Fair-Value Report — ZG Group (6676.HK)

The one genuine operating business in this batch — and the most analyzable. ZG Group runs China's largest asset-light B2B steel-trading platform (commissions + logistics + SaaS), with revenue up 37% to RMB 2.1bn. But it is loss-making with collapsing gross margins as low-margin overseas trading scales, and the stock is down ~90% from its de-SPAC reference. A real buyer (JLT) crossed 5% on-market — but via an opaque trust/nominee. Fair value sits around book; the price already reflects most of a turnaround that hasn't happened.

1 · The insider signal

2 · Snapshot (price as of 2026-05-22)

3 · Business

ZG Group (ZhaoGang / 找鋼網) is China's largest third-party B2B steel e-commerce platform — it does not own steel, earning per-ton commissions plus logistics, warehousing, processing, settlement and SaaS fees. Listed March 2025 via de-SPAC (the mainland's first). FY2025 revenue +37% to RMB 2.1bn, but the growth engine is low-margin overseas gross-basis trading (now 48% of revenue, +1,634% volume), which crushed group gross margin from ~27.5% to ~17.9% and pushed adjusted EBITDA negative (−RMB 175M). A real franchise, but not yet a profitable one.

4 · Valuation

Method. No earnings (loss-making) → no P/E. Anchor on price-to-book and franchise optionality. Equity RMB 595M (≈HK$0.60/share); ~0.5x revenue; net debt ~RMB 371M with most cash restricted/pledged against bills.

Reverse read: at 1.7x book / ~0.5x sales the market already credits the #1-platform franchise with a turnaround. With adjusted EBITDA negative and margins falling, the burden of proof is on management — the de-risking event would be a real margin/EBITDA inflection, which hasn't arrived.

5 · Conclusion

Rating: Hold — Speculative (turnaround). A genuine, leading platform at a 90%-discounted post-SPAC price is interesting, and JLT's on-market 5.9% is a real (if opaque) vote — but the company is loss-making with deteriorating margins and mostly-restricted cash, and at HK$1.04 it trades at the upper end of a book-anchored fair-value range (~HKD 0.92 central, −12%). Watch for an adjusted-EBITDA inflection or a transparent strategic investor; absent that, it's a hold/speculative turnaround, not a margin-of-safety buy.

6 · Key risks

• Profitability — adjusted EBITDA turned negative; gross margin falling as low-margin overseas trading dominates.
• Cash quality — most cash is restricted/pledged against bills payable; ~RMB 371M net debt; RMB 86.8M expected credit losses on receivables.
• Opaque buyer — JLT is a trustee/nominee; ultimate holder and intent unknown.
• WVR governance — founders control ~68% of votes on ~18% economics.
• Post-SPAC overhang — down ~90% from HK$10 reference; lock-up/earn-out share issuance ongoing.