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ZTO Reports Second Quarter 2024 Unaudited Financial Results

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ZTO Express reported strong Q2 2024 results with a 10.1% increase in revenues to RMB10.7 billion (US$1.48 billion) and a 10.9% rise in adjusted net income to RMB2.8 billion (US$386.1 million). The company achieved a 10.1% increase in parcel volume to 8.45 billion. Key financial metrics showed positive performance: gross profit rose 9.6% to RMB3.62 billion, adjusted EBITDA increased 11.7% to RMB4.34 billion, and net income grew 3.3% to RMB2.61 billion. Basic and diluted earnings per ADS were RMB3.24 (US$0.45) and RMB3.16 (US$0.43) respectively. Operational highlights include over 31,000 pickup/delivery outlets and 10,000 self-owned line-haul vehicles. The company announced an interim dividend of US$0.35 per ADS/share. ZTO reaffirms its 2024 parcel volume guidance of 15%-18% growth. The company's market share decreased by 2% to 19.6% despite overall industry growth.

ZTO Express ha riportato risultati solidi per il secondo trimestre del 2024, con un aumento dei ricavi del 10,1% a RMB10,7 miliardi (US$1,48 miliardi) e un incremento del reddito netto rettificato del 10,9% a RMB2,8 miliardi (US$386,1 milioni). L'azienda ha registrato un aumento del volume dei pacchi del 10,1% a 8,45 miliardi. Gli indicatori finanziari chiave hanno mostrato performance positive: il profitto lordo è aumentato del 9,6% a RMB3,62 miliardi, l'EBITDA rettificato è cresciuto dell'11,7% a RMB4,34 miliardi e il reddito netto è aumentato del 3,3% a RMB2,61 miliardi. Gli utili di base e diluiti per ADS sono stati di RMB3,24 (US$0,45) e RMB3,16 (US$0,43) rispettivamente. Tra i principali risultati operativi, ci sono oltre 31.000 punti di ritiro/consegna e 10.000 veicoli di trasporto di proprietà. L'azienda ha annunciato un dividendo intermedio di US$0,35 per ADS/azione. ZTO conferma la sua previsione di crescita per il volume dei pacchi del 2024, compresa tra il 15% e il 18%. La quota di mercato dell'azienda è diminuita del 2% al 19,6%, nonostante la crescita generale del settore.

ZTO Express reportó resultados sólidos para el segundo trimestre de 2024, con un incremento del ingreso del 10.1% a RMB10.7 mil millones (US$1.48 mil millones) y un aumento del ingreso neto ajustado del 10.9% a RMB2.8 mil millones (US$386.1 millones). La compañía alcanzó un incremento del volumen de paquetes del 10.1% a 8.45 mil millones. Las métricas financieras clave mostraron un desempeño positivo: el beneficio bruto aumentó un 9.6% a RMB3.62 mil millones, el EBITDA ajustado se incrementó un 11.7% a RMB4.34 mil millones, y el ingreso neto creció un 3.3% a RMB2.61 mil millones. Las ganancias básicas y diluidas por ADS fueron de RMB3.24 (US$0.45) y RMB3.16 (US$0.43) respectivamente. Los puntos destacados operativos incluyen más de 31,000 puntos de recogida/entrega y 10,000 vehículos de transporte propios. La compañía anunció un dividendo interino de US$0.35 por ADS/acción. ZTO reafirma su guía de crecimiento de volumen de paquetes del 2024, que oscila entre el 15% y el 18%. La cuota de mercado de la empresa disminuyó un 2% al 19.6%, a pesar del crecimiento general de la industria.

ZTO 익스프레스는 2024년 2분기 실적을 발표하며 수익이 10.1% 증가한 107억 위안(미화 14억 8천만 달러), 조정 순이익이 10.9% 증가한 28억 위안(미화 3억 8천 610만 달러)에 도달했다고 보고했습니다. 회사는 소포 물량이 10.1% 증가한 84억 5천만 개를 기록했습니다. 주요 재무 지표는 긍정적인 성과를 보였습니다: 총 이익은 9.6% 증가한 36억 2천만 위안, 조정 EBITDA는 11.7% 증가한 43억 4천만 위안, 그리고 순이익은 3.3% 증가한 26억 1천만 위안으로 나타났습니다. 기본 및 희석 ADS당 수익은 각각 3.24위안(미화 0.45달러) 및 3.16위안(미화 0.43달러)이었습니다. 운영 하이라이트로는 31,000개 이상의 픽업/배송 지점과 10,000대의 자가 소유 화물차량이 포함됩니다. 회사는 ADS/주당 미화 0.35의 중간 배당금을 발표했습니다. ZTO는 2024년 소포 물량 증가 가이드를 15%-18%로 재확인합니다. 회사의 시장 점유율은 전체 산업 성장에도 불구하고 2% 감소하여 19.6%에 이릅니다.

ZTO Express a annoncé de solides résultats pour le deuxième trimestre 2024, avec une augmentation de chiffre d'affaires de 10,1 % à 10,7 milliards RMB (1,48 milliard USD) et une hausse de revenu net ajusté de 10,9 % à 2,8 milliards RMB (386,1 millions USD). L'entreprise a enregistré une augmentation de volume de colis de 10,1 % pour atteindre 8,45 milliards. Les indicateurs financiers clés montrent une performance positive : le profit brut a augmenté de 9,6 % pour atteindre 3,62 milliards RMB, l'EBITDA ajusté a augmenté de 11,7 % pour atteindre 4,34 milliards RMB et le revenu net a augmenté de 3,3 % à 2,61 milliards RMB. Le bénéfice de base et dilué par ADS était de 3,24 RMB (0,45 USD) et de 3,16 RMB (0,43 USD) respectivement. Les points forts opérationnels comprennent plus de 31 000 points de collecte/livraison et 10 000 véhicules de transport en propriété. L'entreprise a annoncé un dividende intérimaire de 0,35 USD par ADS/action. ZTO réaffirme ses prévisions de volume de colis pour 2024 avec une croissance de 15 % à 18 %. La part de marché de l'entreprise a diminué de 2 % pour atteindre 19,6 %, malgré la croissance générale du secteur.

ZTO Express berichtete über starke Ergebnisse im zweiten Quartal 2024 mit einem Umsatzwachstum von 10,1% auf 10,7 Milliarden RMB (1,48 Milliarden US-Dollar) und einem Anstieg des bereinigten Nettoergebnisses um 10,9% auf 2,8 Milliarden RMB (386,1 Millionen US-Dollar). Das Unternehmen erreichte ein Paketsendungsvolumen von 8,45 Milliarden, was einem Wachstum von 10,1% entspricht. Die wichtigsten finanziellen Kennzahlen zeigen eine positive Entwicklung: Der Bruttogewinn stieg um 9,6% auf 3,62 Milliarden RMB, das bereinigte EBITDA erhöhte sich um 11,7% auf 4,34 Milliarden RMB, und der Nettoertrag wuchs um 3,3% auf 2,61 Milliarden RMB. Der Basis- und verwässerte Gewinn pro ADS betrugen jeweils 3,24 RMB (0,45 US-Dollar) und 3,16 RMB (0,43 US-Dollar). Zu den betrieblichen Höhepunkten zählen über 31.000 Abhol-/Lieferstellen und 10.000 eigene Fernverkehrsfahrzeuge. Das Unternehmen kündigte eine Zwischendividende von 0,35 US-Dollar pro ADS/Aktie an. ZTO bekräftigt die Prognose für das Jahr 2024 mit einer Wachstumsrate des Paketvolumens von 15%-18%. Der Marktanteil des Unternehmens sank um 2% auf 19,6%, trotz des insgesamt wachsenden Marktes.

Positive
  • Revenues increased 10.1% to RMB10.7 billion.
  • Adjusted net income rose 10.9% to RMB2.8 billion.
  • Parcel volume grew 10.1% to 8.45 billion.
  • Gross profit up 9.6% to RMB3.62 billion.
  • Adjusted EBITDA increased 11.7% to RMB4.34 billion.
  • Net income grew 3.3% to RMB2.61 billion.
  • Announced interim dividend of US$0.35 per ADS/share.
Negative
  • Market share decreased by 2% to 19.6%.
  • Net cash from operating activities dropped to RMB3.48 billion from RMB3.76 billion.

Insights

ZTO Express delivered a solid Q2 2024 performance with 10.1% revenue growth to RMB10.73 billion and 10.9% adjusted net income growth to RMB2.81 billion. Key highlights:

  • Parcel volume grew 10.1% YoY to 8.45 billion
  • Market share declined 2 points to 19.6% as company prioritized quality over quantity
  • Core express ASP remained stable at RMB1.24 per parcel
  • Adjusted EBITDA increased 11.7% to RMB4.34 billion
  • US$0.35 per ADS interim dividend declared

The results reflect ZTO's balanced approach of maintaining profitability while growing volume. The focus on higher-value customers and last-mile initiatives should support long-term competitiveness, though market share may face near-term pressure. Maintaining the 15-18% full-year volume growth guidance is encouraging given the competitive landscape.

ZTO's strategic shift towards quality over quantity is a prudent move in China's competitive express delivery market. The 2 percentage point market share decline is a calculated trade-off for improved profitability and service quality. Key observations:

  • Focus on retail volume growth aims to differentiate ZTO from competitors
  • Last-mile initiatives to increase retail parcel pickup should boost courier earnings and network stability
  • Improved operational efficiencies evident in 2 cent decrease in combined unit sorting and transportation costs
  • Automation continues with 515 automated sorting equipment sets now in service

While short-term growth may be impacted, this strategy positions ZTO better for long-term success in a maturing market. The emphasis on network fairness and stability is important for maintaining ZTO's competitive edge against rivals.

ZTO's Q2 results present a mixed picture for investors. Positives include:

  • 10.9% growth in adjusted net income despite slower volume growth
  • Stable core express ASP in a competitive market
  • Continued operational efficiency improvements
  • Attractive US$0.35 per ADS interim dividend (40% payout ratio)

However, investors should note:

  • Market share decline could pressure growth if trend continues
  • Increased competition and industry pressure highlighted by management
  • Higher income tax rate due to withholding tax on planned dividends

The 1.8% increase in overall tax rate warrants attention. While ZTO's strategy aims for long-term differentiation, investors should monitor market share trends and competitive dynamics closely in coming quarters. The dividend provides attractive yield, but sustainability will depend on maintaining profit growth amid market challenges.

Robust Profitable Growth amidst Consumption Mix-shift
Adjusted Net Income Grew 10.9% to RMB2.8 Billion 
US$0.35 per Share Interim Dividend Announced

SHANGHAI, Aug. 20, 2024 /PRNewswire/ -- ZTO Express (Cayman) Inc. (NYSE: ZTO and SEHK: 2057), a leading and fast-growing express delivery company in China ("ZTO" or the "Company"), today announced its unaudited financial results for the second quarter ended June 30, 2024[1]. The Company grew parcel volume by 10.1% year over year while maintaining high quality of service and customer satisfaction. Adjusted net income increased 10.9%[2] to reach RMB2.8 billion. Cash generated from operating activities was RMB3.5 billion.

Second Quarter 2024 Financial Highlights

  • Revenues were RMB10,726.0 million (US$1,475.9 million), an increase of 10.1% from RMB9,740.3 million in the same period of 2023.
  • Gross profit was RMB3,620.5 million (US$498.2 million), an increase of 9.6% from RMB3,304.4 million in the same period of 2023.
  • Net income was RMB2,614.0 million (US$359.7 million), an increase of 3.3% from RMB2,530.2 million in the same period of 2023.
  • Adjusted EBITDA[3] was RMB4,339.7 million (US$597.2 million), an increase of 11.7% from RMB3,883.9 million in the same period of 2023.
  • Adjusted net income was RMB2,805.7 million (US$386.1 million), an increase of 10.9% from RMB2,531.0 million in the same period of 2023.
  • Basic and diluted net earnings per American depositary share ("ADS"[4]) were RMB3.24 (US$0.45) and RMB3.16 (US$0.43), an increase of 3.2% and 2.9% from RMB3.14 and RMB3.07 in the same period of 2023, respectively.
  • Adjusted basic and diluted earnings per American depositary share attributable to ordinary shareholders[5] were RMB3.48 (US$0.48) and RMB3.38 (US$0.47), an increase of 10.8% and 10.1% from RMB3.14 and RMB3.07 in the same period of 2023, respectively.
  • Net cash provided by operating activities was RMB3,480.1 million (US$478.9 million), compared with RMB3,761.6 million in the same period of 2023.

Operational Highlights for Second Quarter 2024

  • Parcel volume was 8,452 million, an increase of 10.1% from 7,677 million in the same period of 2023.
  • Number of pickup/delivery outlets was over 31,000 as of June 30, 2024.
  • Number of direct network partners was over 6,000 as of June 30, 2024.
  • Number of self-owned line-haul vehicles was approximately 10,000 as of June 30, 2024.
  • Out of the approximately 10,000 self-owned trucks, over 9,200 were high capacity 15 to 17-meter-long models as of June 30, 2024, compared to over 9,300 as of June 30, 2023.
  • Number of line-haul routes between sorting hubs was over 3,800 as of June 30, 2024, compared to approximately 3,800 as of June 30, 2023.
  • Number of sorting hubs was 96 as of June 30, 2024, among which 90 are operated by the Company and 6 by the Company's network partners.

(1)   An investor relations presentation accompanies this earnings release and can be found at http://zto.investorroom.com.

(2)   Adjusted net income is a non-GAAP financial measure, which is defined as net income before share-based compensation expense and non-recurring items such as impairment of investment in equity investees, gain/(loss) on disposal of equity investment and subsidiary and corresponding tax impact which management aims to better represent the underlying business operations.

(3)   Adjusted EBITDA is a non-GAAP financial measure, which is defined as net income before depreciation, amortization, interest expenses and income tax expenses, and further adjusted to exclude the shared-based compensation expense and non-recurring items such as impairment of investment in equity investees, gain/(loss) on disposal of equity investment and subsidiary which management aims to better represent the underlying business operations.

(4)   One ADS represents one Class A ordinary share.

(5)   Adjusted basic and diluted earnings per American depositary share attributable to ordinary shareholders is a non-GAAP financial measure. It is defined as adjusted net income attributable to ordinary shareholders divided by weighted average number of basic and diluted American depositary shares, respectively.

Mr. Meisong Lai, Founder, Chairman and Chief Executive Officer of ZTO, commented, "For the second quarter this year, we continued to advance our re-balanced strategy that prioritizes quality over quantity by enhancing volume mix, improving operational efficiencies, helping to reduce last mile delivery costs, and increase profitability for outlets and couriers. With 8.5 billion parcels, our market share decreased 2.0 points to 19.6%, and our adjusted earnings increased 10.9% to 2.8 billion. We are on track to double the retail volume by the end of the year, aiming to gradually but steadfastly differentiate ourselves from the rest of the "Tongda" in brand recognition and customer satisfaction, and further our leadership in profitable growth."

Mr. Lai added, "China express delivery industry maintained relatively high growth, however, competition remained intense, the industry is under increased pressure.  It is crucial for us to ensure fairness and maintain stability across the network. Our last-mile initiatives to drive up the ratio of retail parcel pickup to delivery will provide opportunities for franchise and couriers to earn more and ultimately provide greater pricing advantage for the front end in the long run."

Ms. Huiping Yan, Chief Financial Officer of ZTO, commented, "Core express ASP was flat at 1.24 while the impact of volume incentives and average parcel weight decline were offset by increases in non-ecommerce parcel mix. Combined unit sorting and transportation cost decreased 2 cents mainly driven by improvements in fleet operations with better resource utilizations. SG&A as a percentage of revenue remained stable at approximately 5.5%. Cash flow from operating activities was 3.5 billion, and capital spending was 1.3 billion."

Ms. Yan added, "Volume is not unimportant because it enables scale-leverage. We are getting better at weighing risks and opportunities in order to achieve appropriate level of profit and maximize value creation. We are reiterating our 2024 volume growth guidance of 15% to 18%. Strengthening long-term competitive advantage, breaking away from homogenized product offering that is conducive for unproductive price competition and building healthier and stronger partner-network and entrepreneurial courier excellence will prepare us for the vast opportunities ahead the logistic industry."

Second Quarter 2024 Unaudited Financial Results



Three Months Ended June 30,


Six Months Ended June 30,


2023


2024


2023


2024


RMB


%


RMB


US$


%


RMB


%


RMB


US$


%


(in thousands, except percentages)

Express delivery services

8,998,444


92.4


9,875,923


1,358,972


92.1


17,387,187


92.9


19,116,095


2,630,462


92.4

Freight forwarding services

238,872


2.5


233,242


32,095


2.2


431,597


2.3


435,989


59,994


2.1

Sale of accessories

467,778


4.8


580,422


79,869


5.4


836,616


4.5


1,065,484


146,615


5.2

Others

35,230


0.3


36,377


5,006


0.3


68,163


0.3


68,402


9,413


0.3

Total revenues

9,740,324


100.0


10,725,964


1,475,942


100.0


18,723,563


100.0


20,685,970


2,846,484


100.0

Total Revenues were RMB10,726.0 million (US$1,475.9 million), an increase of 10.1% from RMB9,740.3 million in the same period of 2023. Revenue from the core express delivery business increased by 10.4% compared to the same period of 2023 as a result of a 10.1% growth of parcel volume and stable parcel unit price. KA revenue including delivery fees from direct sales organizations, established to serve core express KA customers, increased by 73.9% as the proportion of higher-value customers continue to increase. Revenue from freight forwarding services decreased by 2.4% compared to the same period of 2023. Revenue from sales of accessories, largely consisted of sales of thermal paper used for digital waybills' printing, increased by 24.1%. Other revenues were mainly derived from financing services.


Three Months Ended June 30,


Six Months Ended June 30,


2023


2024


2023


2024


RMB


% of


RMB


US$


% of


RMB


% of


RMB


US$


% of


revenues

revenues

revenues

revenues


(in thousands, except percentages)

Line-haul

transportation cost

3,199,832


32.9


3,283,123


451,773


30.6


6,381,652


34.1


6,654,616


915,706


32.2

Sorting hub

  operating cost

1,934,666


19.9


2,227,670


306,538


20.8


3,948,037


21.1


4,395,871


604,892


21.3

Freight

  forwarding cost

222,272


2.3


216,724


29,822


2.0


405,244


2.2


405,106


55,744


2.0

Cost of

  accessories sold

126,700


1.3


160,093


22,030


1.5


234,128


1.3


293,140


40,337


1.4

Other costs

952,429


9.7


1,217,877


167,585


11.3


1,926,669


10.2


2,314,675


318,510


11.1

Total cost of

  revenues




















6,435,899


66.1


7,105,487


977,748


66.2


12,895,730


68.9


14,063,408


1,935,189


68.0
























Total cost of revenues was RMB7,105.5 million (US$977.7 million), an increase of 10.4% from RMB6,435.9 million in the same period last year.

Line haul transportation cost was RMB3,283.1 million (US$451.8 million), an increase of 2.6% from RMB3,199.8 million in the same period last year. The unit transportation cost decreased 6.8% or 3 cents mainly attributable to better economies of scale, optimized line-haul route planning and improved load rate.

Sorting hub operating cost was RMB2,227.7million (US$306.5 million), an increase of 15.1% from RMB1,934.7 million in the same period last year. The increase primarily consisted of (i) RMB154.6 million (US$21.3 million) increase in labor-associated costs, a net result of wage increases partially offset by automation-driven efficiency improvements and (ii) RMB73.9 million (US$10.2 million) increase in depreciation and amortization costs associated with expansion of automation equipment and facility upgrades to further improve the transit efficiency. As a result, sorting hub operating cost per unit increased 4.6% or 1 cent. As of June 30, 2024, there were 515 sets of automated sorting equipment in service, compared to 460 sets as of June 30, 2023.

Cost of accessories sold was RMB160.1 million (US$22.0 million), increased 26.4% compared with RMB126.7 million in the same period last year.

Other costs were RMB1,217.9 million (US$167.6 million), an increase of 27.9% from RMB952.4 million in the same period last year. The increase was mainly driven by RMB338.3 million (US$46.6 million) increase in costs associated with serving higher-value enterprise customers, level of which is consistent with related revenue increases.

Gross Profit was RMB3,620.5 million (US$498.2 million), increased by 9.6% from RMB3,304.4 million in the same period last year. Gross margin rate was 33.8% compared to 33.9% in the same period last year.

Total Operating Expenses were RMB405.3 million (US$55.8 million), compared to RMB425.7 million in the same period last year.

Selling, general and administrative expenses were RMB593.0 million (US$81.6 million), increased by 17.5% from RMB504.6 million in the same period last year, mainly due to the increases of compensation and benefits.

Other operating income, net was RMB187.7 million (US$25.8 million), compared to RMB79.0 million in the same period last year. Other operating income mainly consisted of (i) RMB147.1 million (US$20.2 million) of government subsidies and tax rebates, and (ii) RMB40.6 million (US$5.6 million) of rental and other income.

Income from operations was RMB3,215.2 million (US$442.4 million), an increase of 11.7% from RMB2,878.8 million for the same period last year. Operating margin rate increased to 30.0% from 29.6% in the same period last year.

Interest income was RMB288.1 million (US$39.6 million), compared with RMB167.1 million in the same period last year.

Interest expenses was RMB115.9 million (US$15.9 million), compared with RMB72.2 million in the same period last year.

Gain from fair value changes of financial instruments was RMB54.9 million (US$7.5 million), compared with a gain of RMB51.6 million in the same period last year. Such gain or loss from fair value changes of the financial instruments are quoted by commercial banks according to market-based estimation of future redemption prices.

Impairment of investment in equity investee was RMB194.5 million (US$26.8 million). Such provision for impairment charge was related to the Company's investment in Zhejiang Yizhan Network Technology Co., Ltd.(浙江驛棧網絡科技有限公司), a subsidiary of Cainiao Smart Logistics Network Ltd.(菜鳥智慧物流網絡有限公司).

Income tax expenses were RMB665.0 million (US$91.5 million) compared to RMB575.6 million in the same period last year. Overall income tax rate increased by 1.8 percentage points year over year mainly due to RMB54.0 million accrual of withholding tax on distributable earnings planned for dividend payment to ZTO Express (Hong Kong) Limited attributable for the second quarter.

Net income was RMB 2,614.0 million (US$359.7 million), which increased by 3.3% from RMB2,530.2 million in the same period last year.

Basic and diluted earnings per ADS attributable to ordinary shareholders were RMB3.24 (US$0.45) and RMB3.16 (US$0.43), compared to basic and diluted earnings per ADS of RMB3.14 and RMB3.07 in the same period last year, respectively.

Adjusted basic and diluted earnings per ADS attributable to ordinary shareholders were RMB3.48 (US$0.48) and RMB3.38 (US$0.47), compared with RMB3.14 and RMB3.07 in the same period last year, respectively.

Adjusted net income was RMB2,805.7 million (US$386.1 million), compared with RMB2,531.0 million during the same period last year.

EBITDA[1] was RMB4,150.1 million (US$571.1 million), compared with RMB3,883.1 million in the same period last year.

Adjusted EBITDA was RMB4,339.7 million (US$597.2 million), compared to RMB3,883.9 million in the same period last year.

Net cash provided by operating activities was RMB3,480.1 million (US$478.9 million), compared with RMB3,761.6 million in the same period last year.

(1)   EBITDA is a non-GAAP financial measure, which is defined as net income before depreciation, amortization, interest expenses and income tax expenses which management aims to better represent the underlying business operations.

Declaration of Interim Dividend Payment

The board of directors (the "Board") has approved an interim cash dividend of US$0.35 per ADS and ordinary share for the six months ended June 30, 2024, to holders of its ordinary shares and ADSs as of the close of business on September 10, 2024. The dividend payment represents a 40% dividend payout ratio. For holders of Class A and Class B ordinary shares, in order to qualify for entitlement to the dividend, all valid documents for the transfer of shares accompanied by the relevant share certificates must be lodged for registration with the Company's Hong Kong branch share registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong no later than 4:30 p.m. on September 10, 2024 (Hong Kong Time). The payment date is expected to be October 10,2024 for holders of Class A and Class B ordinary shares, and October 17,2024 for holders of ADSs.

Business Outlook

Based on current market and operating conditions, the Company maintains its previously stated annual guidance. Parcel volume for 2024 is expected to be in the range of 34.73 billion to 35.64 billion, representing a 15% to 18% increase year over year. Such estimates represent management's current and preliminary view, which are subject to change.

Exchange Rate

This announcement contains translation of certain Renminbi amounts into U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to U.S. dollars were made at the exchange rate of RMB7.2672 to US$1.00, the noon buying rate on June 28,2024 as set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve Systems.

Use of Non-GAAP Financial Measures

The Company uses EBITDA, adjusted EBITDA, adjusted net income, adjusted net income attributable to ordinary shareholders, and adjusted basic and diluted earnings per American depositary share attributable to ordinary shareholders, each a non-GAAP financial measure, in evaluating ZTO's operating results and for financial and operational decision-making purposes.

Reconciliations of the Company's non-GAAP financial measures to its U.S. GAAP financial measures are shown in tables at the end of this earnings release, which provide more details about the non-GAAP financial measures.

The Company believes that such Non-GAAP measures help identify underlying trends in ZTO's business that could otherwise be distorted by the effect of the related expenses and gains that the Company includes in income from operations and net income. The Company believes that EBITDA, adjusted EBITDA, adjusted net income, adjusted net income attributable to ordinary shareholders and adjusted basic and diluted earnings per American depositary share attributable to ordinary shareholders provide useful information about its operating results, enhance the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by ZTO's management in its financial and operational decision-making.

EBITDA, adjusted EBITDA, adjusted net income, adjusted net income attributable to ordinary shareholders and adjusted basic and diluted earnings per American depositary share attributable to ordinary shareholders should not be considered in isolation or construed as an alternative to net income or any other measure of performance or as an indicator of the Company's operating performance. Investors are encouraged to compare the historical non-GAAP financial measures to the most directly comparable GAAP measures. EBITDA, adjusted EBITDA, adjusted net income, adjusted net income attributable to ordinary shareholders and adjusted basic and diluted earnings per American depositary share attributable to ordinary shareholders presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to ZTO's data. ZTO encourages investors and others to review the Company's financial information in its entirety and not rely on a single financial measure.

Conference Call Information

ZTO's management team will host an earnings conference call at 8:30 PM U.S. Eastern Time on Tuesday, August 20, 2024 (8:30 AM Beijing Time on August 21, 2024).

Dial-in details for the earnings conference call are as follows:

United States:

1-888-317-6003

Hong Kong:

800-963-976

Mainland China:

4001-206-115

Singapore:

800-120-5863

International:

1-412-317-6061

Passcode:

6523012

Please dial in 15 minutes before the call is scheduled to begin and provide the passcode to join the call.

A replay of the conference call may be accessed by phone at the following numbers until August 27, 2024:

United States:   

1-877-344-7529

International:

1-412-317-0088

Passcode:

9226740

Additionally, a live and archived webcast of the conference call will be available at http://zto.investorroom.com.

About ZTO Express (Cayman) Inc.

ZTO Express (Cayman) Inc. (NYSE: ZTO and SEHK:2057) ("ZTO" or the "Company") is a leading and fast-growing express delivery company in China. ZTO provides express delivery service as well as other value-added logistics services through its extensive and reliable nationwide network coverage in China.

ZTO operates a highly scalable network partner model, which the Company believes is best suited to support the significant growth of e-commerce in China. The Company leverages its network partners to provide pickup and last-mile delivery services, while controlling the mission-critical line-haul transportation and sorting network within the express delivery service value chain.

For more information, please visit http://zto.investorroom.com.

Safe Harbor Statement

This announcement contains statements that may constitute "forward-looking" statements pursuant to the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "aims," "future," "intends," "plans," "believes," "estimates," "likely to," and other similar expressions. Among other things, the business outlook and quotations from management in this announcement contain forward-looking statements. ZTO may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the "SEC") and The Stock Exchange of Hong Kong Limited (the "HKEX"), in its interim and annual report to shareholders, in announcements, circulars or other publications made on the website of the HKEX, in press releases and other written materials, and in oral statements made by its officers, directors, or employees to third parties. Statements that are not historical facts, including but not limited to statements about ZTO's beliefs, plans, and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: risks relating to the development of the e-commerce and express delivery industries in China; its significant reliance on certain third-party e-commerce platforms; risks associated with its network partners and their employees and personnel; intense competition which could adversely affect the Company's results of operations and market share; any service disruption of the Company's sorting hubs or the outlets operated by its network partners or its technology system; ZTO's ability to build its brand and withstand negative publicity, or other favorable government policies. Further information regarding these and other risks is included in ZTO's filings with the SEC and the HKEX. All information provided in this announcement is as of the date of this announcement, and ZTO does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

 

 

 

UNAUDITED CONSOLIDATED FINANCIAL DATA


Summary of Unaudited Consolidated Comprehensive Income Data:



Three Months Ended June 30,


Six Months Ended June 30,


2023


2024


2023


2024


RMB


RMB


US$


RMB


RMB


US$


(in thousands, except for share and per share data)

Revenues

9,740,324


10,725,964


1,475,942


18,723,563


20,685,970


2,846,484

Cost of revenues

(6,435,899)


(7,105,487)


(977,748)


(12,895,730)


(14,063,408)


(1,935,189)

Gross profit

3,304,425


3,620,477


498,194


5,827,833


6,622,562


911,295

Operating (expenses)/income:












Selling, general and administrative

(504,607)


(592,978)


(81,596)


(1,291,214)


(1,489,619)


(204,978)

Other operating income, net

78,957


187,698


25,828


292,598


348,955


48,018

Total operating expenses

(425,650)


(405,280)


(55,768)


(998,616)


(1,140,664)


(156,960)

Income from operations

2,878,775


3,215,197


442,426


4,829,217


5,481,898


754,335

Other income/(expenses):












Interest income

167,108


288,077


39,641


259,020


533,098


73,357

Interest expense

(72,218)


(115,855)


(15,942)


(143,928)


(199,771)


(27,489)

Gain from fair value changes of












financial instruments

51,640


54,862


7,549


207,213


97,582


13,428

Loss/(gain) on disposal of equity investees,












subsidiary and others

(764)


11,683


1,608


(764)


12,134


1,670

Impairment of investment in equity investee

-


(194,452)


(26,757)


-


(672,816)


(92,583)

Foreign currency exchange gain












before tax

81,134


15,178


2,089


70,921


20,562


2,829

Income before income tax, and share of












loss in equity method

3,105,675


3,274,690


450,614


5,221,679


5,272,687


725,547

Income tax expense

(575,585)


(665,011)


(91,509)


(1,030,592)


(1,231,316)


(169,435)

Share of gain in equity method












investments

123


4,318


594


3,947


20,373


2,803

Net income

2,530,213


2,613,997


359,699


4,195,034


4,061,744


558,915

Net loss/(income) attributable to non-
controlling












interests

10,991


(2,195)


(302)


16,506


(23,896)


(3,288)

Net income attributable to ZTO Express












(Cayman) Inc.

2,541,204


2,611,802


359,397


4,211,540


4,037,848


555,627

Net income attributable to ordinary












shareholders

2,541,204


2,611,802


359,397


4,211,540


4,037,848


555,627

Net earnings per share attributed to












ordinary shareholders












Basic

3.14


3.24


0.45


5.21


5.01


0.69

Diluted

3.07


3.16


0.43


5.10


4.90


0.67

Weighted average shares used in












calculating net earnings per ordinary












share/ADS












Basic

808,967,248


806,668,101


806,668,101


808,916,820


805,806,731


805,806,731

Diluted

840,176,316


839,697,501


839,697,501


840,125,888


838,836,131


838,836,131

Net income

2,530,213


2,613,997


359,699


4,195,034


4,061,744


558,915

Other comprehensive income/(loss),












net of tax of nil:












Foreign currency translation adjustment

(161,168)


(35,230)


(4,848)


(141,897)


(117,560)


(16,177)

Comprehensive income

2,369,045


2,578,767


354,851


4,053,137


3,944,184


542,738

Comprehensive loss/(income) attributable to












non-controlling interests

10,991


(2,195)


(302)


16,506


(23,896)


(3,288)

Comprehensive income attributable to ZTO












Express (Cayman) Inc.

2,380,036


2,576,572


354,549


4,069,643


3,920,288


539,450













 

 

 

Unaudited Consolidated Balance Sheets Data:


As of


December 31,


June 30,


2023


2024


RMB


RMB


US$


(in thousands, except for share data)

ASSETS






Current assets:






Cash and cash equivalents

12,333,884


10,542,131


1,450,646

Restricted cash

686,568


22,253


3,062

Accounts receivable, net

572,558


687,792


94,643

Financing receivables

1,135,445


1,070,565


147,315

Short-term investment

7,454,633


9,898,796


1,362,120

Inventories

28,074


28,095


3,866

Advances to suppliers

821,942


860,573


118,419

Prepayments and other current assets

3,772,377


4,657,146


640,845

Amounts due from related parties

148,067


170,038


23,398

Total current assets

26,953,548


27,937,389


3,844,314

Investments in equity investee

3,455,119


2,095,453


288,344

Property and equipment, net

32,181,025


33,180,203


4,565,748

Land use rights, net

5,637,101


5,780,463


795,418

Intangible assets, net

23,240


20,141


2,771

Operating lease right-of-use assets

672,193


521,130


71,710

Goodwill

4,241,541


4,241,541


583,655

Deferred tax assets

879,772


846,558


116,490

Long-term investment

12,170,881


14,034,434


1,931,202

Long-term financing receivables

964,780


1,000,306


137,647

Other non-current assets

701,758


931,597


128,192

Amounts due from related parties-non current

584,263


514,583


70,809

TOTAL ASSETS

88,465,221


91,103,798


12,536,300

LIABILITIES AND EQUITY






Current liabilities






Short-term bank borrowing

7,765,990


10,390,800


1,429,822

Accounts payable

2,557,010


2,200,315


302,773

Advances from customers

1,745,727


1,643,280


226,123

Income tax payable

333,257


317,156


43,642

Amounts due to related parties

234,683


154,446


21,252

Operating lease liabilities

186,253


154,257


21,226

Dividends payable

1,548


20,616


2,837

Other current liabilities

7,236,716


7,208,199


991,881

Total current liabilities

20,061,184


22,089,069


3,039,556

Non-current operating lease liabilities

455,879


328,909


45,259

Deferred tax liabilities

638,200


495,408


68,170

Convertible bond

7,029,550


7,216,538


993,029

TOTAL LIABILITIES

28,184,813


30,129,924


4,146,014

Shareholders' equity






Ordinary shares (US$0.0001 par value; 10,000,000,000 shares authorized;
    812,866,663 shares issued and 804,719,252 shares outstanding as of






December 31, 2023; 812,866,663 shares issued and 806,668,101 shares






outstanding as of June 30, 2024)

525


525


72

Additional paid-in capital

24,201,745


24,477,250


3,368,182

Treasury shares, at cost

(510,986)


(377,156)


(51,898)

Retained earnings

36,301,185


36,634,344


5,041,054

Accumulated other comprehensive loss

(190,724)


(308,284)


(42,421)

ZTO Express (Cayman) Inc. shareholders' equity

59,801,745


60,426,679


8,314,989

Noncontrolling interests

478,663


547,195


75,297

Total Equity

60,280,408


60,973,874


8,390,286

TOTAL LIABILITIES AND EQUITY

88,465,221


91,103,798


12,536,300







 

 

 

Summary of Unaudited Consolidated Cash Flow Data:



Three Months Ended June 30,


Six Months Ended June 30,


2023


2024


2023


2024


RMB


RMB


US$


RMB


RMB


US$


(in thousands)

Net cash provided by operating activities

3,761,604


3,480,095


478,877


6,499,578


5,511,115


758,355

Net cash used in investing activities

(3,541,559)


(4,666,289)


(642,103)


(9,408,160)


(7,044,941)


(969,416)

Net cash used in by financing activities

(1,974,295)


(1,103,622)


(151,863)


(1,133,723)


(973,492)


(133,957)

Effect of exchange rate changes on cash, cash












equivalents and restricted cash

104,871


(3,526)


(485)


95,934


35,077


4,827

Net decrease  in cash, cash equivalents












and restricted cash

(1,649,379)


(2,293,342)


(315,574)


(3,946,371)


(2,472,241)


(340,191)

Cash, cash equivalents and restricted cash at












beginning of period

10,306,095


12,872,411


1,771,303


12,603,087


13,051,310


1,795,920

Cash, cash equivalents and restricted cash at end of












period

8,656,716


10,579,069


1,455,729


8,656,716


10,579,069


1,455,729













 

 

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows:


As of


June 30,


June 30,


2023


2024


RMB


RMB


US$




(in thousands)



Cash and cash equivalents

7,781,443


10,542,131


1,450,646

Restricted cash, current

851,899


22,253


3,062

Restricted cash, non-current

23,374


14,685


2,021

Total cash, cash equivalents and restricted cash

8,656,716


10,579,069


1,455,729







 

 

 

Reconciliations of GAAP and Non-GAAP Results



Three Months Ended June 30,


Six Months Ended June 30,


2023


2024


2023


2024


RMB


RMB


US$


RMB


RMB


US$


(in thousands, except for share and per share data)

Net income

2,530,213


2,613,997


359,699


4,195,034


4,061,744


558,915

Add:












Share-based compensation expense (1)

-


6,768


931


254,976


305,155


41,991

Impairment of investment in equity investee (1)

-


194,452


26,757


-


672,816


92,583

Loss/(gain) on disposal of equity investees












and subsidiary, net of income taxes

764


(9,496)


(1,307)


764


(9,947)


(1,369)

Adjusted net income

2,530,977


2,805,721


386,080


4,450,774


5,029,768


692,120













Net income

2,530,213


2,613,997


359,699


4,195,034


4,061,744


558,915

Add:












Depreciation

671,283


720,930


99,203


1,322,968


1,473,049


202,698

Amortization

33,791


34,345


4,726


68,584


68,325


9,402

Interest expenses

72,218


115,855


15,942


143,928


199,771


27,489

Income tax expenses

575,585


665,011


91,509


1,030,592


1,231,316


169,435

EBITDA

3,883,090


4,150,138


571,079


6,761,106


7,034,205


967,939













Add:












Share-based compensation expense

-


6,768


931


254,976


305,155


41,991

Impairment of investment in equity investee

-


194,452


26,757


-


672,816


92,583

Loss/(gain) on disposal of equity investees












and subsidiary

764


(11,683)


(1,608)


764


(12,134)


(1,670)

Adjusted EBITDA

3,883,854


4,339,675


597,159


7,016,846


8,000,042


1,100,843
















(1) Net of income taxes of nil

 

 

 

Reconciliations of GAAP and Non-GAAP Results



Three Months Ended June 30,


Six Months Ended June 30


2023


2024


2023


2024


RMB


RMB


US$


RMB


RMB


US$


(in thousands, except for share and per share data)

Net income attributable to ordinary












shareholders

2,541,204


2,611,802


359,397


4,211,540


4,037,848


555,627

Add:












Share-based compensation expense (1)

-


6,768


931


254,976


305,155


41,991

Impairment of investment in equity investee (1)

-


194,452


26,757


-


672,816


92,583

Loss/(gain) on disposal of equity investees












and subsidiary, net of income taxes

764


(9,496)


(1,307)


764


(9,947)


(1,369)

Adjusted Net income attributable to












ordinary shareholders

2,541,968


2,803,526


385,778


4,467,280


5,005,872


688,832













Weighted average shares used in












calculating net earnings per ordinary












share/ADS












Basic

808,967,248


806,668,101


806,668,101


808,916,820


805,806,731


805,806,731

Diluted

840,176,316


839,697,501


839,697,501


840,125,888


838,836,131


838,836,131













Net earnings per share/ADS attributable to












ordinary shareholders












Basic

3.14


3.24


0.45


5.21


5.01


0.69

Diluted

3.07


3.16


0.43


5.10


4.90


0.67













Adjusted net earnings per share/ADS












attributable to ordinary shareholders












Basic

3.14


3.48


0.48


5.52


6.21


0.85

Diluted

3.07


3.38


0.47


5.40


6.06


0.83













(1) Net of income taxes of nil

 

For investor and media inquiries, please contact:

ZTO Express (Cayman) Inc.
Investor Relations
E-mail: ir@zto.com
Phone: +86 21 5980 4508

 

 

Cision View original content:https://www.prnewswire.com/news-releases/zto-reports-second-quarter-2024-unaudited-financial-results-302226521.html

SOURCE ZTO Express (Cayman) Inc.

FAQ

What were ZTO's revenues in Q2 2024?

ZTO reported revenues of RMB10.7 billion (US$1.48 billion) in Q2 2024, a 10.1% increase year-over-year.

How much did ZTO's adjusted net income grow in Q2 2024?

ZTO's adjusted net income grew by 10.9% to RMB2.8 billion (US$386.1 million) in Q2 2024.

What is the interim dividend announced by ZTO?

ZTO announced an interim dividend of US$0.35 per ADS/share for the six months ended June 30, 2024.

What was the increase in ZTO's parcel volume in Q2 2024?

ZTO's parcel volume increased by 10.1% to 8.45 billion in Q2 2024.

What is ZTO's market share as reported in Q2 2024?

ZTO's market share decreased by 2% to 19.6% in Q2 2024.

Stock ZTO logo
ZTO Express (Cayman) Inc. American Depositary Shares, each representing one

NYSE:ZTO

ZTO Rankings

#639 Ranked by Market Cap
#895 Ranked by Dividends

ZTO Latest News

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ZTO Reports Third Quarter 2024 Unaudited Financial Results
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Jul 23, 2024
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Jun 18, 2024
ZTO Express (Cayman) Inc. Announces Results of Annual General Meeting

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29.42%
2.57%
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