ZKH Group Ltd. (NYSE: ZKH) saw its shares surge 5.26% in Tuesday's trading session following the release of its fourth quarter and full-year 2024 financial results. The company, a leading maintenance, repair and operations (MRO) procurement service platform in China, reported mixed results but highlighted improvements in profitability and a positive outlook for its domestic operations.

For the fourth quarter, ZKH Group reported a net loss of RMB29.1 million ($4 million), compared to a net profit of RMB20.2 million in the same period last year. However, the company's gross margin remained stable at 17.1% year-over-year, despite a 3% decrease in net revenues to RMB2.37 billion ($324.7 million). The full-year results showed a slight 0.5% increase in net revenues to RMB8.76 billion ($1.2 billion), with a notable improvement in gross margin from 16.7% in 2023 to 17.2% in 2024.

Eric Long Chen, Chairman and CEO of ZKH Group, emphasized the company's progress in enhancing profitability through a growing customer base, increased customer loyalty, and advancements in digitalization and artificial intelligence. Despite some challenges in the demand environment, Chen expressed confidence in achieving full-year profitability for ZKH's domestic operations in 2025. The market's positive reaction suggests investors are optimistic about the company's strategic direction and improved profitability outlook, despite the short-term bottom-line pressure.