expenses such as the repayment of loans denominated in foreign currencies.
However, approval from or registration with competent government authorities is required where the Renminbi is to be converted into foreign currency and remitted out of Chinese mainland to pay capital expenses such as the repayment of loans denominated in foreign currencies.
Holding Company Structure ZKH Group Limited is a holding company with no material operations of its own. We conduct our operations primarily through our mainland China subsidiaries. As a result, the ability of ZKH Group Limited to pay dividends depends upon dividends paid by its mainland China subsidiaries.
Holding Company Structure ZKH Group Limited is a holding company with no material operations of its own. We conduct our operations primarily through our Chinese mainland subsidiaries. As a result, the ability of ZKH Group Limited to pay dividends depends upon dividends paid by its Chinese mainland subsidiaries.
Our cash denominated in U.S. dollars in 2024 mainly consisted of the proceeds from our initial public offering. Material cash requirements Our material cash requirements as of December 31, 2024 primarily include repayment of our revolving credit facilities, capital commitments and operating lease commitments.
Our cash denominated in U.S. dollars in 2025 mainly consisted of the proceeds from our initial public offering. Material cash requirements Our material cash requirements as of December 31, 2025 primarily include repayment of our revolving credit facilities, capital commitments and operating lease commitments.
In addition, the wholly foreign-owned subsidiaries in mainland China are permitted to pay dividends to ZKH Group Limited only out of its retained earnings, if any, as determined in accordance with accounting standards in mainland China and regulations.
In addition, the wholly foreign-owned subsidiaries in Chinese mainland are permitted to pay dividends to ZKH Group Limited only out of its retained earnings, if any, as determined in accordance with accounting standards in Chinese mainland and regulations.
If the existing subsidiaries in mainland China or any newly formed ones incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to ZKH Group Limited.
If the existing subsidiaries in Chinese mainland or any newly formed ones incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to ZKH Group Limited.
For the discussion covering items for the fiscal year ended December 31, 2023 and a comparison between the fiscal year ended December 31, 2023 and 2022, please refer to “Item 5. - Operating and Financial Review and Prospects - A.
For the discussion covering items for the fiscal year ended December 31, 2024 and a comparison between the fiscal year ended December 31, 2024 and 2023, please refer to “Item 5. - Operating and Financial Review and Prospects - A.
For the discussion covering items for the fiscal year ended December 31, 2023 and a comparison between the fiscal year ended December 31, 2023 and 2022, please refer to “Item 5. - Operating and Financial Review and Prospects - A.
For the discussion covering items for the fiscal year ended December 31, 2024 and a comparison between the fiscal year ended December 31, 2024 and 2023, please refer to “Item 5. - Operating and Financial Review and Prospects - A.
For the discussion covering items for the fiscal year ended December 31, 2023 and a comparison between the fiscal year ended December 31, 2023 and 2022, please refer to “Item 5. - Operating and Financial Review and Prospects - A.
For the discussion covering items for the fiscal year ended December 31, 2024 and a comparison between the fiscal year ended December 31, 2024 and 2023, please refer to “Item 5. - Operating and Financial Review and Prospects - A.
Therefore, our mainland China subsidiaries are allowed to pay dividends in foreign currencies to us without prior SAFE approval by following certain routine procedural requirements.
Therefore, our Chinese mainland subsidiaries are allowed to pay dividends in foreign currencies to us without prior SAFE approval by following certain routine procedural requirements.
In 2022, 2023 and 2024, we derived net product revenues from both our ZKH platform and our GBB platform , and a majority of net service revenues from our ZKH platform .
In 2023, 2024 and 2025, we derived net product revenues from both our ZKH platform and our GBB platform , and a majority of net service revenues from our ZKH platform .
We held cash denominated in U.S. dollars equivalent to RMB929.4 million, RMB737.1 million, RMB737.1 million and RMB680.6 million as of January 1, 2023, December 31, 2023, January 1, 2024 and December 31, 2024, respectively. Our cash denominated in U.S. dollars in 2023 mainly consisted of the proceeds from our initial public offering.
We held cash denominated in U.S. dollars equivalent to RMB737.1 million, RMB680.6 million, RMB680.6 million and RMB325.4 million as of January 1, 2024, December 31, 2024, January 1, 2025 and December 31, 2025, respectively. Our cash denominated in U.S. dollars in 2024 mainly consisted of the proceeds from our initial public offering.
The continued growth of our customer base depends on our ability to retain existing customers and acquire new customers. The number of our customers increased from over 58,000 in 2022 to over 66,000 in 2023, and further to over 83,000 in 2024.
The continued growth of our customer base depends on our ability to retain existing customers and acquire new customers. The number of our customers increased from over 66,000 in 2023 to over 83,000 in 2024, and further to over 155,000 in 2025.
Operating Results - Results of Operations” of our annual report on Form 20-F for the fiscal year ended December 31, 2023 filed with SEC on April 19, 2024. B.
Operating Results - Results of Operations” of our annual report on Form 20-F for the fiscal year ended December 31, 2024 filed with SEC on April 17, 2025. B.
Operating Results - Results of Operations” of our annual report on Form 20-F for the fiscal year ended December 31, 2023 filed with SEC on April 19, 2024.
Operating Results - Results of Operations” of our annual report on Form 20-F for the fiscal year ended December 31, 2024 filed with SEC on April 17, 2025.
Operating Results - Results of Operations” of our annual report on Form 20-F for the fiscal year ended December 31, 2023 filed with SEC on April 19, 2024.
Operating Results - Results of Operations” of our annual report on Form 20-F for the fiscal year ended December 31, 2024 filed with SEC on April 17, 2025.
Operating Results - Results of Operations” of our annual report on Form 20-F for the fiscal year ended December 31, 2023 filed with SEC on April 19, 2024.
Operating Results - Results of Operations” of our annual report on Form 20-F for the fiscal year ended December 31, 2024 filed with SEC on April 17, 2025.
Effect of exchange rate changes on cash, cash equivalents and restricted shares Exchange rate changes had an impact of RMB5.0 million and RMB15.5 million (US$2.1 million) on our cash, cash equivalent and restricted cash in 2023 and 2024, respectively, primarily due to the changes in the amounts of our cash denominated in U.S. dollars in 2023 and 2024 as well as fluctuations of the exchange rates of Renminbi against U.S. dollars in 2023 and 2024.
Effect of exchange rate changes on cash, cash equivalents and restricted shares Exchange rate changes had an impact of RMB15.5 million and negative RMB9.2 million (US$1.3 million) on our cash, cash equivalent and restricted cash in 2024 and 2025, respectively, primarily due to the changes in the amounts of our cash denominated in U.S. dollars in 2024 and 2025 as well as fluctuations of the exchange rates of Renminbi against U.S. dollars in 2024 and 2025.
Net product revenues. Our net product revenues were RMB8,449.5 million (US$1,157.6 million), representing an increase of 1.3% from RMB8,341.6 million in 2023. The increase was mainly attributable to higher revenues generated from the ZKH platform and the GBB platform , primarily driven by increased customer numbers. Net service revenues.
Net product revenues. Our net product revenues were RMB8,766.8 million (US$1,253.6 million), representing an increase of 3.8% from RMB8,449.5 million in 2024. The increase was mainly attributable to higher revenues generated from ZKH platform and GBB platform , primarily driven by increased customer numbers. Net service revenues.
Non-GAAP adjusted net loss margin was 1.8%, compared with 3.3% in 2023. Non-GAAP adjusted net profit/(loss) is defined as net profit/(loss) excluding share-based compensation expenses.
Non-GAAP adjusted net loss margin was 1.0%, compared with 1.8% in 2024. Non-GAAP adjusted net profit/(loss) is defined as net profit/(loss) excluding share-based compensation expenses.
As of December 31, 2022, 2023 and 2024, our cash, cash equivalents and restricted cash were RMB2,005.9 million, RMB1,250.4 million and RMB1,516.9 million (US$207.8 million). Our cash and cash equivalents consist of demand deposit, time deposits with original maturities less than three months and cash placed with banks and third-party payment processor, which are unrestricted as to withdrawal or use.
As of December 31, 2023, 2024 and 2025, our cash, cash equivalents and restricted cash were RMB1,250.4 million, RMB1,516.9 million and RMB1,092.4 million (US$156.2 million). Our cash and cash equivalents consist of demand deposit, time deposits with original maturities less than three months and cash placed with banks and third-party payment processor, which are unrestricted as to withdrawal or use.
Other revenues decreased by 7.0% from RMB72.2 million in 2023 to RMB67.1 million (US$9.2 million) in 2024, mainly attributable to lower revenues generated from our warehousing and logistic services and operating lease services for certain types of machinery and equipment.
Other revenues decreased by 25.9% from RMB67.1 million in 2024 to RMB49.7 million (US$7.1 million) in 2025, mainly attributable to lower revenues generated from our warehousing and logistic services and operating lease services for certain types of machinery and equipment.
We also track our accounts receivable turnover days on a GMV basis. Our accounts receivable turnover days on a GMV basis were 130.7 days in 2022, 124.7 days in 2023 and 132.2 days in 2024.
We also track our accounts receivable turnover days on a GMV basis. Our accounts receivable turnover days on a GMV basis were 124.7 days in 2023, 132.2 days in 2024 and 126.1 days in 2025.
The principal non-cash items affecting the difference between our net cash provided in operating activities and net loss were RMB54.8 million (US$7.5 million) in depreciation and amortization, RMB 108.5 million (US$14.9 million) in share-based compensation expenses and RMB48.9 million (US$6.7 million) in allowance for credit losses.
The principal non-cash items affecting the difference between our net cash provided by operating activities and net loss were RMB48.4 million (US$6.9 million) in depreciation and amortization, RMB53.8 million(US$7.7 million) in share-based compensation expenses and RMB32.9 million (US$4.7 million) in allowance for credit losses.
Our accounts payable turnover days on a GMV basis were 113.3 days in 2022, 103.1 days in 2023, and 110.9 days in 2024.
Our accounts payable turnover days on a GMV basis were 103.1 days in 2023, 110.9 days in 2024, and 111.1 days in 2025.
Inventories Inventories, primarily consisting of products available for sale, are stated at the lower of cost and net realizable value. Cost of inventories is determined using the weighted average cost method. Net realizable value is based on an analysis of slow-moving merchandise and damaged goods, which is dependent upon factors such as historical and forecasted consumer demand, and promotional environment.
Cost of inventories is determined using the weighted average cost method. Net realizable value is based on an analysis of slow-moving merchandise and damaged goods, which is dependent upon factors such as historical and forecasted consumer demand, and promotional environment.
Our fulfillment expenses decreased by 10.8% from RMB439.0 million in 2023 to RMB391.7 million (US$53.7 million) in 2024. This decrease was primarily attributable to lower employee benefit costs, warehouse rental costs, and distribution expenses. Fulfillment expenses as a percentage of net revenues were 4.5% in 2024, compared with 5.0% in 2023. Sales and marketing expenses.
The decrease was primarily attributable to lower warehouse rental costs and employee benefit expenses. Fulfillment expenses as a percentage of net revenues were 4.0% in 2025, compared with 4.5% in 2024. Sales and marketing expenses. Our sales and marketing expenses decreased by 8.8% from RMB641.5 million in 2024 to RMB585.0 million (US$83.7 million) in 2025.
Net service revenues decreased by 20.4% from RMB307.4 million in 2023 to RMB244.7 million (US$33.5 million) in 2024, primarily due to the optimization of certain businesses with low margins and long customer credit terms under the marketplace model. Other revenues.
Net service revenues decreased by 30.0% from RMB244.7 million in 2024 to RMB171.3 million (US$24.5 million) in 2025, primarily due to the optimization of certain businesses with low margins and long customer credit terms under the marketplace model. Other revenues.
Our operating margin, representing loss from operations as a percentage of net revenue, was -8.2%, -4.6%, and -3.9% in 2022, 2023 and 2024, respectively. 101 Table of Contents We incurred net loss of RMB731.1 million, RMB304.9 million and RMB268.0 million (US$36.7 million) in 2022, 2023 and 2024, respectively.
Our operating margin, representing loss from operations as a percentage of net revenue, was -4.6%, -3.9%, and -2.4% in 2023, 2024 and 2025, respectively. We incurred net loss of RMB304.9 million, RMB268.0 million and RMB139.7 million (US$20.0 million) in 2023, 2024 and 2025, respectively.
Our accounts payable turnover days (inclusive of notes payable) were 130.4 days in 2022, 136.6 days in 2023, and 137.2 days in 2024.
Our accounts payable turnover days (inclusive of notes payable) were 136.6 days in 2023, 137.2 days in 2024, and 128.1 days in 2025.
Our inventory turnover days on a GMV basis were 34.1 days in 2022, 26.7 days in 2023 and 28.6 days in 2024.
Our inventory turnover days on a GMV basis were 26.7 days in 2023, 28.6 days in 2024 and 29.2 days in 2025.
Our restricted cash consists primarily of pledged time deposit, security deposits held in designated bank accounts for issuance of supplier financial programs, bank acceptance and letter of guarantee. We believe that our current cash and cash equivalents will be sufficient to meet our anticipated working capital requirements and capital expenditures for at least the next 12 months.
Our restricted cash consists primarily of security deposits held in designated bank accounts for a currency exchange forward contract, payment guarantees and supplier financial programs. We believe that our current cash and cash equivalents will be sufficient to meet our anticipated working capital requirements and capital expenditures for at least the next 12 months.
Gross profit is calculated by subtracting cost of revenues from net revenues, and gross margin represents gross profit as a percentage of net revenues. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ ​ Gross ​ Gross ​ Gross ​ Gross ​ Gross ​ Gross ​ ​ Profit ​ Margin ​ Profit ​ Margin ​ Profit ​ Margin ​ ​ RMB ​ % ​ RMB ​ % ​ RMB ​ US$ ​ % ​ ​ (in thousands, except for percentages) Under product sales: ZKH platform 1,045,025 14.4 1,046,209 14.2 1,192,189 163,329 16.0 GBB platform 55,756 6.9 61,789 6.4 55,243 7,568 5.5 Under marketplace 4 179,508 ​ 100.0 307,412 100.0 244,707 33,525 100.0 Others 37,381 76.6 37,024 51.3 18,332 2,511 27.3 Total 1,317,670 15.8 1,452,434 16.7 1,510,471 206,934 17.2 4 Take rate of the marketplace model was 12.4%, 11.2% and 12.6% for 2022, 2023 and 2024, respectively.
Gross profit is calculated by subtracting cost of revenues from net revenues, and gross margin represents gross profit as a percentage of net revenues. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ Gross ​ Gross ​ Gross ​ Gross ​ Gross ​ Gross ​ ​ Profit ​ Margin ​ Profit ​ Margin ​ Profit ​ Margin ​ ​ RMB ​ % ​ RMB ​ % ​ RMB ​ US$ ​ % ​ ​ (in thousands, except for percentages) Under product sales: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ZKH platform 1,046,209 14.2 1,192,189 16.0 1,230,515 175,961 15.9 GBB platform 61,789 6.4 55,243 5.5 65,752 9,402 6.5 Under marketplace 4 307,412 100.0 244,707 100.0 171,264 24,490 100.0 Others 37,024 51.3 18,332 27.3 8,131 1,163 16.4 Total 1,452,434 16.7 1,510,471 17.2 1,475,662 211,016 16.4 4 Take rate of the marketplace model was 11.2%, 12.6% and 13.1% for 2023, 2024 and 2025, respectively.
Over the years, our customers have exhibited significant loyalty to our platform. Approximately 98% of our top 500 customers in terms of GMV in 2023 transacted with us in 2024. High-spending customers are important to our business because they are enterprises with steady demand for MRO products and stable procurement schedules.
Approximately 96.6% of our top 500 customers in terms of GMV in 2024 transacted with us in 2025. High-spending customers are important to our business because they are enterprises with steady demand for MRO products and stable procurement schedules.
Our business and product mix Our results of operations are affected by the mix of business models that we operate. By customer type, we mainly serve large to mid-size enterprise customers on our ZKH platform and micro businesses on our GBB platform . By revenue model, we derive revenue from our product sales model and our marketplace model.
Our business and product mix Our results of operations are affected by the mix of business models that we operate. By customer type, we mainly serve (i) large to small- and mid-sized businesses on our ZKH platform and (ii) retailer customers and micro businesses on our GBB platform .
We also believe that the use of these non-GAAP financial measures facilitates investors’ assessment of its operating performance, enhances the overall understanding of its past performance and prospects and allows for greater visibility with respect to key metrics used by the management in financial and operational decision making. 110 Table of Contents Non-GAAP EBITDA Our non-GAAP EBITDA was negative RMB193.3 million (US$26.5 million) in 2024, compared with negative RMB211.9 million in 2023.
We also believe that the use of these non-GAAP financial measures facilitates investors’ assessment of its operating performance, enhances the overall understanding of its past performance and prospects and allows for greater visibility with respect to key metrics used by the management in financial and operational decision making.
Non-GAAP EBITDA margin was negative 2.2% in 2024, compared with negative 2.4% in 2023. Non-GAAP EBITDA is defined as net profit/(loss) before interest expenses, income tax expenses/(benefits) and depreciation and amortization expenses.
Non-GAAP EBITDA Our non-GAAP EBITDA was negative RMB79.3 million (US$11.3 million) in 2025, compared with negative RMB193.3 million in 2024. Non-GAAP EBITDA margin was negative 0.9% in 2025, compared with negative 2.2% in 2024. Non-GAAP EBITDA is defined as net profit/(loss) before interest expenses, income tax expenses/(benefits) and depreciation and amortization expenses.
Our GMV reached RMB9.4 billion in 2022, increased by 18.2% to RMB11.1 billion in 2023, and decreased by 5.4% to RMB10.5 billion (US$1.4 billion) in 2024. Our net revenues reached RMB8,315.2 million in 2022, increased by 4.9% to RMB8,721.2 million in 2023, and further increased by 0.5% to RMB8,761.3million (US$1,200.3 million) in 2024.
Our GMV reached RMB11.1 billion in 2023, decreased by 5.4% to RMB10.5 billion in 2024, and further decreased to RMB10.1 billion (US$1.4 billion) in 2025. Our net revenues increased by 0.5% from RMB8,721.2 million in 2023 to RMB8,761.3 million in 2024, and further increased by 2.6% to RMB8,987.7 million (US$1,285.2 million) in 2025.
We source MRO products from suppliers for transactions on our platform. As our business grows in scale, we expect to further increase our purchase volume. We believe that this will solidify and expand our business relationships with suppliers, which in turn would help us to enhance our product selection and offer products at better prices for our customers.
We believe that this will solidify and expand our business relationships with suppliers, which in turn would help us to enhance our product selection and offer products at better prices for our customers.
We recorded cost of revenues of RMB6,997.6 million in 2022, RMB7,268.7 million in 2023, and RMB7,250.8 million (US$993.4 million) in 2024, representing 84.2%, 83.3%, and 82.8% of our total net revenues in the respective years. 104 Table of Contents The following table sets forth our cost of revenues by business models and by platforms and percentages of our total cost of revenues for the years presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ ​ RMB ​ % ​ RMB ​ % ​ RMB ​ US$ ​ % ​ ​ (in thousands, except for percentages) Cost of revenues: Under product sales: ZKH platform 6,232,235 89.0 6,335,292 87.2 6,258,022 857,345 86.3 GBB platform 753,904 10.8 898,313 12.4 944,014 129,329 13.0 Under marketplace (1) — — — — — — — Others 11,427 0.2 35,136 0.5 48,811 6,687 0.7 Total 6,997,566 100.0 7,268,741 100.0 7,250,847 993,362 100.0 Note: (1) We incurred minimal cost of revenues under our marketplace model.
We recorded cost of revenues of RMB7,268.7 million in 2023, RMB7,250.8 million in 2024, and RMB7,512.1 million (US$1,074.2 million) in 2025, representing 83.3%, 82.8%, and 83.6% of our total net revenues in the respective years. 106 Table of Contents The following table sets forth our cost of revenues by business models and by platforms and percentages of our total cost of revenues for the years presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ RMB ​ % ​ RMB ​ % ​ RMB ​ US$ ​ % ​ ​ (in thousands, except for percentages) Cost of revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Under product sales: ​ ​ ​ ​ ​ ​ ​ ZKH platform 6,335,292 87.2 6,258,022 86.3 6,526,949 933,341 86.9 GBB platform 898,313 12.4 944,014 13.0 943,535 134,924 12.6 Under marketplace (1) — — — — — — — Others 35,136 0.5 48,811 0.7 41,592 5,948 0.5 Total 7,268,741 100.0 7,250,847 100.0 7,512,076 1,074,213 100.0 Note: (1) We incurred minimal cost of revenues under our marketplace model.
Under our product sales model, we purchase products from suppliers and sell them to our customers. Under our marketplace model, suppliers sell products to customers over our platform and pay us commissions on their sales. On our ZKH platform, we operate both product sales and marketplace models, and on our GBB platform, we currently primarily operate our product sales model.
By revenue model, we derive revenue from our product sales model and our marketplace model. Under our product sales model, we purchase products from suppliers and sell them to our customers. Under our marketplace model, suppliers sell products to customers over our platform and pay us commissions on sales.
Our inventories primarily consist of the inventory balance of goods we purchased under our product sales model. Under our marketplace model, third-party sellers maintain ownership of their inventories and therefore these products are not included in our inventories.
Our inventories primarily consist of the inventory balance of goods we purchased under our product sales model. Under our marketplace model, third-party sellers maintain ownership of their inventories and therefore these products are not included in our inventories. Our inventories increased from RMB625.4 million as of December 31, 2024 to RMB669.8 million (US$95.8 million) as of December 31, 2025.
The PRC government may, in its discretion, restrict access to foreign currencies for current account transactions in the future. 113 Table of Contents Operating activities Our operating cash flow changed favorably from a net cash used in operating activities of RMB 567.9 million in 2023 to an inflow of RMB 229.1 million in 2024, as compared to a net loss of RMB304.9 million (US$42.9 million) in 2023 and a net loss of RMB268.0 million (US$36.7 million) in 2024, respectively.
The PRC government may, in its discretion, restrict access to foreign currencies for current account transactions in the future. 115 Table of Contents Operating activities Our operating cash flow decreased from an inflow of RMB229.1 million in 2024 to an inflow of RMB13.7 million (US2.0million) in 2025, as compared to a net loss of RMB268.0 million in 2024 and a net loss of RMB139.7 million (US$20.0 million) in 2025, respectively.
We have drawn down RMB730.6 (US$100.1 million) from our revolving credit facilities as of December 31, 2024. 114 Table of Contents Our capital expenditures contracted for were RMB244.9 million and RMB183.9million (US$25.2 million) as of December 31, 2023 and 2024, respectively.
We have drawn down RMB886.1 million (US$126.7 million) from our revolving credit facilities as of December 31, 2025. 116 Table of Contents Our capital expenditures contracted for were RMB183.9 million and RMB4.6 million (US$0.7 million) as of December 31, 2024 and 2025, respectively.
The following table sets forth the components of our revenues and percentages of our total net revenues for the years presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ ​ RMB ​ % ​ RMB ​ % ​ RMB ​ US$ ​ % ​ ​ (in thousands, except for percentages) Net revenues: Net product revenues From ZKH platform 7,277,260 87.5 7,381,501 84.7 7,450,211 1,020,672 85.0 From GBB platform 809,660 9.7 960,102 11.0 999,257 136,901 11.4 Net service revenues 179,508 2.2 307,412 3.5 244,707 33,525 2.8 Other revenues 48,808 0.6 72,160 0.8 67,143 9,199 0.8 Total 8,315,236 100.0 8,721,175 100.0 8,761,318 1,200,296 100.0 ​ Under our product sales model, we purchase products from suppliers and sell them directly to our customers.
The following table sets forth the components of our revenues and percentages of our total net revenues for the years presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ RMB ​ % ​ RMB ​ % ​ RMB ​ US$ ​ % ​ ​ (in thousands, except for percentages) Net revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net product revenues ​ ​ ​ ​ ​ ​ ​ From ZKH platform 7,381,501 84.7 7,450,211 85.0 7,757,464 1,109,303 86.3 From GBB platform 960,102 11.0 999,257 11.4 1,009,287 144,326 11.2 Net service revenues 307,412 3.5 244,707 2.8 171,264 24,490 1.9 Other revenues 72,160 0.8 67,143 0.8 49,723 7,110 0.6 Total 8,721,175 100.0 8,761,318 100.0 8,987,738 1,285,229 100.0 ​ Under our product sales model, we purchase products from suppliers and sell them directly to our customers.
Liquidity and Capital Resources The following table sets forth a summary of our cash flows for the years presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ ​ RMB ​ RMB ​ RMB ​ US$ ​ ​ (in thousands) Net cash (used in)/provided by operating activities (504,203) (567,948) 229,069 31,382 Net cash (used in)/provided by investing activities (37,040) (908,302) 276,080 37,823 Net cash provided by/(used in) financing activities 1,302,710 715,724 (254,185) (34,823) Effect of exchange rate changes on cash, cash equivalents and restricted cash 117,469 5,042 15,546 2,130 Increase/(Decrease) in cash, cash equivalents and restricted cash 878,936 (755,484) 266,510 36,512 Cash, cash equivalents and restricted cash at beginning of year 1,126,920 2,005,856 1,250,372 171,300 Cash, cash equivalents and restricted cash at end of year 2,005,856 1,250,372 1,516,882 207,812 ​ 111 Table of Contents Our primary sources of liquidity have been cash provided by equity and debt financing activities and credit facilities from commercial banks.
Liquidity and Capital Resources The following table sets forth a summary of our cash flows for the years presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ RMB ​ RMB ​ RMB ​ US$ ​ ​ (in thousands) Net cash (used in)/provided by operating activities ​ ​ ​ (567,948) ​ ​ ​ 229,069 ​ ​ ​ 13,691 ​ ​ ​ 1,958 Net cash (used in)/provided by investing activities (908,302) 276,080 (324,472) (46,399) Net cash provided by/(used in) financing activities 715,724 (254,185) (104,469) (14,939) Effect of exchange rate changes on cash, cash equivalents and restricted cash 5,042 15,546 (9,187) (1,314) Increase/(Decrease) in cash, cash equivalents and restricted cash (755,484) 266,510 (424,438) (60,694) Cash, cash equivalents and restricted cash at beginning of year 2,005,856 1,250,372 1,516,882 216,911 Cash, cash equivalents and restricted cash at end of year 1,250,372 1,516,882 1,092,444 156,217 ​ ​ 113 Table of Contents Our primary sources of liquidity have been cash provided by equity and debt financing activities and credit facilities from commercial banks.
The following table sets forth a summary of our non-GAAP adjusted net loss for the years presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ 2022 2023 2024 ​ ​ RMB ​ RMB ​ RMB US$ ​ ​ (in thousands) Net Loss (731,121) (304,900) (268,043) (36,721) Add: Share-based compensation expenses 31,899 17,393 108,516 14,867 Interest expense due to the issuance of Series F Convertible Notes ​ 73,081 ​ — ​ — ​ — Non-GAAP Adjusted Net Loss (626,141) (287,507) (159,527) (21,854) ​ Year ended December 31, 2023 compared to year ended December 31, 2022 For the discussion covering items for the fiscal year ended December 31, 2023 and a comparison between the fiscal year ended December 31, 2023 and 2022, please refer to “Item 5. - Operating and Financial Review and Prospects - A.
The following table sets forth a summary of our non-GAAP adjusted net loss for the years presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ ​ ​ 2023 ​ ​ ​ 2024 ​ ​ ​ 2025 ​ ​ RMB ​ RMB ​ RMB ​ ​ ​ US$ ​ ​ (in thousands) Net Loss (304,900) (268,043) (139,742) (19,983) Add: Share-based compensation expenses 17,393 108,516 53,819 7,696 Non-GAAP Adjusted Net Loss (287,507) (159,527) (85,923) (12,287) ​ Year ended December 31, 2024 compared to year ended December 31, 2023 For the discussion covering items for the fiscal year ended December 31, 2024 and a comparison between the fiscal year ended December 31, 2024 and 2023, please refer to “Item 5. - Operating and Financial Review and Prospects - A.
Operating expenses Operating expenses consist of fulfillment expenses, sales and marketing expenses, research and development expenses, and general and administrative expenses. 105 Table of Contents The following table sets forth the components of our operating expenses by amounts and percentages of total net revenues for the years presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ ​ RMB ​ % ​ RMB ​ % ​ RMB ​ US$ ​ % ​ ​ (in thousands, except for percentages) Operating expenses: Fulfillment 467,384 5.6 438,959 5.0 391,687 53,661 4.5 Sales and marketing 683,206 8.2 700,791 8.0 641,519 87,888 7.3 Research and development 240,534 2.9 175,915 2.0 169,496 23,221 1.9 General and administrative 612,252 7.4 535,493 6.1 646,539 88,575 7.4 Total 2,003,376 24.1 1,851,158 21.2 1,849,241 253,345 21.1 ​ Fulfillment expenses.
Operating expenses Operating expenses consist of fulfillment expenses, sales and marketing expenses, research and development expenses, and general and administrative expenses. 107 Table of Contents The following table sets forth the components of our operating expenses by amounts and percentages of total net revenues for the years presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ RMB ​ % ​ RMB ​ % ​ RMB ​ US$ ​ % ​ ​ (in thousands, except for percentages) Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fulfillment 438,959 5.0 391,687 4.5 362,173 51,790 4.0 Sales and marketing 700,791 8.0 641,519 7.3 585,039 83,659 6.5 Research and development 175,915 2.0 169,496 1.9 165,518 23,669 1.8 General and administrative 535,493 6.1 646,539 7.4 576,269 82,405 6.4 Total 1,851,158 21.2 1,849,241 21.1 1,688,999 241,523 18.7 ​ Fulfillment expenses.
Sales and marketing expenses as a percentage of net revenues were 7.3% in 2024, compared with 8.0% in 2023. 109 Table of Contents Research and development expenses. Our research and development expenses decreased by 3.6% from RMB175.9 million in 2023 to RMB169.5 million (US$23.2 million) in 2024.
The decrease was primarily attributable to lower travel expenses and employee benefit expenses. Sales and marketing expenses as a percentage of net revenues were 6.5% in 2025, compared with 7.3% in 2024. Research and development expenses. Our research and development expenses decreased by 2.3% from RMB169.5 million in 2024 to RMB165.5 million (US$23.7 million) in 2025.
The following table sets forth a summary of our non-GAAP EBITDA for the years presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ 2022 2023 2024 ​ ​ RMB ​ RMB ​ RMB US$ ​ ​ (in thousands) Net Loss (731,121) (304,900) (268,043) (36,721) Income tax benefits 471 195 1,013 139 Interest expense 94,182 19,343 19,003 2,603 Depreciation and amortization 76,073 73,466 54,769 7,503 Non-GAAP EBITDA (561,337) (211,896) (193,258) (26,476) ​ Non-GAAP adjusted net loss Our non-GAAP adjusted net loss was RMB159.5 million (US$21.9 million), compared with RMB287.5 million in 2023.
The following table sets forth a summary of our non-GAAP EBITDA for the years presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ ​ ​ 2023 ​ ​ ​ 2024 ​ ​ ​ 2025 ​ ​ RMB ​ RMB ​ RMB ​ ​ ​ US$ ​ ​ (in thousands) Net Loss (304,900) (268,043) (139,742) (19,983) Income tax benefits 195 1,013 689 99 Interest expense 19,343 19,003 11,350 1,623 Depreciation and amortization 73,466 54,769 48,356 6,915 Non-GAAP EBITDA (211,896) (193,258) (79,347) (11,346) ​ 112 Table of Contents Non-GAAP adjusted net loss Our non-GAAP adjusted net loss was RMB85.9 million (US$12.3 million), compared with RMB159.5 million in 2024.
Non-GAAP Financial Measures To provide investors with additional information regarding our financial results, we have disclosed in the table below non-GAAP EBITDA and non-GAAP net loss.
Net loss As a result of the foregoing, we recorded net loss of RMB139.7 million (US$20.0 million) in 2025, compared to RMB268.0 million in 2024. Non-GAAP Financial Measures To provide investors with additional information regarding our financial results, we have disclosed in the table below non-GAAP EBITDA and non-GAAP net loss.
General and administrative expenses as a percentage of net revenues were 7.4% in 2024, compared with 6.1% in the same period of 2023. Interest expense We recorded interest expense of RMB19.0 million (US$2.6 million) in 2024, attributable to short-term bank borrowings. We recorded interest expense of RMB19.3 million in 2023.
The decrease was primarily attributable to lower share-based compensation expenses and credit loss allowances. General and administrative expenses as a percentage of net revenues were 6.4% in 2025, compared with 7.4% in 2024. 111 Table of Contents Interest expense We recorded interest expense of RMB11.4 million (US$1.6 million) in 2025, attributable to short-term bank borrowings.
The results of operations in any period are not necessarily indicative of our future trends. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ ​ RMB ​ % ​ RMB ​ % ​ RMB ​ US$ ​ % ​ ​ (in thousands, except for percentages) Net revenues Net product revenues 8,086,920 97.2 8,341,603 95.6 8,449,468 1,157,572 96.4 Net service revenues 179,508 2.2 307,412 3.5 244,707 33,525 2.8 Other revenues 48,808 0.6 72,160 0.8 67,143 9,199 0.8 Total net revenues 8,315,236 100.0 8,721,175 100.0 8,761,318 1,200,296 100.0 Cost of revenues (6,997,566) (84.2) (7,268,741) (83.3) (7,250,847) (993,362) (82.8) Operating expenses: ​ ​ ​ ​ ​ ​ ​ Fulfillment (1) (467,384) (5.6) (438,959) (5.0) (391,687) (53,661) (4.5) Sales and marketing (1) (683,206) (8.2) (700,791) (8.0) (641,519) (87,888) (7.3) Research and development (1) (240,534) (2.9) (175,915) (2.0) (169,496) (23,221) (1.9) General and administrative (1) (612,252) (7.4) (535,493) (6.1) (646,539) (88,575) (7.4) Loss from operations (685,706) (8.2) (398,724) (4.6) (338,770) (46,411) (3.9) Interest and investment income 14,559 0.2 53,703 0.6 64,246 8,802 0.7 Interest expense (94,182) (1.1) (19,343) (0.2) (19,003) (2,603) (0.2) Others, net 33,737 0.4 59,659 0.7 26,497 3,630 0.3 Loss before income tax (731,592) (8.8) (304,705) (3.5) (267,030) (36,583) (3.0) Income tax benefits/(expenses) 471 0.0 (195) 0.0 (1,013) (139) 0.0 Net loss (731,121) (8.8) (304,900) (3.5) (268,043) (36,722) (3.1) Net loss attributable to ZKH Group Limited (735,681) (8.8) (304,314) (3.5) (268,043) (36,722) (3.1) Net loss attributable to ZKH Group Limited’s ordinary shareholders (1,244,962) (15.0) (964,384) (11.1) (268,043) (36,722) (3.1) Note: (1) Share-based compensation expenses were allocated as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ ​ RMB ​ % ​ RMB ​ % ​ RMB ​ US$ ​ % ​ ​ (in thousands, except for percentages) Fulfillment 585 1.8 195 1.1 811 111 0.8 Sales and marketing 5,935 18.6 4,682 26.9 11,055 1,515 10.2 Research and development 3,883 12.2 3,070 17.7 4,615 632 4.2 General and administrative 21,496 67.4 9,446 54.3 92,035 12,609 84.8 Total 31,899 100.0 17,393 100.0 108,516 14,867 100.0 ​ 108 Table of Contents Year ended December 31, 2024 compared to year ended December 31, 2023 Net revenue Our net revenues increased from RMB8,721.2 million in 2023 to RMB8,761.3 million (US$1,200.3 million) in 2024, representing an increase of 0.5% from RMB8,721.2 million in 2023, primarily driven by higher revenues from the product sales model, partially offset by a decline in revenues from the marketplace model due to the optimization of certain businesses with low margins and long customer credit terms. ● The number of our customers increased from over 66,000 in 2023 to over 83,000 in 2024, and average spending per customer decreased from RMB166,507 in 2023 to RMB 124,819 (US$ 17,100) in 2024. ● The number of ZKH customers who contributed GMV of more than RMB1 million in a given year to us was over 1,300 and over 1,300 in 2023 and 2024, respectively.
The results of operations in any period are not necessarily indicative of our future trends. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ RMB ​ % ​ RMB ​ % ​ RMB ​ US$ ​ % ​ ​ (in thousands, except for percentages) Net revenues ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net product revenues 8,341,603 95.6 8,449,468 96.4 8,766,751 1,253,629 97.5 Net service revenues 307,412 3.5 244,707 2.8 171,264 24,490 1.9 Other revenues 72,160 0.8 67,143 0.8 49,723 7,110 0.6 Total net revenues 8,721,175 100.0 8,761,318 100.0 8,987,738 1,285,229 100.0 Cost of revenues (7,268,741) (83.3) (7,250,847) (82.8) (7,512,076) (1,074,213) (83.6) Operating expenses: ​ ​ ​ ​ ​ ​ ​ Fulfillment (1) (438,959) (5.0) (391,687) (4.5) (362,173) (51,790) (4.0) Sales and marketing (1) (700,791) (8.0) (641,519) (7.3) (585,039) (83,659) (6.5) Research and development (1) (175,915) (2.0) (169,496) (1.9) (165,518) (23,669) (1.8) General and administrative (1) (535,493) (6.1) (646,539) (7.4) (576,269) (82,405) (6.4) Loss from operations (398,724) (4.6) (338,770) (3.9) (213,337) (30,507) (2.4) Interest and investment income 53,703 0.6 64,246 0.7 50,088 7,162 0.6 Interest expense (19,343) (0.2) (19,003) (0.2) (11,350) (1,623) (0.1) Others, net 59,659 0.7 26,497 0.3 35,546 5,083 0.4 Loss before income tax (304,705) (3.5) (267,030) (3.0) (139,053) (19,884) (1.5) Income tax benefits/(expenses) (195) 0.0 (1,013) 0.0 (689) (99) 0.0 Net loss (304,900) (3.5) (268,043) (3.1) (139,742) (19,983) (1.6) Net loss attributable to ZKH Group Limited (304,314) (3.5) (268,043) (3.1) (139,742) (19,983) (1.6) Net loss attributable to ZKH Group Limited’s ordinary shareholders (964,384) (11.1) (268,043) (3.1) (139,742) (19,983) (1.6) Note: Share-based compensation expenses were allocated as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ RMB ​ % ​ RMB ​ % ​ RMB ​ US$ ​ % ​ ​ (in thousands, except for percentages) Fulfillment ​ ​ ​ 195 ​ ​ ​ 1.1 ​ ​ ​ 811 ​ ​ ​ 0.8 ​ ​ ​ 674 ​ ​ ​ 96 ​ ​ ​ 1.3 Sales and marketing 4,682 26.9 11,055 10.2 8,294 1,186 15.4 Research and development 3,070 17.7 4,615 4.2 4,283 612 8.0 General and administrative 9,446 54.3 92,035 84.8 40,568 5,801 75.3 Total 17,393 100.0 108,516 100.0 53,819 7,695 100.0 ​ 110 Table of Contents Year ended December 31, 2025 compared to year ended December 31, 2024 Net revenue Our net revenues increased from RMB8,761.3 million in 2024 to RMB8,987.7 million (US$1,285.2 million) in 2025, representing an increase of 2.6% from RMB8,761.3 million in 2024, primarily driven by higher revenues from the product sales model, partially offset by a decline in revenues from the marketplace model due to the optimization of certain businesses with low margins and long customer credit terms.
Our gross profit, calculated by subtracting cost of revenues from net revenues, increased by 10.2% from RMB1,317.7 million in 2022 to RMB1,452.4 million in 2023 and further increased by 4.0% to RMB1,510.5 million (US$206.9 million) in 2024. Our gross margin, representing gross profit as a percentage of net revenues, was 15.8%, 16.7% and 17.2% in 2022, 2023 and 2024, respectively.
Our gross margin, representing gross profit as a percentage of net revenues, was 16.7%, 17.2% and 16.4% in 2023, 2024 and 2025, respectively. 103 Table of Contents Our loss from operations, calculated by subtracting operating expenses from gross profit, decreased by 15.0% from RMB398.7 million in 2023 to RMB338.8 million in 2024, and further decreased by 37.0% to RMB213.3 million (US$30.5 million) in 2025.
We accept bank acceptance notes from customers for products sold or services performed in the ordinary course of business. Bank acceptance notes are primarily negotiable instruments with cash settlement from commercial banks within six months. Upon receipt of the bank acceptance notes, our accounts receivable from the customer will be derecognized.
Bank acceptance notes are primarily negotiable instruments with cash settlement from commercial banks within six months. Upon receipt of the bank acceptance notes, our accounts receivable from the customer will be derecognized. The bank acceptance notes can also be endorsed to suppliers as settlement of accounts payable.
As of December 31, 2024, 52.8% and 46.3% of our cash and cash equivalents were held in mainland China and Hong Kong, respectively; 52.1% of our cash and cash equivalents was denominated in Renminbi and 47.6% was denominated in U.S. dollars.
As of December 31, 2025, 47.11% and 42.89% of our restricted cash was held in Chinese mainland and Hong Kong, respectively; 47.58% of our restricted cash was denominated in Renminbi and 52.42% of our restricted cash was denominated in U.S. dollars.
We incurred non-GAAP adjusted net loss of RMB 626.1 million RMB 287.5 million and RMB 159.5 million (US$ 21.9 million) in 2022, 2023 and 2024, respectively.
We incurred non-GAAP adjusted net loss of RMB287.5 million, RMB159.5 million and RMB85.9 million (US$12.3 million) in 2023, 2024 and 2025, respectively.
If there is strong evidence indicating that the accounts receivable is likely to be unrecoverable, we also make specific allowance in the period in which a loss is determined to be probable.
For each group, we consider factors in assessing the collectability of the accounts receivable, such as historical collection activity, current business environment and forecasts of future macroeconomic conditions. If there is strong evidence indicating that the accounts receivable is likely to be unrecoverable, we also make specific allowance in the period in which a loss is determined to be probable.
We estimated the allowance by segmenting accounts receivable into groups based on their shared credit risk characteristics and the ages of the underlying receivables, and assessed the expected credit loss rate for each group periodically.
Allowance for Credit Losses We estimated allowance for credit losses to reserve for potentially uncollectible receivable amounts periodically. We estimated the allowance by segmenting accounts receivable into groups based on their shared credit risk characteristics.
Investing activities Net cash provided by investing activities in 2024 was RMB276.1 million (US$37.8 million), primarily due to RMB104.9 million (US$14.4 million) of purchase of short-term investments and RMB79.2 million (US$10.8 million) of purchase of property and equipment, partially offset by the maturity of short-term investments of RMB461.9 million (US$63.3 million).
Investing activities Net cash used in investing activities in 2025 was RMB324.5 million (US$46.4 million), primarily due to RMB488.3 million (US$69.8 million) of purchase of short-term investments and RMB53.0 million (US$7.6 million) of purchase of property and equipment, partially offset by the maturity of short−term investments of RMB213.8 million(US$30.6 million).
The decrease was primarily attributable to lower employee benefit costs and traveling expenses, partially offset by higher expenses related to technology and information services, such as cloud services. Research and development expenses as a percentage of net revenues were 1.9% in 2024, compared with 2.0% in 2023. General and administrative expenses .
The decrease was primarily attributable to lower employee benefit expenses. Research and development expenses as a percentage of net revenues were 1.8% in 2025, compared with 1.9% in 2024. General and administrative expenses . Our general and administrative expenses decreased by 10.9% from RMB646.5 million in 2024 to RMB576.3 million (US$82.4 million) in 2025.
Operating expenses Our total operating expenses were RMB1,849.2 million (US$253.3 million), a decrease of 0.1% from RMB1,851.2 million in 2023. Operating expenses as a percentage of net revenues were 21.1%, compared with 21.2% in 2023. Excluding the share-based compensation expenses, operating expenses as of a percentage of net revenues were 19.9%, compared with 21.0% in 2023. Fulfillment expenses.
Operating expenses Our total operating expenses were RMB1,689.0 million (US$241.5 million), a decrease of 8.7% from RMB1,849.2 million in 2024. Operating expenses as a percentage of net revenues were 18.8%, compared with 21.1% in 2024. Fulfillment expenses. Our fulfillment expenses decreased by 7.5% from RMB391.7 million in 2024 to RMB362.2 million (US$51.8 million) in 2025.
As of December 31, 2024, 96.8% and 1.6% of our restricted cash was held in mainland China and Hong Kong, respectively; 96.8% of our restricted cash was denominated in Renminbi and 3.2% of our restricted cash was denominated in U.S. dollars.
As of December 31, 2025, 68.42% and 29.29% of our cash and cash equivalents were held in Chinese mainland and Hong Kong, respectively; 68.84% of our cash and cash equivalents was denominated in Renminbi and 28.02% was denominated in U.S. dollars.

… 34 more changes not shown on this page.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

56 edited+6 added−13 removed68 unchanged
Vesting Schedule . In general, the plan administrator determines the vesting schedule, which is specified in the award agreement. Exercise of Awards . The plan administrator determines the exercise price for each option, which is stated in the award agreement and may be a fixed or variable price related to the fair market value of the shares.
In general, the plan administrator determines the vesting schedule, which is specified in the award agreement. Exercise of Awards . The plan administrator determines the exercise price for each option, which is stated in the award agreement and may be a fixed or variable price related to the fair market value of the shares.
He Xu is Xibeiwang East Road, No. 10, East Campus, Lenovo, Haidian District, Beijing, People’s Republic of China. † For each person or group included in this column, percentage of beneficial ownership is calculated by dividing the number of shares beneficially owned by such person or group by the sum of the total number of shares outstanding and the number of shares such person or group has the right to acquire upon exercise of option, warrant or other right within 60 days after March 31, 2025. †† For each person or group included in this column, percentage of aggregate voting power represents voting power based on both Class A and Class B ordinary shares held by such person or group with respect to all outstanding shares of our Class A and Class B ordinary shares as a single class.
He Xu is Xibeiwang East Road, No. 10, East Campus, Lenovo, Haidian District, Beijing, People’s Republic of China. † For each person or group included in this column, percentage of beneficial ownership is calculated by dividing the number of shares beneficially owned by such person or group by the sum of the total number of shares outstanding and the number of shares such person or group has the right to acquire upon exercise of option, warrant or other right within 60 days after March 31, 2026. †† For each person or group included in this column, percentage of aggregate voting power represents voting power based on both Class A and Class B ordinary shares held by such person or group with respect to all outstanding shares of our Class A and Class B ordinary shares as a single class.
Under the PRC Civil Procedures Law and PRC Law on the Application of Laws to Foreign-related Civil Relations, foreign shareholders may originate actions based on PRC law before a court in mainland China against a company for disputes relating to contracts or other property interests, and the court in mainland China may accept a cause of action based on the laws or the parties’ express mutual agreement in contracts choosing courts in mainland China for dispute resolution if such foreign shareholders can establish sufficient nexus to the mainland China for a court in mainland China to have jurisdiction and meet other procedural requirements, including, among other things, that the plaintiff must have a direct interest in the case and that there must be a concrete claim, a factual basis and a cause for the case.
Under the PRC Civil Procedures Law and PRC Law on the Application of Laws to Foreign-related Civil Relations, foreign shareholders may originate actions based on PRC law before a court in Chinese mainland against a company for disputes relating to contracts or other property interests, and the court in Chinese mainland may accept a cause of action based on the laws or the parties’ express mutual agreement in contracts choosing courts in Chinese mainland for dispute resolution if such foreign shareholders can establish sufficient nexus to the Chinese mainland for a court in Chinese mainland to have jurisdiction and meet other procedural requirements, including, among other things, that the plaintiff must have a direct interest in the case and that there must be a concrete claim, a factual basis and a cause for the case.
Han Kun Law Offices, our PRC counsel, has advised us that there is uncertainty as to whether the courts in mainland China would (i) recognize or enforce judgments of United States courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States; or (ii) entertain original actions brought in each respective jurisdiction against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States.
Han Kun Law Offices, our PRC counsel, has advised us that there is uncertainty as to whether the courts in Chinese mainland would (i) recognize or enforce judgments of United States courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States; or (ii) entertain original actions brought in each respective jurisdiction against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States.
The audit committee is responsible for, among other things: ● appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; ● reviewing with the independent auditors any audit problems or difficulties and management’s response; ● discussing the annual audited financial statements with management and the independent auditors; ● reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; ● reviewing and approving all proposed related party transactions; 121 Table of Contents ● meeting separately and periodically with management and the independent auditors; and ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.
The audit committee is responsible for, among other things: ● appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; ● reviewing with the independent auditors any audit problems or difficulties and management’s response; ● discussing the annual audited financial statements with management and the independent auditors; ● reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; ● reviewing and approving all proposed related party transactions; ● meeting separately and periodically with management and the independent auditors; and ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.
Prior to joining us, from April 2014 to June 2021, Mr. Lai worked at China International Capital Corporation Hong Kong Securities Limited, with his last position being an executive director in the investment banking division, advising clients on initial public offerings, mergers and acquisitions and other strategic transactions. Mr.
Prior to joining us, from April 2014 to June 2021, Mr. Lai worked at China International Capital Corporation Hong Kong Securities Limited, with his last position being an executive director in the investment banking division, advising customers on initial public offerings, mergers and acquisitions and other strategic transactions. Mr.
Our mainland China subsidiaries are required by law to make contributions equal to certain percentages of each employee’s salary for his or her pension insurance, medical insurance, unemployment insurance and other statutory benefits and a housing provident fund. Employment Agreements and Indemnification Agreements We have entered into employment agreements with each of our executive officers.
Our Chinese mainland subsidiaries are required by law to make contributions equal to certain percentages of each employee’s salary for his or her pension insurance, medical insurance, unemployment insurance and other statutory benefits and a housing provident fund. Employment Agreements and Indemnification Agreements We have entered into employment agreements with each of our executive officers.
Share Ownership Except as specifically noted, the following table sets forth information with respect to the beneficial ownership of our ordinary shares on an as-converted basis as of March 31, 2025 by: ● each of our directors and executive officers; and ● each person known to us to own beneficially 5% or more of our total outstanding ordinary shares.
Share Ownership Except as specifically noted, the following table sets forth information with respect to the beneficial ownership of our ordinary shares on an as-converted basis as of March 31, 2026 by: ● each of our directors and executive officers; and ● each person known to us to own beneficially 5% or more of our total outstanding ordinary shares.
(7) Represents (i) 349,073,061 Class A ordinary shares and (ii) 22,575,000 Class A ordinary shares in the form of 645,000 ADSs held by Canada Pension Plan Investment Board. Such shareholding information is based on the information contained in the Schedule 13G filed by Canada Pension Plan Investment Board with SEC on February 14, 2024.
(6) Represents (i) 349,073,061 Class A ordinary shares and (ii) 22,575,000 Class A ordinary shares in the form of 645,000 ADSs held by Canada Pension Plan Investment Board. Such shareholding information is based on the information contained in the Schedule 13G filed by Canada Pension Plan Investment Board with SEC on February 14, 2024.
Our constitutional documents do not contain provisions requiring that disputes, including those arising under the securities laws of the United States, between us, our officers, directors and shareholders, be arbitrated. Substantially all of our operations are conducted through our mainland China subsidiaries, and substantially all of our assets are located in mainland China.
Our constitutional documents do not contain provisions requiring that disputes, including those arising under the securities laws of the United States, between us, our officers, directors and shareholders, be arbitrated. Substantially all of our operations are conducted through our Chinese mainland subsidiaries, and substantially all of our assets are located in Chinese mainland.
The court in mainland China will determine whether to accept the complaint in accordance with the PRC Civil Procedures Law and PRC Law on the Application of Laws to Foreign-related Civil Relations. The shareholder may participate in the action by itself or entrust any other person or PRC legal counsel to participate on behalf of such shareholder.
The court in Chinese mainland will determine whether to accept the complaint in accordance with the PRC Civil Procedures Law and PRC Law on the Application of Laws to Foreign-related Civil Relations. The shareholder may participate in the action by itself or entrust any other person or PRC legal counsel to participate on behalf of such shareholder.
In addition, according to the PRC Civil Procedures Law, courts in mainland China will not enforce a foreign judgment against us or our directors and officers if they decide that the judgment violates the basic principles of PRC law or national sovereignty, security or public interest.
In addition, according to the PRC Civil Procedures Law, courts in Chinese mainland will not enforce a foreign judgment against us or our directors and officers if they decide that the judgment violates the basic principles of PRC law or national sovereignty, security or public interest.
Courts in mainland China may recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil Procedures Law and other applicable laws and regulations based either on treaties between mainland China and the country where the judgment is made or on principles of reciprocity between jurisdictions.
Courts in Chinese mainland may recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil Procedures Law and other applicable laws and regulations based either on treaties between Chinese mainland and the country where the judgment is made or on principles of reciprocity between jurisdictions.
There exists no treaty and few other forms of reciprocity between mainland China and the United States or the Cayman Islands governing the recognition and enforcement of foreign judgments as of the date of this annual report.
There exists no treaty and few other forms of reciprocity between Chinese mainland and the United States or the Cayman Islands governing the recognition and enforcement of foreign judgments as of the date of this annual report.
(6) Represents (i) 215,539,000 Class A ordinary shares held by YSC Investment II (BVI) Ltd., a British Virgin Islands limited company, and (ii) 181,310,600 Class A ordinary shares held by YSC Investment III (BVI) Limited, a British Virgin Islands limited company.
(5) Represents (i) 215,539,000 Class A ordinary shares held by YSC Investment II (BVI) Ltd., a British Virgin Islands limited company, and (ii) 181,310,600 Class A ordinary shares held by YSC Investment III (BVI) Limited, a British Virgin Islands limited company.
As a result, it is uncertain whether and on what basis a court in mainland China would enforce a judgment rendered by a court in the United States or in the Cayman Islands.
As a result, it is uncertain whether and on what basis a court in Chinese mainland would enforce a judgment rendered by a court in the United States or in the Cayman Islands.
Liu received her bachelor’s degree in plant protection from Jilin Agricultural University in 2003 and master’s degree in plant protection from Fujian Agricultural and Forestry University in 2006. Dr. Liu graduated with a Ph.D. in environmental science from Chinese Academy of Sciences in 2010. Dr. Liu conducted her postdoctoral research at Tsinghua University. B.
Liu received her bachelor’s degree in plant protection from Jilin Agricultural University in 2003 and master’s degree in plant protection from Fujian Agricultural and Forestry University in 2006. Dr. Liu graduated with a Ph.D. in environmental science from Chinese Academy of Sciences in 2010. Dr. Liu conducted her postdoctoral research at Tsinghua University. 119 Table of Contents B.
The maximum aggregate number of ordinary shares of ZKH Group Limited which may be issued under the 2022 Plan is 512,273,667. In 2022, ZKH Industrial Supply’s stock incentive plan and all award agreements evidencing the awards granted thereunder were terminated.
The maximum aggregate number of ordinary shares of ZKH Group Limited which may be issued under the 2022 Plan is 512,273,667. 120 Table of Contents In 2022, ZKH Industrial Supply’s stock incentive plan and all award agreements evidencing the awards granted thereunder were terminated.
C. Board Practices Board of Directors Our board of directors consists of seven directors. A director is not required to hold any shares in our company by way of qualification.
C. Board Practices Board of Directors Our board of directors consists of six directors. A director is not required to hold any shares in our company by way of qualification.
The compensation committee is responsible for, among other things: ● reviewing and approving, or recommending to the board for its approval, the compensation for our chief executive officer and other executive officers; ● reviewing and recommending to the board for determination with respect to the compensation of our non-employee directors; ● reviewing periodically and approving any incentive compensation or equity plans, programs or similar arrangements; and ● selecting a compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s independence from management.
The compensation committee is responsible for, among other things: ● reviewing and approving, or recommending to the board for its approval, the compensation for our chief executive officer and other executive officers; ● reviewing and recommending to the board for determination with respect to the compensation of our non-employee directors; ● reviewing periodically and approving any incentive compensation or equity plans, programs or similar arrangements; and ● selecting a compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s independence from management. 123 Table of Contents Nominating and Corporate Governance Committee .
As of March 31, 2025, 294,577,080 of such shares had been converted into ADSs, each representing 35 Class A ordinary shares, and the remaining Class A ordinary shares are held in the form of ordinary share. (5) Represents 526,845,143 Class A ordinary shares held by Tencent Mobility Limited.
As of March 31, 2026, 294,577,080 of such shares had been converted into ADSs, each representing 35 Class A ordinary shares, and the remaining Class A ordinary shares are held in the form of ordinary share. (4) Represents 526,845,143 Class A ordinary shares held by Tencent Mobility Limited.
Each award granted under the 2022 Plan should be evidenced by an award agreement, which may include the terms and conditions of such award and the provisions applicable in the event that the grantee’s employment or service terminates. 119 Table of Contents Eligibility . We may grant awards to employees, directors and consultants of our company or our related entities.
Each award granted under the 2022 Plan should be evidenced by an award agreement, which may include the terms and conditions of such award and the provisions applicable in the event that the grantee’s employment or service terminates. Eligibility . We may grant awards to employees, directors and consultants of our company or our related entities. Vesting Schedule .
We believe that we maintain a good working relationship with our employees and we have not experienced any significant labor disputes or any difficulty in recruiting staff for our operations. E.
We believe that we maintain a good working relationship with our employees and we have not experienced any significant labor disputes or any difficulty in recruiting staff for our operations. 125 Table of Contents E.
Our officers are appointed by and serve at the discretion of the board of directors, and may be removed by our board of directors. D. Employees We had a total of 3,956 full time employees as of December 31, 2022, 3,476 full time employees as of December 31, 2023 and 3,262 full time employees as of December 31, 2024.
Our officers are appointed by and serve at the discretion of the board of directors, and may be removed by our board of directors. D. Employees We had a total of 3,476 full time employees as of December 31, 2023, 3,262 full time employees as of December 31, 2024 and 2,933 full time employees as of December 31, 2025.
Compensation Compensation of Directors and Executive Officers For the year ended December 31, 2024, we paid an aggregate of RMB13.8 million (US$1.92 million) in cash to our directors and executive officers. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our directors and executive officers.
Compensation Compensation of Directors and Executive Officers For the year ended December 31, 2025, we paid an aggregate of RMB13.2 million (US$1.9 million) in cash to our directors and executive officers. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our directors and executive officers.
None of our non-executive directors has a service contract with us that provides for benefits upon termination of service. Committees of the Board of Directors We have established three committees under the board of directors: an audit committee, a compensation committee and a nominating and corporate governance committee. We have adopted a charter for each of the three committees.
None of our non-executive directors has a service contract with us that provides for benefits upon termination of service. 122 Table of Contents Committees of the Board of Directors We have established three committees under the board of directors: an audit committee, a compensation committee and a nominating and corporate governance committee.
The registered address of Loong ZKH Limited is Ritter House, Wickhams Cay II, PO Box 3170, Road Town, Torlola VG1110, British Virgin Islands. (2) Represents 151,717,482 Class B ordinary shares beneficially owned by the Management Shareholders other than Mr. Long Chen. Each of the shareholding entities of the Management Shareholders other than Mr. Long Chen, including Mr. Junyu Li, Mr.
The registered address of Loong ZKH Limited is Ritter House, Wickhams Cay II, PO Box 3170, Road Town, Torlola VG1110, British Virgin Islands. (2) Represents 132,217,512 Class B ordinary shares beneficially owned by the Management Shareholders other than Mr. Long Chen. Each of the shareholding entities of the Management Shareholders other than Mr. Long Chen, including Mr.
We may also terminate an executive officer’s employment without cause upon 60-day advance written notice, in which case, we will provide severance payments to the executive officer as may be agreed between the executive officer and us.
We may also terminate an executive officer’s employment without cause upon 60-day advance written notice, in which case, we will provide severance payments to the executive officer as may be agreed between the executive officer and us. The executive officer may resign at any time with a 60-day advance written notice.
As of March 31, 2025, awards to purchase 300,958,134 ordinary shares of ZKH Group Limited under the 2022 Plan have been granted and remain outstanding, excluding awards that were forfeited or canceled after the grant dates. The following paragraphs describe the principal terms of the 2022 Plan. Types of Awards .
As of March 31, 2026, awards to purchase 272,584,032 ordinary shares of ZKH Group Limited under the 2022 Plan have been granted and remain outstanding, excluding awards that were forfeited or canceled after the grant dates. The following paragraphs describe the principal terms of the 2022 Plan. Types of Awards .
As of March 31, 2025, 290,178,455 of such shares had been converted into ADSs, each representing 35 Class A ordinary shares, and the remaining Class A ordinary shares are held in the form of ordinary share.
As of March 31, 2025, 349,073,060 of such shares had been converted into ADSs, each representing 35 Class A ordinary shares, and the remaining Class A ordinary shares are held in the form of ordinary share.
F. Disclosure of A Registrant’s Action to Recover Erroneously Awarded Compensation Not applicable. 127 Table of Contents
F. Disclosure of A Registrant’s Action to Recover Erroneously Awarded Compensation Not applicable.
We have been informed by Maples and Calder (Hong Kong) LLP, our Cayman Islands counsel, that there is uncertainty as to whether the courts of the Cayman Islands would (i) recognize or enforce judgments of U.S. courts obtained against us or our directors or officers that are predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States, or (ii) entertain original actions brought in the Cayman Islands against us or our directors or officers that are predicated upon the securities laws of the United States or any state in the United States.
It may also be difficult for you to enforce judgments obtained in U.S. courts based on the civil liability provisions of the U.S. federal securities laws against us and our officers and directors. 128 Table of Contents We have been informed by Maples and Calder (Hong Kong) LLP, our Cayman Islands counsel, that there is uncertainty as to whether the courts of the Cayman Islands would (i) recognize or enforce judgments of U.S. courts obtained against us or our directors or officers that are predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States, or (ii) entertain original actions brought in the Cayman Islands against us or our directors or officers that are predicated upon the securities laws of the United States or any state in the United States.
The number of our effective headcount was 4,540 for 2022, 3,954 for 2023 and 3,592 for 2024. 123 Table of Contents As required by regulations in mainland China, we participate in various government statutory employee benefit plans, including social insurance plans, namely pension, medical, unemployment, work-related injury and maternity insurance plans, and housing provident funds.
The number of our effective headcount was 3,954 for 2023, 3,592 for 2024 and 3,234 for 2025. As required by regulations in Chinese mainland, we participate in various government statutory employee benefit plans, including social insurance plans, namely pension, medical, unemployment, work-related injury and maternity insurance plans, and housing provident funds.
The functions and powers of our board of directors include, among other things: ● convening shareholders’ annual and extraordinary general meetings and reporting its work to shareholders at such meetings; ● declaring dividends and distributions; ● appointing officers and determining the term of office of the officers; ● exercising the borrowing powers of our company and mortgaging the property of our company; and ● approving the transfer of shares in our company, including the registration of such shares in our register of members.
The functions and powers of our board of directors include, among other things: ● convening shareholders’ annual and extraordinary general meetings and reporting its work to shareholders at such meetings; ● declaring dividends and distributions; ● appointing officers and determining the term of office of the officers; ● exercising the borrowing powers of our company and mortgaging the property of our company; and ● approving the transfer of shares in our company, including the registration of such shares in our register of members. 124 Table of Contents Terms of Directors and Officers Our directors may be appointed by an ordinary resolution of our shareholders.
We have also been advised by Maples and Calder (Hong Kong) LLP that although there is no statutory enforcement in the Cayman Islands of judgments obtained in a U.S. court (and the Cayman Islands are not a party to any treaties for the reciprocal enforcement or recognition of such judgments), the courts of the Cayman Islands will, at common law, recognize and enforce a foreign monetary judgment of a foreign court of competent jurisdiction without any re-examination of the merits of the underlying dispute based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay a liquidated sum for which such judgment has been given, provided such judgment (i) is given by a foreign court of competent jurisdiction, (ii) imposes on the judgment debtor a liability to pay a liquidated sum for which the judgment has been given, (iii) is final and conclusive, (iv) is not in respect of taxes, a fine or a penalty, and (v) was not obtained in a manner and is not of a kind the enforcement of which is contrary to natural justice or the public policy of the Cayman Islands. 126 Table of Contents However, the Cayman Islands courts are unlikely to enforce a judgment obtained from the United States courts under civil liability provisions of the securities laws if such judgment is determined by the courts of the Cayman Islands to give rise to obligations to make payments that are penal or punitive in nature.
We have also been advised by Maples and Calder (Hong Kong) LLP that although there is no statutory enforcement in the Cayman Islands of judgments obtained in a U.S. court (and the Cayman Islands are not a party to any treaties for the reciprocal enforcement or recognition of such judgments), the courts of the Cayman Islands will, at common law, recognize and enforce a foreign monetary judgment of a foreign court of competent jurisdiction without any re-examination of the merits of the underlying dispute based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay a liquidated sum for which such judgment has been given, provided such judgment (i) is given by a foreign court of competent jurisdiction, (ii) imposes on the judgment debtor a liability to pay a liquidated sum for which the judgment has been given, (iii) is final and conclusive, (iv) is not in respect of taxes, a fine or a penalty, and (v) was not obtained in a manner and is not of a kind the enforcement of which is contrary to natural justice or the public policy of the Cayman Islands.
To our knowledge, as of March 31, 2025, 3,639,081,320 of our Class A ordinary shares were held by one record holder in the United States, which is the depositary of our ADS program. None of our Class B ordinary shares were held by record holders in the United States.
To our knowledge, as of March 31, 2026, 3,840,969,930 of our Class A ordinary shares were held by one record holder in the United States, which is the depositary of our ADS program. None of our Class B ordinary shares were held by record holders in the United States.
These shares, however, are not included in the computation of the percentage ownership of any other person. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares Beneficially Owned ​ ​ Class A Ordinary ​ Class B Ordinary ​ Total Ordinary ​ % of Beneficial ​ % of Aggregate ​ ​ Shares ​ Shares ​ Shares ​ Ownership † ​ Voting Power†† Directors and Executive Officers**: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Long Chen (1) — 890,677,378 890,677,378 15.9 72.7 Shares subject to voting proxy (2) — 151,717,482 151,717,482 2.7 12.4 Total (1)(2) — 1,042,394,860 1,042,394,860 18.6 85.1 Junyu Li (3) — 50,000,000 50,000,000 0.9 4.1 Changxiang Yang — * * * * Cindy Xiaofan Wang — — — — — He Xu — — — — — Chun Chiu Lai — — — — — Yang Liu — — — — — Shuang Liu — — — — — All Directors and Executive Officers as a Group — 1,042,394,860 1,042,394,860 18.6 85.1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Principal Shareholders: Phoenix ZKH Limited (1) — 890,677,378 890,677,378 15.9 72.7 Eastern Bell related entities and an affiliate (4) 818,170,300 — 818,170,300 14.6 2.7 Tencent Mobility Limited (5) 526,845,143 — 526,845,143 9.4 1.7 Genesis Capital related entities (6) 396,849,600 — 396,849,600 7.1 1.3 Canada Pension Plan Investment Board (7) 371,648,061 — 371,648,061 6.6 1.2 Tiger Global Management, LLC (8) 290,178,469 — 290,178,469 5.2 0.9 Notes: * Aggregate number of shares account for less than one percent of our total ordinary shares outstanding as of March 31, 2025. 124 Table of Contents ** Except as indicated otherwise below, the business address of our directors and executive officers is 7/F, Tower 4, Libao Plaza, No. 36 Shenbin Road, Minhang District, Shanghai, 201106, People’s Republic of China.
These shares, however, are not included in the computation of the percentage ownership of any other person. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares Beneficially Owned ​ ​ Class A Ordinary ​ Class B Ordinary ​ Total Ordinary ​ % of Beneficial ​ % of Aggregate ​ ​ Shares ​ Shares ​ Shares ​ Ownership † ​ Voting Power†† Directors and Executive Officers**: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Long Chen (1) ​ ​ ​ — ​ ​ ​ 890,677,378 ​ ​ ​ 890,677,378 ​ ​ ​ 16.0 ​ ​ ​ 73.9 Shares subject to voting proxy (2) — 132,217,512 132,217,512 2.4 11.0 Total (1)(2) — 1,022,894,890 1,022,894,890 18.4 84.9 Changxiang Yang — * * * * Cindy Xiaofan Wang — — — — — He Xu — — — — — Chun Chiu Lai — — — — — Yang Liu — — — — — Shuang Liu — — — — — All Directors and Executive Officers as a Group — 1,022,894,890 1,022,894,890 18.4 84.9 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Principal Shareholders: ​ ​ ​ ​ ​ Phoenix ZKH Limited (1) — 890,677,378 890,677,378 16.0 73.9 Eastern Bell related entities and an affiliate (3) 818,170,300 — 818,170,300 14.7 2.7 Tencent Mobility Limited (4) 526,845,143 — 526,845,143 9.5 1.7 Genesis Capital related entities (5) 396,849,600 — 396,849,600 7.1 1.3 Canada Pension Plan Investment Board (6) 371,648,061 — 371,648,061 6.7 1.2 Notes: * Aggregate number of shares account for less than one percent of our total ordinary shares outstanding as of March 31, 2026. ** Except as indicated otherwise below, the business address of our directors and executive officers is 7/F, Tower 4, Libao Plaza, No. 36 Shenbin Road, Minhang District, Shanghai, 201106, People’s Republic of China.
The executive officer may resign at any time with a 60-day advance written notice. 118 Table of Contents Each executive officer has agreed to hold, both during and after the termination or expiry of his or her employment agreement, in strict confidence and not to use, except as required in the performance of his or her duties in connection with the employment or pursuant to applicable law, any of our confidential information or trade secrets, any confidential information or trade secrets of our clients or prospective clients, or the confidential or proprietary information of any third-party we receive and for which we have confidential obligations.
Each executive officer has agreed to hold, both during and after the termination or expiry of his or her employment agreement, in strict confidence and not to use, except as required in the performance of his or her duties in connection with the employment or pursuant to applicable law, any of our confidential information or trade secrets, any confidential information or trade secrets of our customers or prospective customers, or the confidential or proprietary information of any third-party we receive and for which we have confidential obligations.
Directors and Executive Officers The following table sets forth information regarding our directors and executive officers as of the date of this annual report on Form 20-F. ​ ​ ​ ​ ​ Directors and Executive Officers ​ Age ​ Position/Title Long Chen 56 Chairman of the Board of Directors and Chief Executive Officer Junyu Li 45 Director and Vice President Changxiang Yang 40 Director and Vice President Yang Liu 43 Director and Chief Technology Officer Cindy Xiaofan Wang 49 Independent Director He Xu 48 Independent Director Chun Chiu Lai 38 Chief Financial Officer Shuang Liu 43 Vice President ​ Mr.
Directors and Executive Officers The following table sets forth information regarding our directors and executive officers as of the date of this annual report on Form 20-F. ​ ​ ​ ​ ​ Directors and Executive Officers ​ ​ ​ Age ​ ​ ​ Position/Title Long Chen 57 Chairman of the Board of Directors and Chief Executive Officer Changxiang Yang 41 Director and Vice President Yang Liu 44 Director and Chief Technology Officer Yunjie Han 43 Director and Chief Human Resources Officer Cindy Xiaofan Wang 50 Independent Director He Xu 49 Independent Director Chun Chiu Lai 39 Chief Financial Officer Shuang Liu 44 Vice President ​ Mr.
The following table summarizes, as of March 31, 2025, the number of ordinary shares of ZKH Group Limited underlying outstanding options that were granted by ZKH Group Limited to its directors and executive officers, excluding options that were exercised, forfeited or canceled after the dates of grant. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares ​ ​ ​ ​ ​ Underlying ​ ​ ​ ​ ​ ​ ​ ​ Outstanding ​ ​ ​ ​ ​ ​ ​ ​ Options ​ Exercise Price ​ ​ ​ Date of Name ​ Granted ​ (US$/Share) ​ Date of Grant ​ Expiration Long Chen * par value ​ December 1, 2023 ​ December 1, 2033 Junyu Li * par value ​ May 31, 2020 ​ May 31, 2030 ​ * par value ​ July 1, 2022 ​ July 1, 2032 Changxiang Yang * par value ​ May 31, 2020 ​ May 31, 2030 ​ * par value ​ July 1, 2022 ​ July 1, 2032 ​ * 0.2609 ​ December 1, 2023 ​ December 1, 2033 Yang Liu ​ * ​ 0.2609 ​ July 1, 2023 ​ July 1, 2033 ​ ​ * ​ 0.2609 ​ December 1, 2023 ​ December 1, 2033 Cindy Xiaofan Wang * par value ​ January 18, 2024 ​ January 18, 2034 He Xu * par value ​ January 18, 2024 ​ January 18, 2034 Chun Chiu Lai * 0.1015 ​ February 1, 2022 ​ February 1, 2032 ​ * 0.1015 ​ January 18, 2023 ​ January 18, 2033 Total 81,260,581 ​ ​ Note: * Less than one percent of our total outstanding shares. 120 Table of Contents The following table summarizes, as of March 31, 2025, the outstanding restricted share units that we granted to our current directors and executive officers and to other individuals as a group under the 2022 Plan: ​ ​ ​ ​ ​ ​ Ordinary Shares Underlying Restricted ​ Name ​ Share Units ​ Date of Grant Junyu Li * ​ January 18, 2025 Changxiang Yang * ​ January 18, 2025 Yang Liu * ​ January 18, 2025 Shuang Liu * ​ January 18, 2025 Other Individuals as a Group * ​ - Note: * Less than one percent of our total outstanding shares.
The following table summarizes, as of March 31, 2026, the number of ordinary shares of ZKH Group Limited underlying outstanding options that were granted by ZKH Group Limited to its directors and executive officers, excluding options that were exercised, forfeited or canceled after the dates of grant. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Underlying ​ ​ ​ ​ ​ ​ ​ ​ Outstanding ​ ​ ​ ​ ​ ​ ​ ​ Options ​ Exercise Price ​ ​ ​ Date of Name ​ Granted ​ (US$/Share) ​ Date of Grant ​ Expiration Long Chen * par value ​ December 1, 2023 ​ December 1, 2033 Changxiang Yang * par value ​ May 31, 2020 ​ May 31, 2030 ​ * par value ​ December 1,2023 ​ July 1, 2032 Yang Liu ​ * ​ 0.2609 ​ July 1, 2023 ​ July 1, 2033 ​ ​ * ​ 0.2609 ​ December 1,2023 ​ December 1, 2033 121 Table of Contents He Xu * par value ​ January 18, 2024 ​ January 18, 2034 ​ * par value ​ January 18, 2026 ​ January 18, 2036 Chun Chiu Lai * 0.1015 ​ February 1, 2022 ​ February 1, 2032 ​ * 0.1015 ​ January 18, 2023 ​ January 18, 2033 Total 80,060,067 ​ ​ ​ ​ ​ Note: * Less than one percent of our total outstanding shares.
Long Chen is our founder, chairman of the board of directors and chief executive officer. He has served in these roles since our inception. Mr. Chen is in charge of our overall strategy formation and management, operations, product development and research development. Mr. Chen received an executive MBA degree from China Europe International Business School in 2023. Mr.
Long Chen is our founder, chairman of the board of directors and chief executive officer. He has served in these roles since our inception. Mr. Chen is in charge of our overall strategy formation and management, operations, product development and research development. Mr.
Each committee’s members and functions are described below. Audit Committee . Our audit committee consists of Cindy Xiaofan Wang and He Xu. Cindy Xiaofan Wang is the chairperson of our audit committee.
We have adopted a charter for each of the three committees. Each committee’s members and functions are described below. Audit Committee . Our audit committee consists of Cindy Xiaofan Wang and He Xu. Cindy Xiaofan Wang is the chairperson of our audit committee.
Chen. 151,717,482 Class B ordinary shares are subject to such voting proxy. Mr. Chen disclaims beneficial ownership of such 151,717,482 Class B ordinary shares. Such delegation of voting rights caused Mr. Chen’s total voting power to increase to 85.0% as of March 31, 2025.
Chen. 132,217,512 Class B ordinary shares are subject to such voting proxy. Mr. Chen disclaims beneficial ownership of such 132,217,512 Class B ordinary shares. Such delegation of voting rights caused Mr. Chen’s total voting power to increase to 84.9% as of March 31, 2026.
He Xu has served as our independent director since December 2023. Mr. Xu joined Lenovo in 2001 and has held a number of managerial positions. Mr. Xu has served as chief executive officer of Liansheng Zhida (Hainan) Supply Chain Management Co., Ltd., an indirect subsidiary of Lenovo Group Limited (SEHK: 0992), since its inception. Prior to that, Mr.
Mr. Xu has served as chief executive officer of Liansheng Zhida (Hainan) Supply Chain Management Co., Ltd., an indirect subsidiary of Lenovo Group Limited (SEHK: 0992), since its inception. Prior to that, Mr.
We have the right to seek damages if a duty owed by our directors is breached.
We have the right to seek damages if a duty owed by our directors is breached. In certain limited exceptional circumstances, a shareholder may have the right to seek damages in our name if a duty owed by the directors is breached.
The calculations in the table below are based on 4,551,078,744 Class A ordinary shares and 1,042,394,860 Class B ordinary shares issued and outstanding as of March 31, 2025. Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
The calculations in the table below are based on 4,539,281,202 Class A ordinary shares and 1,022,894,890 Class B ordinary shares issued and outstanding as of March 31, 2026. ​ 126 Table of Contents Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
The following table sets forth the number of our employees by function as of December 31, 2024: ​ ​ ​ ​ As of Function ​ December 31, 2023 Warehousing and logistics 571 Research and development 223 Sales 1,217 Customer services 283 Product 668 General and administrative 300 TOTAL 3,262 ​ We also track the number of effective headcount as an indicator of our workforce productivity.
The following table sets forth the number of our employees by function as of December 31, 2025: ​ ​ ​ Function ​ ​ ​ As of December 31, 2025 Warehousing and logistics 467 Research and development 222 Sales 1,175 Customer services 260 Product 596 General and administrative 212 TOTAL 2,933 ​ We also track the number of effective headcount as an indicator of our workforce productivity.
We have determined that each of He Xu and Cindy Xiaofan Wang satisfies the “independence” requirements of Section 303A of the Corporate Governance Rules of the New York Stock Exchange. The nominating and corporate governance committee assists the board of directors in selecting individuals qualified to become our directors and in determining the composition of the board and its committees.
Our nominating and corporate governance committee consists of He Xu, Cindy Xiaofan Wang and Long Chen. He Xu is the chairperson of our nominating and corporate governance committee. We have determined that each of He Xu and Cindy Xiaofan Wang satisfies the “independence” requirements of Section 303A of the Corporate Governance Rules of the New York Stock Exchange.
Changxiang Yang has served as our director since December 2021. Mr. Yang has served as our vice president since December 2018. Mr. Yang joined us since our inception and served multiple positions in our company since then. Prior to that, Mr.
Chen received an executive MBA degree from China Europe International Business School in 2023. 118 Table of Contents Mr. Changxiang Yang has served as our director since December 2021. Mr. Yang has served as our vice president since December 2018. Mr. Yang joined us since our inception and served multiple positions in our company since then. Prior to that, Mr.
In addition, it will be difficult for U.S. shareholders to originate actions against us in mainland China in accordance with PRC laws because we are incorporated under the laws of the Cayman Islands and it will be difficult for U.S. shareholders, by virtue only of holding the ADSs or ordinary shares, to establish a connection to mainland China for a court in mainland China to have jurisdiction as required under the PRC Civil Procedures Law.
Such a judgment may not, in any event, be so enforced in Hong Kong if (a) it was obtained by fraud; (b) the proceedings in which the judgment was obtained were opposed to natural justice; (c) its enforcement or recognition would be contrary to the public policy of Hong Kong; (d) the court of the United States was not jurisdictionally competent; or (e) the judgment was in conflict with a prior Hong Kong judgment. 129 Table of Contents In addition, it will be difficult for U.S. shareholders to originate actions against us in Chinese mainland in accordance with PRC laws because we are incorporated under the laws of the Cayman Islands and it will be difficult for U.S. shareholders, by virtue only of holding the ADSs or ordinary shares, to establish a connection to Chinese mainland for a court in Chinese mainland to have jurisdiction as required under the PRC Civil Procedures Law.
Long Chen has the ability to determine all matters requiring approval by shareholders of ZKH Group Limited, except that holders of Class B ordinary shares shall abstain from voting in the event that ZKH Group Limited seeks its shareholders’ approval with respect to any amendment of its Amended and Restated 2022 Stock Incentive Plan.
Long Chen has the ability to determine all matters requiring approval by shareholders of ZKH Group Limited, except that holders of Class B ordinary shares shall abstain from voting in the event that ZKH Group Limited seeks its shareholders’ approval with respect to any amendment of its Amended and Restated 2022 Stock Incentive Plan. 127 Table of Contents (3) Represents (i) 706,928,800 Class A ordinary shares held by Shanghai Xiuying Enterprise Management Consulting Partnership (Limited Partnership), a limited partnership incorporated in Chinese mainland, (ii) 79,100,600 Class A ordinary shares held by Eastern Bell International XIII Limited, a Hong Kong limited company, and (iii) 32,140,900 Class A ordinary shares held by Ningbo Huichen Runze Investment Partnership (L.P.), a limited partnership incorporated in Chinese mainland.
Liu received a bachelor’s degree in computer science and technology from Beijing University of Posts and Telecommunications in 2005 and a master’s degree in computer science and technology from Tsinghua University in 2007. 117 Table of Contents Ms. Cindy Xiaofan Wang has served as our independent director since December 2023. Ms.
Liu received a bachelor’s degree in computer science and technology from Beijing University of Posts and Telecommunications in 2005 and a master’s degree in computer science and technology from Tsinghua University in 2007. Mr. Yunjie Han has served as the chief human resources officer of the Company since June 2024.
Wang has served as the chief financial officer of Trip.com Group Limited (Nasdaq: TCOM), since November 2013 and its executive vice president since May 2016. Prior to that, Ms. Wang was its vice president since January 2008. Ms. Wang joined Trip.com Group Limited in December 2001 and has held a number of managerial positions. Ms.
Han received his bachelor’s degree in human resources management from Shanghai Jiao Tong University in 2006. Ms. Cindy Xiaofan Wang has served as our independent director since December 2023. Ms. Wang has served as the chief financial officer of Trip.com Group Limited (Nasdaq: TCOM), since November 2013 and its executive vice president since May 2016. Prior to that, Ms.
Wang won the Best CFO Award by Institutional Investor in the 2017 All-Asia Executive Team Rankings in 2017, and China Best CFO Leadership Award by SNAI/ACCA/ Korn Ferry in 2021. Previously, Ms. Wang worked with PricewaterhouseCoopers Zhong Tian CPAs Co., Ltd. from 1997 to 1999. Ms. Wang has been a director of MakeMyTrip Limited (Nasdaq: MMYT) since August 2019.
Wang was its vice president since January 2008. Ms. Wang joined Trip.com Group Limited in December 2001 and has held a number of managerial positions. Ms. Wang won the Best CFO Award by Institutional Investor in the 2017 All-Asia Executive Team Rankings in 2017, and China Best CFO Leadership Award by SNAI/ACCA/ Korn Ferry in 2021. Previously, Ms.
She also served on the board of directors of Huazhu Group Limited (Nasdaq: HTHT, SEHK: 1179) from January 2018 to July 2020. Ms. Wang received a master of business administration from Massachusetts Institute of Technology in 2013 and obtained her bachelor’s degree from Shanghai Jiao Tong University in 1997. Ms. Wang is a Certified Public Accountant (CPA). Mr.
Wang received a master of business administration from Massachusetts Institute of Technology in 2013 and obtained her bachelor’s degree from Shanghai Jiao Tong University in 1997. Ms. Wang is a Certified Public Accountant (CPA). Mr. He Xu has served as our independent director since December 2023. Mr. Xu joined Lenovo in 2001 and has held a number of managerial positions.
In certain limited exceptional circumstances, a shareholder may have the right to seek damages in our name if a duty owed by the directors is breached. 122 Table of Contents Our board of directors has all the powers necessary for managing, and for directing and supervising, our business affairs.
Our board of directors has all the powers necessary for managing, and for directing and supervising, our business affairs.
Removed
Junyu Li has served as our director since December 2021. Mr. Li has served as our vice president since June 2018. Mr. Li joined us since our inception and served multiple positions in our company since then. Mr. Li received a bachelor’s degree in environmental engineering from Fudan University in 2002. Mr.
Added
He brings extensive experience in human resources and corporate management across diverse industries. Prior to joining the Company, he served as general manager of the human resources center at KUKA Home Co., Ltd. from November 2021 to June 2024. Before that, Mr.
Removed
Nominating and Corporate Governance Committee . Our nominating and corporate governance committee consists of He Xu, Cindy Xiaofan Wang and Long Chen. He Xu is the chairperson of our nominating and corporate governance committee.
Added
Han served as general manager of both the human resources department and the corporate management department at HNA Group (International) Co., Ltd. from March 2017 to October 2021. Earlier in his career, he held the position of human resources director at ZTE Corporation from August 2009 to February 2017. Mr.
Removed
Terms of Directors and Officers Our directors may be appointed by an ordinary resolution of our shareholders.
Added
Wang worked with PricewaterhouseCoopers Zhong Tian CPAs Co., Ltd. from 1997 to 1999. Ms. Wang also served on the board of MakeMyTrip Limited (Nasdaq: MMYT) from August 2019 to May 2024. She also served on the board of directors of Huazhu Group Limited (Nasdaq: HTHT, SEHK: 1179) from January 2018 to July 2020. Ms.
Removed
(3) Represents 50,000,000 Class B ordinary shares directly held by June Rain Max Limited, a British Virgin Islands company, which is owned as to 99% by June Rain Sunstar Limited as non-voting shares and 1% by June Rain Limited as voting shares.
Added
The following table summarizes, as of March 31, 2026, the outstanding restricted share units that we granted to our current directors and executive officers and to other individuals as a group under the 2022 Plan: ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares Underlying Restricted ​ ​ ​ ​ Name ​ Share Units ​ Date of Grant Long Chen * ​ January 18, 2026 ​ ​ * ​ January 18, 2026 Changxiang Yang * ​ January 18, 2025 ​ ​ * ​ January 18, 2025 ​ ​ * ​ January 18, 2026 ​ ​ * ​ January 18, 2026 Yang Liu * ​ January 18, 2025 ​ ​ * ​ January 18, 2025 ​ ​ * ​ January 18, 2026 ​ ​ * ​ January 18, 2026 Shuang Liu * ​ January 18, 2025 ​ ​ * ​ January 18, 2025 ​ ​ * ​ January 18, 2026 Yunjie Han ​ * ​ January 18, 2025 ​ ​ * ​ January 18, 2025 ​ ​ * ​ January 18, 2026 Other Individuals as a Group * ​ - Note: * Less than one percent of our total outstanding shares.
Removed
June Rain Sunstar Limited is controlled by June Rain Trust, a trust established under the laws of Cayman Islands and managed by GIL Trust Limited as the trustee. Mr. Junyu Li is the settlor and beneficiary of June Rain Trust.
Added
The nominating and corporate governance committee assists the board of directors in selecting individuals qualified to become our directors and in determining the composition of the board and its committees.
Removed
Under this structure, this trust does not exercise any voting and dispositive power in respect of all ordinary shares held by June Rain Max Limited in ZKH Group Limited and only enjoys economic interests to such ordinary shares. June Rain Limited is a private company established under the law of British Virgin Islands and is wholly owned by Mr.
Added
However, the Cayman Islands courts are unlikely to enforce a judgment obtained from the United States courts under civil liability provisions of the securities laws if such judgment is determined by the courts of the Cayman Islands to give rise to obligations to make payments that are penal or punitive in nature.
Removed
Junyu Li. The registered address of June Rain Max Limited is Craigmuir Chambers, Road Town, Tortola, VG 1110, British Virgin Islands. The registered address of June Rain Sunstar Limited is Ritter House, Wickhams Cay II, PO Box 3170, Road Town, Tortola, VG1110, British Virgin Islands.
Removed
The registered address of June Rain Limited is Ritter House, Wickhams Cay II, PO Box 3170, Road Town, Tortola, VG1110, British Virgin Islands.
Removed
(4) Represents (i) 706,928,800 Class A ordinary shares held by Shanghai Xiuying Enterprise Management Consulting Partnership (Limited Partnership), a limited partnership incorporated in mainland China, (ii) 79,100,600 Class A ordinary shares held by Eastern Bell International XIII Limited, a Hong Kong limited company, and (iii) 32,140,900 Class A ordinary shares held by Ningbo Huichen Runze Investment Partnership (L.P.), a limited partnership incorporated in mainland China.
Removed
As of March 31, 2025, 349,073,060 of such shares had been converted into ADSs, each representing 35 Class A ordinary shares, and the remaining Class A ordinary shares are held in the form of ordinary share. 125 Table of Contents (8) Represents 290,178,469 Class A ordinary shares beneficially owned by Tiger Global Management, LLC and its affiliated entities and an individual.
Removed
Such shareholding information is based on the information contained in the Schedule 13G jointly filed by Tiger Global Private Investment Partners X, L.P., Tiger Global PIP Performance X, L.P., Tiger Global PIP Management X, Ltd., Tiger Global Management, LLC and Charles P. Coleman III with SEC on February 14, 2024.
Removed
It may also be difficult for you to enforce judgments obtained in U.S. courts based on the civil liability provisions of the U.S. federal securities laws against us and our officers and directors.
Removed
Such a judgment may not, in any event, be so enforced in Hong Kong if (a) it was obtained by fraud; (b) the proceedings in which the judgment was obtained were opposed to natural justice; (c) its enforcement or recognition would be contrary to the public policy of Hong Kong; (d) the court of the United States was not jurisdictionally competent; or (e) the judgment was in conflict with a prior Hong Kong judgment.

Other ZKH 10-K year-over-year comparisons