I also own a PPK/S .22 LR. The frame and slide are made form Zamak, which is a high grade zinc alloy that has a good record in the gun industry. The Ithaca Model 49 and Model were made with it, as is it's decedent the Henry .22 LR, and no one seems to be bitching about the "pot metal" receiver they use. The high degree of purity in the Zamak alloys avoid the cracking and dimensional instability issues that are common with regular low grade "pot metal" zinc alloys.
I've found mine to be accurate, reliable and not finicky on ammo at all, eating everything from sub sonic match ammo to standard velocity ammo, high velocity ammo and bulk box ammo. It's the only semi-auto I now that will reliably feed Remington Golden Bullets.
It's not made by Walther, but then neither were the Ranger made Walther PPKs and PPK/Ss or the current smith and wesson PPK and PPK/S pistols. However, it does share the Walther PP series design elements and if you take them apart and compare them you'll see the obvious design with minor differences in execution to match the lower price point needed to keep it competitive with the host of other .22 LR pistols out there.
And all in all it's not a bad looking pistol for the money:
None the less, it's a gun people love to hate, especially those who've never actually owned one.
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There are however better options in the same price range if you're willing to look and buy used. FEG makes the AP and APK series walther clones in .32 ACP, .380 ACP and 9mm Makarov. They also make a versions with a lightened slide (milling away much of the steel) in .22 LR. They go for $300-$350 or so in very good to excellent condition and magazines, while not common, can be found. Depending on who imported them they are excellent (Interarms) to very good (K.B.I) guns.