{"text":[[{"start":4.75,"text":"Its English name tells you almost immediately that ZJK Industrial Co. Ltd. (ZJK.US) is not a very sophisticated company, at least when it comes to communications. The name comes from the first letters of the three characters in the company’s Chinese name, Zhongjinke, and it tells you nothing about the company and isn’t particularly easy to remember."}],[{"start":28.45,"text":"But behind that lack of public relations savvy, this company appears to be on the cusp of a major expansion as its screws and fasteners gain growing acceptance among major electronic components makers. ZJK made headlines back in December 2024 shortly after its Nasdaq IPO when it said it had been invited to create fasteners for potential use in new high-tech cooling systems being developed by AI chip superstar Nvidia."}],[{"start":55.75,"text":"ZJK’s stock briefly rose above $17 after that announcement, more than triple its IPO price of $5. But the company, probably not realizing how much such an announcement might affect its stock, quickly downplayed the development, causing its shares to fall back to previous levels."}],[{"start":72.6,"text":"Since then, ZJK has issued a steady stream of announcements, many hinting that the Nvidia deal might be making progress. At the same time, it reported sharply accelerating revenue growth as its order book expanded and it ramped up production at a Vietnam facility launched in late 2023. To move beyond its home China market, which still accounts for the big majority of its sales, the company also announced plans for a new $200 million U.S. facility, complementing its original Chinese factories."}],[{"start":104.19999999999999,"text":"ZJK’s latest announcement, issued last week, was a bit cryptic, detailing its plans to advance a “localized operational model” for its Vietnam factory. It didn’t explain what such an operational model is, but said the move would allow it “to remain close to key international customers and respond effectively to order demand.”"}],[{"start":123.74999999999999,"text":"That step, taken together with several other recent separate measures, all appear to show the company is trying to distance itself from its China roots – a concern that big Western customers might be expressing before fully embracing ZJK’s products into their supply chains."}],[{"start":138.79999999999998,"text":"A few other recent steps suggest ZJK could be getting ready to raise some major new capital to boost its global presence, both in terms of sales and production. The company in February announced plans to sell up to $300 million in new shares, which looks slightly strange when you consider that amount is roughly double its latest market cap of $158 million."}],[{"start":162.49999999999997,"text":"We should point out that ZJK’s market cap was briefly much larger after the late 2024 announcement of the potential Nvidia partnership, at one point crossing the $1 billion mark. The latest fundraising announcement looks tied to ZJK’s announcement three months earlier of its plan to build a $200 million major manufacturing facility in the U.S. Funds from the new share sales could also be used to support the Vietnam facility, which appears to be rapidly expanding as it ramps up production."}],[{"start":193.64999999999998,"text":"Nvidia partnership moving ahead?"}],[{"start":196.04999999999998,"text":"The biggest question likely on investors’ minds right now is whether the potential Nvidia partnership is advancing and whether it could translate to big new revenues for ZJK. The high-tech cooling systems that would incorporate ZJK’s screws and fasteners are a critical component for AI chips of the future, since such chips give off huge amounts of heat from the massive computing power they facilitate."}],[{"start":220.45,"text":"As to whether ZJK is still in the running to supply its products for Nvidia’s cooling systems, the answer is most likely “yes.” But in this case, the company appears to have learned its lesson and is refraining from providing updates until there’s specific news to tell. Sort of."}],[{"start":235.1,"text":"In fact, ZJK’s steady stream of announcements included one last June where the company said it had ramped up production to support Nvidia’s B40 project to make special AI chips just for the China market that would comply with U.S. restrictions. That announcement said production of the special B40 chips could start as early as June 2025. But shortly after issuing that announcement, ZJK issued another one telling readers to disregard the original announcement, without providing any additional explanation."}],[{"start":267.9,"text":"In one other significant development, the company earlier this year announced its rollout of a dual class structure to replace its previous structure where all of its shares were Class-A ordinary shares. Dual-class structures typically give special Class-B shares with super voting rights to company founders, allowing them to maintain control when their stakes get diluted. In this case, the new dual class structure looks designed to let ZJK founder Ding Ning retain his control of the company after the massive upcoming share issues to fund the new U.S. factory and expand the facility in Vietnam."}],[{"start":302.09999999999997,"text":"All this comes as ZJK has reported accelerating revenue growth, reflecting growing acceptance of its products from an A-list of customers that not only includes Nvidia, but also big names like leading electric vehicle makers Tesla and BYD, as well as leading drone maker DJI."}],[{"start":321.45,"text":"The company’s revenue rose 52% year-on-year to $24.7 million in the first half of last year, accelerating from 30% growth in 2024 and 17% in 2023. Its gross margin has also been improving steadily, rising to 49.9% in the first half of last year from 46.6% a year earlier, and up more than 10 percentage points from 37.9% in 2023. The company’s profit only grew 7.6% to $5.84 million in the first half of last year, as its administrative and sales expenses ballooned on its aggressive global expansion."}],[{"start":360.25,"text":"Investors haven’t been very impressed throughout all these changes, with the stock sinking to an all-time low of $1.52 last month after the company announced its new dual class structure. Since then they’ve rebounded somewhat, closing last Friday at $2.46 – up more than 60% from their all-time low – but still just half of their IPO price."}],[{"start":382.55,"text":"All the signs look positive for another, more definitive announcement to come out later this year for ZJK’s entry into Nvidia’s AI chip cooling system supply chain. The company could announce a massive new share sale around the same time to fund the new U.S. factory, which is perhaps what’s keeping the stock price depressed. But things look quite positive for ZJK as a whole, meaning the stock could see some strong upside potential in the months ahead."}],[{"start":414.5,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1777273710_7681.mp3"}