Xiaodan Zhang

Xiaodan Zhang with CICC asked about the competitive landscape of the MRO market in China, particularly in light of JD Industrial's impending IPO, and management's views on its impact.

Answer

Eric Chen, Founder, Chairman, and CEO, stated that JD Industrial's IPO is positive for the industry, promoting online, one-stop MRO procurement. He emphasized ZKH's specialization in industrial-grade MROs, deep involvement in product R&D through their innovation center, and robust supply chain capabilities, including self-built warehouses and last-mile delivery. He noted that the competitive landscape is stabilizing, with leading players like ZKH gaining increasing advantages, especially in acquiring SMEs.

Xiaodan Zhang from CICC inquired about ZKH's product strategy for the current year, including key product categories for development and plans for its private label brands.

Answer

Founder, Chairman, and CEO Long Chen explained that ZKH will focus on its 32 existing product lines, particularly industrial-grade MRO items like spare parts, chemicals, and manufacturing components. He highlighted a significant push for private labels, involving direct R&D and design to enhance competitiveness in China and support overseas expansion. For 2025, the company will specifically concentrate on strengthening its chemicals and processing/manufacturing categories.

Xiaodan Zhang of CICC requested more details regarding the company's recently announced strategic cooperation with Taobao and Tmall's MRO division.

Answer

Executive Long Chen described the partnership as highly complementary. He noted that Taobao Tmall has a massive base of SME customers who prefer e-commerce, while ZKH possesses the essential warehousing and delivery capabilities that a platform model lacks. The collaboration enables suppliers to cost-effectively reach long-tail SME customers, helps combat counterfeit products, and creates a significant win-win growth opportunity for both ZKH and Taobao Tmall.

Xiaodan Zhang from CICC requested an update on ZKH's product strategy for the year, including key development categories and plans for its private label brands.

Answer

Founder, Chairman, and CEO Long Chen stated that the company will focus on its 32 existing product lines while expanding SKUs, with a particular emphasis on industrial-grade MRO products like spare parts and chemicals. He highlighted a significant focus on strengthening private label brands, where ZKH is involved in R&D and design to enhance competitiveness and support overseas expansion. Mr. Chen also noted that chemicals, a traditional strength, will see further development.

Xiaodan Zhang from CICC asked for an update on ZKH's product strategy for the year, specifically regarding key product categories and the development of its private label brands.

Answer

Long Chen, Founder, Chairman, and CEO, stated that the company will focus on its 32 existing product lines, with an emphasis on industrial-grade MRO products like spare parts, chemicals, and manufacturing components. He highlighted a strategic push to strengthen private labels, including direct involvement in R&D, to enhance competitiveness in China and support overseas expansion. Mr. Chen also noted a particular focus on developing the chemicals and processing/manufacturing categories in 2025.

Xiaodan Zhang from CICC inquired about the primary drivers behind Kingsoft Cloud's AI revenue growth in Q3 2025, structural shifts in demand from ecosystem versus external clients, the anticipated margin trend for upcoming quarters, and the expected mix of computing resource acquisition models.

Answer

CEO Zou Tao explained that Q3 AI revenue growth was primarily driven by the full-quarter recognition of clusters partially delivered in previous quarters and some delayed Q2 revenue. He noted a transition from large customer training demand to broader inference demand, with inference expected to yield higher margins. CFO Li Yi added that the EBITDA margin is projected to remain above 20% due to the increasing AI business proportion and depreciation-heavy cost structure, clarifying that Q3's significant improvement included a one-time other income that will normalize.

Xiaodan Zhang inquired about the key drivers behind Kingsoft Cloud's impressive Q3 AI revenue growth, asking if there were structural shifts in demand from both ecosystem and external clients. Additionally, she sought management's outlook on future margin trends and the anticipated mix of computing resource acquisition models.

Answer

Zou Tao, Vice Chairman and CEO, attributed Q3 AI revenue growth primarily to the full delivery and billing of previously partially recognized clusters and services from Q2, along with some delayed revenue. He noted a strategic shift from large customer training to broader inference demand, expecting higher margins from inference. Li Yi, CFO, projected adjusted EBITDA margin to remain above 20% due to AI business growth and depreciation-heavy cost structure, clarifying that a one-time other income boosted Q3. Zou Tao added that the company uses a Capex model for reliable, large clients like Xiaomi, while favoring leasing for smaller or riskier clients to mitigate risk, anticipating overall margin improvement as inference business expands.

Xiaodan Zhang from CICC asked for an update on the full-year capital expenditure plan and the expected AI computing power capacity by year-end. She also requested more details on the demand drivers and delivery pace for the industry cloud segment, which saw re-accelerated growth.

Answer

CFO Yi Li confirmed the full-year capital expenditure plan remains around RMB 10 billion, with approximately RMB 5 billion spent in the first half. CEO Zhou Tao added that the enterprise cloud growth was driven by increased AI interest from traditional industries like public services and healthcare. He noted the company is focusing on select verticals to achieve breakthroughs before scaling. He expects enterprise cloud revenue growth to be significantly higher in H2 2025 than in H1, following typical seasonality.

Xiaodan Zhang from CICC asked for an update on the company's capital expenditure plan for the year and the expected AI computing power capacity by year-end. She also questioned the drivers behind the re-accelerated revenue growth in the industry cloud segment and the outlook for demand and delivery pace.

Answer

CFO Yi Li reiterated the full-year capital expenditure plan of approximately RMB 10 billion, with about half spent in the first half. She noted the company's strong cash position allows flexibility in using its three procurement models based on customer demand. CEO Zhou Tao attributed the enterprise cloud growth to increased demand from traditional industries following the 'advent of deep seq'. He stated the company is focusing on key verticals like public services, healthcare, and finance to achieve breakthroughs before scaling. Due to seasonality, he expects enterprise cloud revenue growth in the second half of the year to be significantly higher than the first half.

Xiaodan Zhang from CICC asked for an update on the full-year capital expenditure plan and the expected AI computing power capacity by year-end. She also inquired about the drivers behind the re-accelerated growth in the industry cloud segment and its demand and delivery outlook.

Answer

CFO Yi Li reiterated the full-year capital expenditure plan of approximately RMB 10 billion, with about half spent in H1. She noted the company's strong cash position allows for flexible procurement models based on customer demand. CEO Zhou Tao, via a translator, attributed the industry cloud growth to strong demand from traditional sectors like public services and healthcare. He explained the strategy is to focus on key verticals for initial breakthroughs before scaling. He expects H2 growth to be significantly higher than H1 due to typical delivery seasonality.

Xiaodan Zhang from China International Capital Corporation (CICC) asked for an update on the 2025 capital expenditure plan, the expected AI computing power capacity by year-end, and the drivers behind the re-accelerated growth in industry cloud revenue.

Answer

CFO Yi Li reiterated the full-year capital expenditure plan of approximately RMB 10 billion, with about RMB 5 billion spent in the first half, noting the procurement model will be adjusted based on customer demand. CEO Zhou Tao attributed the enterprise cloud growth to strong demand from traditional industries like public services, healthcare, and finance, spurred by AI advancements. He stated the company is focusing on select verticals for initial breakthroughs and expects significantly higher enterprise cloud revenue growth in H2 2025 due to typical seasonality.

Xiaodan Zhang from CICC asked for an update on the company's capital expenditure plan for the year and the expected AI computing power capacity by year-end. She also inquired about the drivers behind the re-accelerated revenue growth in the industry cloud segment and the delivery pace for those clients.

Answer

CFO Yi Li confirmed the full-year capital expenditure plan remains around RMB 10 billion, with about RMB 5 billion spent in the first half. CEO Zhou Tao, via a translator, attributed the enterprise cloud growth to increased AI demand from traditional industries like public services and healthcare, spurred by advancements like 'DeepSeq'. He noted the company is focusing on select verticals to achieve breakthroughs before scaling. He also expects H2 growth to be significantly higher than H1, consistent with historical seasonality.

Xiaodan Zhang from China International Capital Corporation (CICC) asked for an update on the company's capital expenditure plan for the year and the expected AI computing power capacity by year-end. She also requested more details on the demand drivers and delivery pace for the industry cloud segment, which saw reaccelerated growth.

Answer

CFO Yi Li confirmed the full-year CapEx plan remains around RMB 10 billion, with approximately RMB 5 billion spent in the first half. She noted the company's strong cash position allows for flexibility across its three procurement models. CEO Zhou Cao, via a translator, attributed the enterprise cloud growth to strong demand from traditional industries like public services, healthcare, and finance, spurred by advancements like DeepSeek. He stated the company is focusing on select verticals to achieve breakthroughs before scaling more broadly and expects H2 enterprise cloud revenue growth to be significantly higher than H1 due to seasonality.

Xiaodan Zhang from CICC asked about the business opportunities and pricing model for the new AI all-in-one machine for the government sector, and also requested an update on the non-GAAP operating profit margin outlook for subsequent quarters.

Answer

CEO Zhou Tao, via a translator, confirmed the government AI market is developing rapidly and the all-in-one machine is an integrated software-hardware solution with pricing that varies based on hardware configuration. CFO Haijian He addressed the margin question, attributing the Q1 operating loss to seasonally lower revenue against fixed costs like employee bonuses. He expressed confidence that margins will improve in the following quarters, particularly in the second half of the year, driven by top-line growth from AI projects. He also noted that EBITDA margin may recover faster than OP margin.

Xiaodan Zhang inquired about the impact of recent AI trends on the cloud computing industry's supply-demand structure and Kingsoft Cloud's specific opportunities and challenges, as well as the company's capital expenditure plan for 2025.

Answer

CEO Tao Zou, via an interpreter, explained that advancements like DeepSeek accelerate large language model adoption, creating a significant opportunity for Kingsoft Cloud. CFO Haijian He detailed the CapEx strategy, highlighting an asset-light model for data centers and significant server investments. He noted that the planned RMB 10 billion total AI investment for 2025 is a starting point, supported by off-balance-sheet arrangements with shareholders like Xiaomi and Kingsoft.

Xiaodan Zhang of CICC inquired about the growth potential and service strategy for key customers Xiaomi and Kingsoft Group, and also asked for the outlook on adjusted EBITDA and operating margins given rising AI-related capital expenditures.

Answer

CEO Mr. Zou Tao explained that strong performance in the Xiaomi and Kingsoft ecosystem, particularly from Xiaomi's EV business and WPS AI, provides a solid foundation for Kingsoft Cloud's revenue growth. CFO Mr. Henry He added that margin expansion is accelerating, with AI business contributing higher margins than peers. He anticipates significant improvement in operating profit in the near term, following the positive trend from gross margin to EBITDA.

Xiaodan Zhang from CICC inquired about the future plans for the Beihaojia business, specifically its intended business model and whether there would be an upper limit on the investment budget for its projects.

Answer

Executive Director and CFO Tao Xu reiterated a clear strategic direction: Beihaojia will not become a developer and is committed to an asset-light, C2M (Customer-to-Manufacturer) model. He confirmed that beyond the two existing projects, the company will not independently operate others. Crucially, he stated that a strict limit will be placed on investment, with no more than an additional RMB 1 billion in self-owned funds to be invested in the business.

Xiaodan Zhang from China International Capital Corporation asked for details on Beike's 2025 expansion plan for housing agents and agency stores, and the strategies to continuously improve their efficiency.

Answer

CFO Tao Xu explained that the company will continue to grow its agency network with a greater emphasis on cost-effectiveness and efficiency. He highlighted that in Q1, active stores and agents grew by nearly 30% and 23% YoY respectively, outperforming the market. The strategy involves refining internal management with digital tools, using incentive programs to develop more high-performing stores, and leveraging AI to drive transformative productivity gains over the next 2-3 years.

Xiaodan Zhang inquired about the primary drivers behind the solid growth of the Home Renovation business, which surpassed RMB 10 billion in revenue, and asked for the strategic plan for this segment in 2025.

Answer

Tao Xu, Executive Director and CFO, reported 36.1% YoY revenue growth, driven by strong synergies with the core housing transaction business and enhanced delivery capabilities, which reduced average construction time by over 10 days. For 2025, the strategy is to improve product strength and delivery quality. Key initiatives include upgrading showrooms, professionalizing project managers, and creating a clear end-to-end management loop to enhance operational efficiency and customer experience.

Xiaodan Zhang inquired about KE Holdings' perspective on recent real estate policies and the market outlook, and also asked about the company's strategy for online traffic acquisition, particularly concerning new media platforms and potential investments in video-based content.

Answer

CFO Tao Xu expressed cautious optimism for the existing home market, citing stable volumes and supportive policies, while noting the new home market remains sluggish but should improve. Xu detailed that a key online strategy is shifting to a service-provider-centric model, leveraging new media like short videos. He highlighted the 'Galaxy' initiative, which has cultivated over 12,000 influencers, driving over 2,000 transactions in Q1, a 103% year-over-year increase.

Xiaodan Zhang from CICC asked for management's outlook on the auto market for the remainder of 2025 and requested an update on the company's shareholder return plans.

Answer

Management responded that the auto market is seeing price stabilization due to government intervention, intensifying differentiation among automakers, and strong export performance. Autohome's strategy focuses on leveraging AI, expanding its O2O ecosystem, and capitalizing on the 'going global' trend of Chinese brands. Regarding shareholder returns, management confirmed the plan for a full-year 2025 cash dividend payout of no less than 1.5 billion RMB remains unchanged.

Xiaodan Zhang requested an update on the strategy and expansion pace for the new retail model and also asked about the company's latest shareholder return plans, including dividends and buybacks.

Answer

CFO Yan Zeng detailed the evolution of the new retail strategy to version 3.0, which enhances the car-buying experience with technology like VR and an AI smart purchase assistant. She reiterated the expansion goal of over 500 total stores by year-end 2025 and 1,000 satellite stores in the next three years. On shareholder returns, she confirmed the dividend payout will be no less than RMB 1.5 billion and that the company has executed approximately $128 million of its $200 million share repurchase program, delivering an annual return rate exceeding 10%.

Xiaodan Zhang from CICC asked for the 2025 revenue and margin outlook for Autohome's NEV new retail business and its anticipated expansion pace.

Answer

CEO Song Yang emphasized that the NEV new retail business is a key strategic priority focused on an online-to-offline (O2O) model. He highlighted its rapid expansion from one store in 2022 to over 150 franchised space and satellite stores, with a continued focus on penetrating lower-tier cities. Mr. Yang stated that the business is not a 'cash burning' venture and that the company expects its franchisees to achieve financial balance in the short term, projecting continued business growth in 2025.

Xiaodan Zhang of CICC inquired about the progress of Autohome's NEV new retail model, specifically the 'satellite plan,' its expansion pace for the upcoming year, and the business synergies being developed between Autohome and Ping An Group.

Answer

CEO Tao Wu reported that the combined Autohome Space and Satellite stores now exceed 50, utilizing a '1+N' model to penetrate lower-tier cities and support OEMs. He noted the model is cost-effective for OEMs and generates new revenue for Autohome, with plans to grow the store count and enhance business models with services like in-store financing. Regarding Ping An synergy, Mr. Wu detailed collaborations across traditional business (offline auto shows), new retail (in-store financial services), data products (outbound call platforms), and the used car business (vehicle sourcing for TTP), aiming to leverage Ping An's online and offline strengths.