LZ Technology reports 44.6% revenue growth, expands into Middle East

HUZHOU CITY, China - LZ Technology Holdings Limited (NASDAQ:LZMH) reported total revenue of RMB 823 million (USD 113 million) for fiscal year 2024, representing a 44.6% year-over-year increase, according to a company press release issued Thursday. Despite this impressive growth, InvestingPro data shows the company is currently trading at an extremely high P/E ratio of over 3,000, suggesting investors are paying a premium for future growth expectations.

The information technology and advertising company's Local Life - Retail Sales segment grew 122.7% year-over-year to RMB 273 million (USD 37 million), accounting for 33.2% of total revenue. However, InvestingPro analysis reveals the company suffers from weak gross profit margins of just 4.19%, indicating potential challenges in converting its growing revenue into substantial profits.

LZ Technology also announced it has launched a globalization strategy, starting with the Middle East. The company has established a strategic cooperation framework with Dubai's MBH group and plans to form a joint venture in the UAE.

Additionally, the company stated it is exploring collaborations with blockchain enterprises in areas such as Real-World-Asset tokenization and digital payments.

LZ Technology operates in three main business segments: Smart Community, which provides access control and safety management systems for residential communities in China; Out-of-Home Advertising, which offers advertising solutions through monitors across approximately 120 Chinese cities; and Local Life, which connects businesses with consumers through online promotions and retail sales.

CEO Theo Zhang described 2025 as "a pivotal moment in the transformation of LZ Technology" as the company has evolved from an advertising company into "an integrated platform that connects communities, digital media, local lifestyle services, e-commerce, and travel."

The company indicated it will continue to expand investment in e-commerce and travel verticals while pursuing its global expansion plans over the next three years.

In other recent news, LZ Technology Holdings Limited announced that its principal shareholders have agreed to extend their lock-up restrictions until August 31, 2026. This decision follows the original 180-day lock-up period established after the company's initial public offering in February 2025. The agreement involves five key shareholders, including LZ Digital Technology Holdings Co., Ltd and BJ Tojoy Shared Enterprise Consulting Ltd, among others. These shareholders collectively hold nearly all of LZ Technology's issued and outstanding Class A ordinary shares and a significant portion of its Class B ordinary shares. This development is significant for investors as it indicates a long-term commitment from major stakeholders. The extension of the lock-up period suggests a focus on stability and confidence in the company's future prospects. Investors may view this as a positive sign, reflecting the shareholders' belief in the company's potential growth and success.

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