ZK International Releases Revenue Guidance; Stock Drops 11%
ZK International Group Co. Ltd. (Nasdaq: ZKIN) saw its stock tumble more than 11 percent by noon Wednesday after posting revenue guidance for the fiscal year 2019.
In a statement today, the Wenzhou-based company said it expects a 25 percent year-over-year revenue increase for the twelve months through September. That's a jump of $13.7 million to approximately $68.6 million.
In response to the announcement, shares in ZK International, which makes steel pipe products, fell 22 cents to $1.76 apiece intraday.
The company said the growth has been driven by the government's intiatives to improve China's water and gas infrastructure by replacing copper pipes with stainless steel piping systems. The new standards are being implemented on the local level, ZK added.
"The continued urbanization of China and the evolving government standards has allowed us to build new customer relationships to support these efforts," ZK International's chairman and chief executive, Jiancong Huang, said. He also stated, "In 2018, we invested our revenue in sales and marketing in anticipation of the growth we expect to achieve in the coming year. We remain committed to producing high quality products and leading the water and gas infrastructure upgrade initiatives in China."
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