ZK International Group Co., Ltd. Announces Earnings Results for the First Half of Fiscal Year 2025
MWN-AI** Summary
ZK International Group Co., Ltd. (ZKIN) recently reported its unaudited financial results for the first half of fiscal year 2025, which ended on March 31, 2025. The company, a designer and manufacturer of stainless and carbon steel piping products, posted a revenue of $40 million, marking a significant decrease of 24.37% from the $52.89 million reported in the same period of the previous year. This decline was primarily attributed to reduced market demand, particularly in the real estate sector, which saw slower construction activity and investment momentum.
Gross profit also fell to $2.19 million, a 34.63% decrease from the previous year, leading to a gross margin of 5.47%. The decline in sales volume, compounded by rising raw material costs, severely impacted the company’s profitability. As a result, ZK International incurred an operating loss of $0.49 million, compared to a loss of $0.16 million in the prior year, translating to an operating margin of (1.22)%.
The net loss widened to $0.80 million, compared to a net loss of $0.48 million during the same period last year, indicating ongoing challenges for the company in managing both operational efficiency and market conditions.
On the balance sheet, cash and equivalents drastically reduced to $1.61 million from $4.16 million, while short-term borrowings increased to $11.19 million. Despite these financial setbacks, ZK International Group remains focused on its commitment to providing high-quality, sustainable piping solutions and has secured patents and certifications that bolster its competitive edge in the industry. The outlook for the company remains cautious as it navigates through recovering market dynamics.
MWN-AI** Analysis
ZK International Group Co., Ltd. (ZKIN) has reported a challenging performance in the first half of fiscal year 2025, with revenues declining by 24.37% to $40 million compared to $52.89 million in the prior year. The significant revenue drop, linked primarily to weakened demand in the real estate market, has raised concerns about the company's operational stability and growth trajectory.
The company's gross profit also fell sharply, down 34.63%, resulting in a gross margin of 5.47%. This erosion of profitability was exacerbated by rising raw material costs, particularly for nickel, essential for their stainless steel products. With an operating loss of $0.49 million and a net loss that widened to $0.80 million, ZK International's financial health warrants cautious scrutiny from potential investors.
Despite these challenges, ZK International retains a solid market position through its extensive portfolio of patents and certifications in high-performance piping solutions. They continue to emphasize their commitment to sustainable practices and quality, which may attract interest in future projects, especially as the global focus on infrastructure and sustainable utilities grows.
Investors should consider several factors moving forward. First, the recovery of the real estate market is critical for ZKIN’s revenue rebound; successful navigation of this sector can revive sales. Cost management strategies, particularly concerning raw materials, will also be pivotal. Additionally, evaluating the implications of current liabilities, including a rise in bank borrowings, is crucial when gauging long-term solvency.
In summary, while ZK International faces short-term headwinds, those with a long-term investment horizon might view this as an opportunity to accumulate shares at lower prices, anticipating a rebound as market conditions improve and infrastructure investments gain traction. However, investors should remain vigilant and closely monitor the company's operating performance and market recovery indicators.
**MWN-AI Summary and Analysis is based on asking OpenAI to summarize and analyze this news release.
PR Newswire
WENZHOU, China , Sept. 29, 2025 /PRNewswire/ -- ZK International Group Co., Ltd. (ZKIN) ("ZK International" or the "Company"), a designer, engineer, manufacturer, and supplier of patented high-performance stainless steel and carbon steel pipe products primarily used for water and gas supplies, today announced its unaudited financial results for the six months ended March 31 , 2025.
Financial Highlights for the First Half of Fiscal Year 202 5
For the Six Months Ended March 31, | |||||||||||||
($ millions, except per share data) | 2025 | 2024 | % Change | ||||||||||
Revenue | $ | 40.00 | $ | 52.89 | (24.37) | % | |||||||
Gross profit | $ | 2.19 | $ | 3.35 | (34.63) | % | |||||||
Gross margin | 5.47 | % | 6.33 | % | -0.86 | % | pp* | ||||||
Income loss from operations | $ | (0.49) | $ | (0.16) | 197.83 | % | |||||||
Operating margin | (1.22) | % | (0.31) | % | -0.91 | % | pp* | ||||||
Net loss | $ | (0.80) | $ | (0.48) | 66.48 % | ||||||||
Diluted earnings per share | $ | (0.02) | $ | (0.01) | - | ||||||||
* pp: percentage point(s) |
- Revenue decreased by 24.37% to $40.00 million for the six months ended March 31, 2025 from $52.89 million for the six months ended March 31, 2024 . During the first fiscal half of 2025, we faced a decrease in demand for our piping products, mainly due to the slow recovery in the real estate market (such as reduced construction projects and weakened investment momentum) during the fiscal half period. Despite our efforts to manage costs related to raw materials (including nickel, a key component of stainless steel), the dampened market demand not only lowered our sales volume but also limited our ability to adjust pricing. As a result, the combined effect of weaker sales and challenging market conditions led to the revenue decline for the six months ended March 31, 2025 .
- Gross profit decreased by 34.63% to $2.19 million . Gross margin was 5.47%, compared to 6.33% for the same period of the prior fiscal period. The falling revenue, along with increased raw materials costs (particularly for stainless steel which is a key component of our products), has outpaced our cost optimization efforts which led to a decline in gross margin.
- Loss from operations was $0.49 million , compared to loss from operations of $0.16 million for the same period of the prior fiscal year. Operating margin was (1.22)%, compared to (0.31)% for the same period of the prior fiscal year.
- Net loss was $0.8 million . This compared to a net loss of $0.48 million for the same period of the prior fiscal year.
Financial Results for the First Half of Fiscal Year 202 5
Revenue
Revenue decreased by $12,890,784.00 or 24.37%, to $39,996,372 for the six months ended March 31, 2025 from $52,887,156 for the six months ended March 31, 2024 . During the first fiscal half of 2025, we faced a decrease in demand for our piping products, mainly due to the slow recovery in the real estate market (such as reduced construction projects and weakened investment momentum) during the fiscal half period. Despite our efforts to manage costs related to raw materials (including nickel, a key component of stainless steel), the dampened market demand not only lowered our sales volume but also limited our ability to adjust pricing. As a result, the combined effect of weaker sales and challenging market conditions led to the revenue decline for the six months ended March 31, 2025 .
Gross Profit
Our gross profit decreased by $1,163,908 , or 34.74%, to $2,186,102 for the six months ended March 31, 2025 from $3,350,010 for the six months ended March 31, 2024 . Gross profit margin was 5.47% for the six months ended March 31, 2025 , as compared to 6.33% for the six months ended March 31, 2024 . The decrease of our gross profit was mainly attributable to the revenue decline amid real estate market sector. Moreover, persistent raw materials costs (particularly for stainless steel, a key component of our products) have outpaced our cost optimization efforts, which led to a decline in gross margin.
Selling and Marketing Expenses
We incurred $881,686 in selling and marketing expenses for the six months ended March 31, 2025 , compared to $880,824 for the six months ended March 31, 2024 . Selling and marketing expenses increased by $862 , or 0.10%, during the six months ended March 31, 2025 compared to the six months ended March 31, 2024 .
General and Administrative expenses
We incurred $1,396,466 in general and administrative expenses for the six months ended March 31, 2025 , compared to $2,010,566 for the six months ended March 31, 2024 . General and administrative expenses decreased by $614,100 or 30.54%, for the six months ended March 31, 2025 compared to the same period in 2024. The decrease is primarily due to reductions in consulting expenses and employee related costs.
Research and Development Expenses
We incurred $396,934 in research and development expenses for the six months ended March 31, 2025 , compared to $622,805 for the six months ended March 31, 2024 . R&D expenses decreased by $225,871 , or 36.27%, for the six months ended March 31, 2025 compared to the same period in 2024.
Income (loss) from Operations
As a result of the factors described above, we incurred operating loss of $488,984 for the six months ended March 31, 2025 , compared to operating loss of $164,185 for the six months ended March 31, 2024 , an increase of operating loss of $324,799 .
Other Income (Expenses)
Our interest income and expenses were $4,052 and $349,499 , respectively, for the six months ended March 31, 2025 , compared to interest income and expenses of $7,868 and $411,045 , respectively, for the six months ended March 31, 2024 .
Net Income (loss)
As a result of the factors described above, we incurred net loss of $802,028 for the six months ended March 31, 2025 , compared to net loss of $481,753 for the six months ended March 31, 2024 , an increase in net loss of $320,275 .
Financial Condition
As of March 31, 2025 , cash and cash equivalents, restricted cash and short-term investments totaled $1.61 million , compared to $4.16 million as of September 30, 2024 . Short-term bank borrowings were $11.19 million as of March 31, 2025 , compared to $10.26 million as of September 30 , 2024.
Accounts receivable was $19.82 million as of March 31, 2025 , compared to $22.39 million as of September 30, 2024 . Inventories were $15.49 million as of March 31, 2025 , compared to $13.53 million as of September 30, 2024 . Accounts payable was $2.43 million as of March 31, 2025 , compared to $3.13 million as of September 30, 2024 .
Total current assets and current liabilities were $55.30 million and $45.39 million , respectively, leading to a current ratio of 1.22 as of March 31, 2025 . This compared to total current assets and current liabilities were $62.74 million and $24.89 million , respectively, and current ratio of 1.26 as of September 30, 2024 .
About ZK International Group Co., Ltd.
ZK International Group Co., Ltd. is a China -based designer, engineer, manufacturer, and supplier of patented high-performance stainless steel and carbon steel pipe products that require sophisticated water or gas pipeline systems. The Company owns 33 patents, 21 trademarks, 2 Technical Achievement Awards, and 10 National and Industry Standard Awards. ZK International is Quality Management System Certified (ISO9001), Environmental Management System Certified (ISO1401), and a National Industrial Stainless Steel Production Licensee that is focused on supplying steel piping for the multi-billion dollar industries of Gas and Water sectors. ZK has supplied stainless steel pipelines for over 2,000 projects, including the Beijing National Airport, the "Water Cube", and "Bird's Nest", which were venues for the 2008 Beijing Olympics. Emphasizing superior properties and durability of its steel piping, ZK International is providing a solution for the delivery of high quality, highly sustainable, environmentally sound drinkable water not only to the China market but also to international markets such as Europe , East Asia , and Southeast Asia .
For more information please visit www.ZKInternationalGroup.com . Additionally, please follow the Company on Twitter , Facebook , YouTube , and Weibo . For further information on the Company's SEC filings please visit www.sec.gov .
Safe Harbor Statement
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. Without limiting the generality of the foregoing, words such as "may," "will," "expect," "believe," "anticipate," "intend," "could," "estimate" or "continue" or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. These forward-looking statements are not guarantee of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict and many of which are beyond the control of ZK International. Actual results may differ from those projected in the forward-looking statements due to risks and uncertainties, as well as other risk factors that are included in the Company's filings with the U.S. Securities and Exchange Commission. Although ZK International believes that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the results contemplated in forward-looking statements will be realized. In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by ZK International or any other person that their objectives or plans will be achieved. ZK International does not undertake any obligation to revise the forward-looking statements contained herein to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
ZK International Group Co., Ltd. and Subsidiaries | ||||||||
Consolidated Statements of Income and Comprehensive Income (Loss) | ||||||||
For the Six Months Ended March 31, 2025 and 2024 (Unaudited) | ||||||||
( IN U.S. DOLLARS, EXCEPT SHARE DATA) | ||||||||
For the Six Months Ended | ||||||||
2025 | 2024 | |||||||
Revenues | 39,996,372 | $ | 52,887,156 | |||||
Cost of sales | 37,810,270 | 49,537,146 | ||||||
Gross profit | 2,186,102 | 3,350,010 | ||||||
Operating expenses: | ||||||||
Selling and marketing expenses | 881,686 | 880,824 | ||||||
General and administrative expenses | 1,396,466 | 2,010,566 | ||||||
Research and development costs | 396,934 | 622,805 | ||||||
Total operating expenses | 2,675,086 | 3,514,195 | ||||||
Operating income (loss) | (488,984) | (164,185) | ||||||
Other income (expenses): | ||||||||
Interest expenses | (349,499) | (411,045) | ||||||
Interest income | 4,052 | 7,868 | ||||||
Other income (expenses), net | 46,574 | 92,816 | ||||||
Total other income (expenses), net | (298,873) | (310,361) | ||||||
Income (Loss) before income taxes | (787,857) | (474,546) | ||||||
Income tax provision | (14,171) | (7,207) | ||||||
Net income (loss) | (802,028) | (481,753) | ||||||
Net income (loss) attributable to non-controlling interests | (5,227) | - | ||||||
Net income (loss) attributable to ZK International Group Co., Ltd. | (796,801) | (481,753) | ||||||
Net income (loss) | (802,028) | (481,753) | ||||||
Other comprehensive income: | ||||||||
Foreign currency translation adjustment | ||||||||
Total comprehensive income (loss) | (802,028) | (481,753) | ||||||
Comprehensive income (loss) attributable to non-controlling interests | (1,688) | (9,284) | ||||||
Comprehensive income attributable to ZK International Group Co., Ltd. | (803,716) | (472,468) | ||||||
Basic and diluted earnings per share | ||||||||
Basic | (0.15) | (0.11) | ||||||
Diluted | (0.15) | (0.11) | ||||||
Weighted average number of shares outstanding | ||||||||
Basic | 5,232,469 | 4,492,280 | ||||||
Diluted | 5,232,469 | 4,492,280 |
ZK International Group Co., Ltd. and Subsidiaries | ||||||
Consolidated Balance Sheets | ||||||
As of March 31, 2025 and September 30, 2024 (Unaudited) | ||||||
( IN U.S. DOLLARS) | ||||||
As of September 30, | ||||||
2024 | 2023 | |||||
Assets | ||||||
Current assets | ||||||
Cash and cash equivalents | $ | 1,559,434 | $ | 4,009,387 | ||
Restricted cash | 46,714 | 103,917 | ||||
Short-term Investment | - | 50,111 | ||||
Accounts receivable, net of allowance for doubtful accounts and provision for expected credit loss | 19,816,792 | 22,393,810 | ||||
Notes receivable | 750,672 | 355,761 | ||||
Prepayment, deposit and other receivable - current | 8,166,269 | 4,657,014 | ||||
Inventories | 15,487,586 | 13,528,170 | ||||
Advance to suppliers | 9,469,805 | 17,641,946 | ||||
Total current assets | 55,297,272 | 62,740,116 | ||||
Property, plant and equipment, net | 7,957,533 | 8,104,335 | ||||
Right-of-use asset – Operating lease | 212,915 | 162,103 | ||||
Intangible assets, net | 1,234,704 | 1,282,939 | ||||
Deferred tax assets | — | |||||
Prepayment, deposit and other receivable - Non-current | 261,576 | 271,201 | ||||
Long-term prepayment | — | |||||
Long-term accounts receivable | 4,788,657 | 5,379,311 | ||||
Long-term investment | 2,037,086 | 2,046,868 | ||||
TOTAL ASSETS | $ | 71,789,743 | $ | 79,986,873 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 2,426,968 | $ | 3,125,104 | ||
Accrued expenses and other current liabilities | 3,749,209 | 4,261,080 | ||||
Operating lease liability - current | - | 12,280 | ||||
Accrued payroll and welfare | 2,662,269 | 2,323,244 | ||||
Advance from customers | 10,081,298 | 14,861,280 | ||||
Due to related parties | 70,500 | 216,906 | ||||
Convertible debentures | 4,917,683 | 4,917,683 | ||||
Bank borrowings - current | 11,194,069 | 10,259,918 | ||||
Long-term Bank borrowings - current | 9,795,775 | 9,765,447 | ||||
Notes payables | 493,219 | 124,957 | ||||
Total current liabilities | 45,390,990 | 49,867,899 | ||||
Operating lease liability – non-current | — | |||||
Bank borrowings – non-current | - | 1,802,468 | ||||
TOTAL LIABILITIES | $ | 45,390,990 | $ | 51,670,367 | ||
COMMITMENTS AND CONTINGENCIES | — | |||||
Equity | ||||||
Common stock, no par value, 50,000,000 shares authorized, 5,232,469 and 5,163,946 shares | — | |||||
Additional paid-in capital | 77,886,898 | 77,886,898 | ||||
Statutory surplus reserve | 3,176,556 | 3,176,556 | ||||
Subscription receivable | (125,000) | (125,000) | ||||
Retained earnings (Deficits) | (51,245,374) | (50,448,573) | ||||
Accumulated other comprehensive loss | (3,449,608) | (2,326,968) | ||||
Total equity attributable to ZK International Group Co., Ltd. | 26,243,472 | 28,162,913 | ||||
Equity attributable to non-controlling interests | 155,281 | 153,593 | ||||
Total equity | 26,398,753 | 28,316,506 | ||||
TOTAL LIABILITIES AND EQUITY | $ | 71,789,743 | $ | 79,986,873 |
SOURCE ZK International Group Co., Ltd.
FAQ**
What specific strategies is ZK International Group Co., Ltd. (ZKIN) implementing to address the decrease in demand for its piping products amid challenges in the real estate market?
How does ZK International Group Co., Ltd. (ZKIN) plan to manage increasing raw material costs, particularly for stainless steel, which is impacting its gross margin?
Given the operational losses reported, what measures are being taken by ZK International Group Co., Ltd. (ZKIN) to improve profitability in the upcoming periods?
Can ZK International Group Co., Ltd. (ZKIN) provide insights on how its pipeline projects align with global sustainability goals, especially in light of its declining revenue and increasing operational expenses?
**MWN-AI FAQ is based on asking OpenAI questions about ZK International Group Co. Ltd (NASDAQ: ZKIN).
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