Isabella, good reporting! I am really fascinated to see how this will play out. From what I have seen of ZKTeco USA, it is not very well run but $190 million is a lot of money to overcome issues and if they can really establish a US manufacturing facility, would be an interesting competitive dynamic.
decided to open a manufacturing plant in Georgia, a highly contested state in the US election.
I don't see it relating to US elections. ZKTeco has an office there already so logistically it would have benefits to have the factory in the same area. Beyond that, the pros and cons of building a factory in Georgia vs other US states I do not know.
I deal with them a lot, the only real issue sometimes is communication, their left hand does not know what their right hand is doing.
Hardware has proven to be very reliable, total board failures in 4+ years, less than 0.1% & their facial recognition tech is far superior to anything else in the price range. It should be, they have been doing facial recognition for many years.
On March 19, 2021, ZKTeco and its sponsors decided to temporarily suspend the listing process. The reason given to the Shenzhen Stock Exchange was so that the "issuer and sponsor are able to update their financial information." Suspending a listing is a rather typical situation so that companies can add in more recent financial information to their listing process. It is unclear when ZKTeco will continue the process. IPVM will monitor ZKTeco's IPO progress and update accordingly.
(Note: Google automatically translates ZKTeco's Chinese name 熵基科技 to 'Entropy Technology')
ZKTeco's IPO has been suspended again after being back under review since May 12, 2021.
The official reasoning given by the stock exchange is that the company must submit more updated financial information. Currently, the most recent public financials go to the end of 2020:
On September 30, 2021, ZKTeco Technology Co., Ltd. needed to submit supplementary submissions because the financial information recorded in the IPO application documents has expired. According to the relevant provisions of the "Shenzhen Stock Exchange's ChiNext Stock Issuance and Listing Review Rules", the Exchange Suspend its issuance and listing review.
ZKTeco's IPO is under review again after being suspended on 9/30/2021. ZKTeco has provided more updated financials, including H1 2021 numbers, in its updated prospectus.
Compared to H1 2020, revenue is up ~15% to ~$141 million USD for H1 2021. However, profits are down ~36% from ~$18 million in H1 2020 to ~$12.5 million USD in H1 2021.
ZKTeco indicated fever camera sales is contributing less to revenue and profit:
From January to June 2021, the contribution of the Company's anti-epidemic temperature measurement products to revenue and gross profit has declined more.
Indeed, gross margins fell ~4 percentage points:
For each period of the reporting period, the Company's consolidated gross profit margin was 39.24% , 45.44% , 45.55%  and 41.69% [H1 2021] respectively.
ZKTeco also pointed to changes in the RMB exchange rate, rising raw material prices, and increased R&D and sales expenses as reasons for the decrease in profit:
Although the company's operating income in the first half of 2021 has increased compared with the same period in 2020, the company is attributable to the parent after deducting non-recurring gains and losses due to factors such as changes in the RMB exchange rate, rising raw material prices, and increased R&D and sales expenses.
ZKTeco also shared US-specific financials in this prospectus. US revenue in recent years were:
2017: ~11 million USD
2018: ~13.5 million USD
2019: ~ 18 million USD
2020: ~29 million USD
H1 2021: ~12.8 million USD
As a proportion of the company's overseas income, sales in the US accounted for:
H1 2021: 17.65%
Gross profit margins are consistently quite high in the US:
ZKTeco officially submitted their paperwork at the end of January 2022 to be registered. It needs to be approved, and then presumably will list. However, ZKTeco has not announced a projection of when the IPO will actually happen.
ZKTeco's IPO is now paused again, as of 3/31/2022.
The reason given is that the financial information submitted in ZKTeco's prospectus "has expired" and updated financials are necessary. ZKTeco most recently updated its prospectus in January 2022 and included financials from the period between January and September 2021.