ZK International Group Co., Ltd. (NASDAQ: ZKIN)

Sector: Basic Materials Industry: Steel CIK: 0001687451
Market Cap 7.97 Mn
P/B 0.33
P/E -2.00
P/S 0.11
ROIC (Qtr) 0.00
Div Yield % 0.00
Rev 1y % (Qtr) 0.00
Total Debt (Qtr) 27.53 Mn
Debt/Equity (Qtr) 1.12
Add ratio to table...

About

ZK International Group Co., Ltd., with its ticker symbol ZKIN, is a company that operates in the construction industry, specifically providing systematic solutions for projects that require sophisticated piping systems. The company's main business activities are conducted through its subsidiary, Zhejiang Zhengkang Industrial Co., Ltd., which is a leading manufacturer and engineer of high-performance stainless steel pipes. ZK International Group Co., Ltd. primarily generates revenue through the sales of its products, which include double-press thin-walled...

Read more

Investment thesis

Bull case

  • Robust tangible asset base of 61.70M provides 4.45x coverage of working capital 13.87M, indicating strong operational backing.
  • Tangible assets of 61.70M provide robust 7.50x coverage of other current liabilities 8.23M, indicating strong asset backing.
  • Strong R&D investment of 859697 at 1.46x of capex 588551 shows balanced investment in innovation and infrastructure.
  • Strong tangible asset base of 61.70M provides 52.63x coverage of intangibles 1.17M, indicating robust asset quality.
  • Cash position of 3.82M fully covers payables of 2.50M by 1.53x, showing strong vendor relationship management.

Bear case

  • Operating cash flow of 736397 barely covers its investment activities of (651989), with a coverage ratio of -1.13, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 3.82M against inventory of 13.08M, the 0.29 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Investment activities of (651989) provide weak support for R&D spending of 859697, which is -0.76x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • High receivables of 30.23M relative to inventory of 13.08M (2.31 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • The company's operating cash flow of 736397 shows concerning coverage of stock compensation expenses of 1.14M, with a 0.65 ratio indicating potential earnings quality issues.

Peer comparison

Companies in the Steel
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 NUE Nucor Corp 58.33 Bn 74.96 2.91 6.85 Bn
2 STLD Steel Dynamics Inc 40.60 Bn 83.81 4.34 3.78 Bn
3 RS Reliance, Inc. 26.37 Bn 77.34 2.59 1.69 Bn
4 PKX Posco Holdings Inc. 19.54 Bn 56.38 0.39 19.69 Bn
5 CMC COMMERCIAL METALS Co 9.18 Bn 198.05 2.39 3.35 Bn
6 CLF Cleveland-Cliffs Inc. 5.34 Bn -3.62 0.29 7.25 Bn
7 WS Worthington Steel, Inc. 2.24 Bn 18.89 0.72 0.28 Bn
8 MTUS Metallus Inc. 0.97 Bn -116.67 0.86 0.02 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.52 1.89
EV to Cash from Ops. EV/CFO 44.49 4.54
EV to Debt EV to Debt 1.19 -3.26
EV to EBIT EV/EBIT -8.96 -15.16
EV to EBITDA EV/EBITDA -9.68 -139.64
EV to Free Cash Flow [EV/FCF] EV/FCF 221.62 46.24
EV to Market Cap EV to Market Cap 4.11 -0.56
EV to Revenue EV/Rev 0.46 2.70
Price to Book Value [P/B] P/B 0.33 8.16
Price to Earnings [P/E] P/E -2.00 22.89
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -41.90
Dividend Payout Ratio % Dividend Payout Ratio % 0.00 41.41
Dividend per Basic Share Div per Share (Qtr) 0.00 0.99
FCF Dividend Payout Ratio % FCF Dividend Payout Ratio % 0.00 24.68
Interest Coverage Interest Coverage -11.07 10.33
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex Growth (1y) % 2.40 -25.11
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -7.15 72.27
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 24.03
EBIAT Growth (1y) % EBIAT Growth (1y) % -136.75 -69.57
EBITDA Growth (1y) % EBITDA Growth (1y) % -289.45 -69.57
EBIT Growth (1y) % EBIT Growth (1y) % -137.84 -69.73
EBT Growth (1y) % EBT Growth (1y) % -43.91 -89.44
EPS Growth (1y) % EPS Growth (1y) % -22.81 -67.10
FCF Growth (1y) % FCF Growth (1y) % 101.98 -11.81
Gross Profit Growth (1y) % Gross Profit Growth (1y) % -38.29 -592.10
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Utilization Ratio 1.13 0.83
Cash Payout Ratio Cash Payout Ratio 0.00 0.30
Cash Ratio Cash Ratio (Qtr) 0.12 11.50
Current Ratio Curr Ratio (Qtr) 1.44 15.74
Debt to Equity Ratio Debt/Equity (Qtr) 1.12 0.62
Interest Cover Ratio Interest Cover Ratio -11.07 10.33
Times Interest Earned Times Interest Earned -11.07 10.33
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % -3.90 -0.83
EBIT Margin % EBIT Margin % -5.13 571.21
EBT Margin % EBT Margin % -5.60 -4.72
Gross Margin % Gross Margin % 5.70 17.71
Net Profit Margin % Net Profit Margin % -5.60 -4.68