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WENZHOU, China - ZK International Group Co., Ltd. (NASDAQ:ZKIN), a manufacturer of high-performance steel pipe products, has reported a significant increase in gross profits for the fiscal year ended September 30, 2024. The company, currently valued at $25.48 million in market capitalization, announced a 405% rise in gross profit and a substantial decrease in net loss by 95.44% compared to the previous fiscal year.
Despite a slight 3.05% decline in revenue from $111.6 million in 2023 to $108.2 million in 2024, ZK International's gross profit margin improved from 1.16% to 6.05%. The increase in gross profit is attributed to higher average selling prices (ASP), which offset the impact of rising raw material costs, especially nickel, used in stainless steel production. According to InvestingPro analysis, the stock is currently trading at a low revenue valuation multiple, with a price-to-book ratio of 0.9x. The platform's Fair Value analysis suggests the stock may be undervalued at current levels.
The company's operational loss decreased by 97.16% to $1.72 million, down from $60.44 million the previous year. This improvement is partly due to reduced one-off asset impairment costs incurred in the fiscal year 2023. ZK International also wrote off investments in CG Malta and software platforms like xSigma Trading, MaximNFT, and the Defi Exchange due to their inability to raise capital and continued losses.
Net loss attributable to ZK International narrowed to $2.78 million, or a loss of $0.08 per share, a significant improvement from a net loss of $61.06 million, or $1.94 per share, in the prior year. The net book value per share increased marginally from $0.80 to $0.82 over the same period.
Looking ahead, ZK International anticipates a gross profit margin in the range of 10% to 12% for the fiscal year 2025, as it continues to leverage market recovery and expand its market share. Recent momentum has been positive, with InvestingPro data showing a 14% return over the past week. Investors should note the stock's high volatility, reflected in its beta of 1.96. For deeper insights and additional ProTips about ZKIN's financial health and market position, subscribers can access the full analysis on InvestingPro.
The company, known for its patented stainless steel and carbon steel pipe products, serves various industries, including gas and water sectors. With a portfolio of 33 patents and numerous awards, ZK International has contributed to significant projects such as the Beijing National Airport and the 2008 Beijing Olympics venues.
This report is based on a press release statement and includes forward-looking statements subject to risks, uncertainties, and other factors that may cause actual results to differ materially from those projected.
In other recent news, ZK International Group Co., Ltd. has made significant strides in its operations. The engineering firm recently announced its plan to integrate cryptocurrency payments into its operations, aiming to enhance transaction efficiency and strengthen relationships with stakeholders. This move is expected to facilitate faster international payments, offer flexible payment options, and reduce currency conversion costs.
ZK International also secured a $4.47 million contract for the Shenzhen Municipal Infrastructural Gas Pipeline Procurement Project, positioning it as a key player in China's gas infrastructure sector. In terms of financials, the company reported a 9% revenue increase, reaching $111.6 million, and a net income of $2 million from operations in China.
However, the company experienced a net loss of $61.06 million for the fiscal year ending in September 2023, primarily due to a strategic reduction in selling prices and substantial one-off asset impairment costs. In compliance-related news, ZK International regained compliance with Nasdaq's periodic filing requirements and has been granted an extension to meet the minimum bid price condition. These are the recent developments in the ongoing operations of ZK International.
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